Looking for accounting software for multiple businesses?
Multi-entity companies require a financial tool that will help them manage their businesses more effectively.
In this article, we will outline the key things to look for when researching and how to choose the proper software. We will also outline the common challenges you may face when using them. Additionally, we will provide some of our suggestions so you have a place to start.
Key Features to Look for in Accounting Software for Multiple Businesses
Multi-Company Support
Let’s begin with the most obvious. Your accounting software should possess the capability to support multiple business accounts. This means the ability to integrate and manage data across multiple subsidiaries, separate legal entities, or international branches from a single place.
This streamlines the accounting process, which is already so crucial when managing one, much less several businesses.
For one, it should allow you to add multiple users so the appropriate people can access the data, records, and reports as needed. This includes access for an accountant and your team of bookkeepers across all held entities.
Consolidated Financial Reporting
Consolidating financial statements is the process of gathering financial data from all subsidiaries together into a unified report. These would be a slightly more complex version of your regular balance sheet, income statement, and cash flow statement.
This helps you, your financial advisors, as well as investors and stakeholders see the full picture of a parent company’s financial health.
This functionality allows for a more accurate view of the overall financial position of the business owner(s). It also allows for better financial oversight and decision making across the board.
Customizable Chart of Accounts
When handling multiple entities, you’re dealing with different business structures, transaction behaviors, and income streams. As such, you need to have an accounting solution that can handle the level of granularity required.
We recommend having separate accounts for each business to avoid confusion. Still, the software should be highly customizable to fit specialized needs.
Multi-Currency Support
If you are a multi-business owner operating international businesses, then you need an accounting software that can handle multiple currencies.
This functionality allows you to manage and accurately record transactions in multiple currencies, factoring in the fluctuations in exchange rates. Multi-currency support helps maintain accuracy with cross-country transactions. It also helps one stay compliant with the International Financial Reporting Standards (IFRS).
Scalability and Integration
Your accounting solution must be able to handle the complexities of your needs and your growth potential.
Migrating between different accounting software can be a tricky and time-consuming process. You should choose a software that has the necessary features for your current financial management needs. It should have that balance of value and functionality.
Don’t stop there, though. Make sure it also has the feature-set to scale alongside your business and support your growth.
Part of that includes having the third-party integrations for your specialized needs.
These integrations include payroll software, point of sale systems, payment processors, CRM (customer relationship management software) and more.
Top Accounting Software Options for Managing Multiple Businesses
QuickBooks Online
QuickBooks Online is a small business software that provides robust features at an affordable price. It supports multi-company accounting through its multi-company file access feature. This allows users to maintain separate sets of books for different entities.
QuickBooks Enterprise Desktop also helps medium-sized businesses with their multi-entity needs. While you need a separate subscription for each business, you can switch seamlessly with single login access. QuickBooks also has a suite of API integrations with a lot of popular applications.
Xero
One of Xero’s most famous features is its flexibility in accommodating unlimited users. This means great scalability potential for small and large businesses alike. It offers essential features like expense tracking, invoicing, project management, project accounting and basic multi-currency features.
Xero integrates with many third-party applications, which enhances its functionality for multi-business environments. Xero also offers a pretty robust customer support system.
Zoho Books
Zoho Books is a user-friendly accounting software for SMBs and is part of the larger Zoho suite. This tool allows you to create multiple organizations with a single account which you can seamlessly switch between.
Like Quickbooks, you do have to pay for individual subscriptions. Its features include expense tracking, invoicing, and multi-currency support for businesses operating globally. One of the key features of Zoho Books is its seamless integration with other Zoho products and suite of third-party app integrations.
Sage Intacct
Sage Intacct is a great solution because of its advanced multi-entity and financial management capabilities. For one, Sage makes it easy to configure and set up new entities and accounts. Their financial data consolidation and management is seamless across multiple entities, making it one of the best.
Sage Intacct offers real-time reporting, helping business owners and accountants see financial data across entities. The software also includes automations for inter-company transactions, simplifying the otherwise complex process.
NetSuite
Netsuite is a business management software that offers features like ERP, CRM, and business accounting. Their multi-business functionalities allow users to manage multiple financial accounts effectively.
Netsuite offers features like chart of account mapping, foreign currency management, and revenue and expense management. Their features help with regulatory compliance (GAAP), accurate data sharing, and ensuring comprehensive financial oversight with real-time dashboards.
How to Choose the Right Accounting Software for Your Businesses
Assessing Your Business Needs
Choosing the right accounting software for multiple businesses is difficult if you don’t know your specific needs. Are you operating in an industry that requires specific niche functionalities?
