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Guanty
August 18, 2021
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Group accounting and consolidation

  • August 18, 2021
  • 2 replies
  • 0 views

Hello,

 

I would like to do my accounting and reporting for 3 subsidiaries on QBO. However, I am not getting a solution that helps with intercompany accounting or giving consolidated financials for the 3 subsidiaries. This feature is crucial for our business. Kindly assist.

 

Best regards,

Guanty

Best answer by Fiat Lux - ASIA

Have you explored any BI app to consolidate your report?

2 replies

Fiat Lux - ASIA
Fiat Lux - ASIAAnswer
August 18, 2021

Have you explored any BI app to consolidate your report?

    M
    mv32
    August 18, 2021

    Thanks for posting to the Community, @Guanty. I can share a few details in managing your accounting and reporting for subsidiaries in QBO.

     

    If the three subsidiaries have different locations, you can set up and use location tracking in QBO. Through this, you can select a specific subsidiary for each transaction.

     

    Then you can utilize the class tracking feature to track income and expenses provided with each subsidiary.

     

    Here's how to turn on location and class tracking:

    1. Go to the Gear icon and then select Account and settings.
    2. From the Advanced settings, find the Categories section.
    3. Click the Edit icon.
    4. Switch On Track classes and Track locations.
    5. Hit Save.

     

    To help you analyze the intercompany entries for accounting and reporting, I suggest consulting an accountant for professional assistance. You can also find an accountant near to your area.

     

    Additionally, you can run the Profit and Loss report by Class or Location. If you want to show up specific data to your financial statements, you can also customize reports in QuickBooks Online.

     

    Let me know if you have other concerns about managing your transactions and report in QuickBooks. I'll make sure to answer them for you. Stay safe, and have a great day!

    G
    GuantyAuthor
    August 18, 2021

    Unfortunately this won't work since the company subsidiaries are in different countries with different laws (accounting, taxation etc) I need to be able to account for them as independent entities and the consolidated. I see that I can use Fathom for this but would be great to have a tutorial.

    For the intercompany transactions, your responses say that I am not able to post a transaction in one company and it appears in the other. This makes intercompany accounting cumbersome due to duplication of efforts and provides room for errors where one accountant in one subsidiary posts different values from the other.

    john-pero
    john-pero
    August 18, 2021

    You could switch to Quickbooks Enterprise, which allows consolidated reporting.  It still does not provide the enter in one company appears in another option you are looking for. Truthfully since each subsidiary ios independent you should, in my opinion, not comingle to the point that one entry affects all the affiliates. This would be akin to your vendors creating an invoice at their end and it magically and automatically appears in your company without you doing anything. Next logical step would be the vendor automatically pulling money from your bank without your intervention.

     

    To be clear, different companies in different countries also require different software. QBO US is useless for a business in Toronto or London, for those you need country-specific versions.  And it is not just laws that are different in each country but your legal entities are also different.  This would be the same even if all your companies were in one country but had different ownership - mandating a single company per tax ID.

      G
      GuantyAuthor
      August 18, 2021

      Thank you for this. In truth, each subsidiary is an arm of the parent company hence not independent from a group view. Therefore if I post an intercompany receivable in company A it should appear as an intercompany payable in B, after approval of the transaction.

        S
        Shasi
        August 25, 2022

        I would recommend you to consolidate using Power BI to produce group accounting reports.

         

        Step 1 - Connect Power BI to QuickBooks via AP and the connector.

        Step 2 - Create the trial balance for each entity from different entities that you would like to consolidate.

        Step 3 - Create the consolidated trial balance by combining your trial balances.

        Step 4 - For intercompany eliminations is bit tricky here. You have to maintain an excel sheet with all your TB accounts. Please enter the elimination entries in your excel and then link this excel to your group TB in your Power BI. You will have the final TB after this and there you can start creating consolidated PL, BS and other reports in Power BI. This is useful in management reporting.

         

        QBO is not a recommended solution if have multiple entities across the world but the above will work fine within same country.

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