For instance:
- POS integration capabilities
- Practice management bookkeeping features for doctors and vets
- Restaurant business bookkeeping features and integrations, etc.
Comparing Costs and Value
Choosing the best, cost-effective option isn’t as simple as finding the cheapest or most expensive offering. You also have to compare and contrast pricing based on the value-offer between and within each software.
Analyze their price tiers and see if you are truly getting what you pay for. Determine also if you’d be paying for features you don’t even need.
Evaluating User Experience and Support
User experience is incredibly important when using accounting software. It’s true that you could theoretically let your accountant and bookkeeper handle everything to do with the software.
However, it’s more likely that non-accounting personnel will have to interact with the software in one way or another. Therefore, you should look for a fin-man tool that’s beginner-friendly–easy to use and navigate.
It’s not all about the interface, though. Another important part of software experience is the client support and service system.
Some questions you can ask include:
- If you run into issues, how easy are they to reach?
- Do they offer multiple channels for support like email, live chat, support calls, and SMS?
- Are they available 24/7?
Testing and Demos
Proper research can definitely help you find the right accounting software a lot quicker. However, there most likely is going to be a trial period where you test out your top picks with real-life scenarios. As such, expect that this is going to be an investment.
Thankfully, most, if not all, accounting software offers free trials and discounts for new users. Some even give discounts for the first few months. You can take advantage of this and see which one serves you the best.
Seeking Professional Advice
Financial advisory services can help you gain a better understanding of your business needs. Hiring an advisor can help you gain an extra level of insight into your management practices and reports. They can then tell you what software meets your unique structure the best.
Common Challenges in Using Accounting Software for Multiple Businesses
Data Security and Privacy Concerns
Having your data all in one place is definitely convenient. However, the concern for security and privacy does become a bigger issue.
That’s why it’s important to select your accounting software carefully. Make sure they comply with industry standards and have safeguards in place against cyber threats.
Managing Complex Workflows
Your accounting workflows won’t all look the same across your various subsidiaries and entities. Even if you standardize your accounting function and processes, there are still going to be business-specific considerations. Automation definitely helps streamline processes, but struggles with the more complex niche processes.
Ensuring Accuracy Across All Businesses
Depending on the number of subsidiaries or legally separate entities, the volume of transactions could be high. This also means multiple reconciliation processes and considerations for foreign currencies and taxes. Unless you have standardized processes and workflows in place, it can prove challenging to ensure accuracy and compliance.
Keeping Up with Software Updates
Accounting software needs to stay up to date with the latest regulation and security updates and are always introducing new features. Sometimes, though, it’s difficult to stay updated, leading to potential issues like outdated data security.
User Training and Adoption
Even the most intuitively designed accounting software interface has a learning curve. The challenge is finding a software that helps you get through that process as painlessly as possible. Do they have tools and resources to help users familiarize themselves with its features?
Another challenge is adopting and transitioning to the software from whatever system you were using before. Not everyone will be able to adapt as easily to the changes.
Frequently Asked Questions
What are the key differences between accounting software for single businesses and accounting software for multiple businesses?
The main differences lie in its features like consolidated financial statements, multi-currency support, data integration, and scalability and integration support.
Can I use free accounting software for managing multiple businesses effectively?
Free accounting software does have a ton of benefits, especially if you’re just starting out. However, most often they lack the key features and support you need to handle the intricacies of multi-entity financial management.
How do I handle tax reporting for multiple businesses using a single software platform?
These multi-entity software help you create tax-ready and tax compliant financials. Part of this is offering customizable reporting features for tax season.This way you can review your financial data and check for discrepancies before filing.
What are the potential risks of using the same software for multiple businesses?
Using one software might carry data security and privacy risks. Another is the risk of not possessing some niche features your other subsidiaries could benefit from.
How do I migrate data from different businesses into one accounting software?
It helps to have an accounting data migration checklist. This helps to ensure there are no data discrepancies and the new software works as intended.
What Is AccountsBalance?
AccountsBalance is a monthly bookkeeping service specialized for agencies & SAAS companies.
We take monthly bookkeeping off your plate and deliver you your financial statements by the 15th or 20th of each month.
You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
In Summary
Choosing accounting software for multiple businesses can be a tricky task. You need to make sure they have the features and functionalities that cater to your niche demands. Through adequate research and testing, we’re confident that you’ll find a financial management solution that helps you take care of your multi-company needs.
If you want to learn more about LLC bookkeeping essentials and S Corp bookkeeping, check out the posts we’ve made on those.
