A Cloud Purchasing and Expense Financial App that Produces Balanced Intercompany Accounting Entries
Business growth often involves acquisitions and mergers, as a way of opening new doors in different regions. While growth is wonderful, it sometimes comes with a new set of headaches such as multiple business management solutions, general ledgers (GL), and the challenge of making sense of it all. Each physical location that belongs to a parent company must maintain its own GL, just as the parent company must manage a corporate-wide GL. It is a common practice to shift inventory, assets, and other resources between one location and another. As such, each transaction must be noted in the GL by both the originating business and the destination business.
Performing manual transactions and reconciliations for each business location is far too time-consuming and prone to miscalculations. In addition, misrepresenting intercompany transactions could distort a businesses' financial position, possibly resulting in managers or shareholders making poor decisions, as well as raising red flags with regulatory agencies. Save yourself the time, trouble, and headaches by implementing an intercompany solution such as Ariett ReqNet and AP Invoice.
Ariett ReqNet and AP Invoice can streamline common accounting tasks between multi-entity businesses by connecting general ledgers (GL).
For each shift in resources, you select the purchase or expense account for the originating business, then the appropriate corresponding account for the destination business. Subsequent transactions for the originating business will include the purchase/expense GL account distribution, an accounts payable distribution, and a 'due from' GL distribution for the destination business. The destination business' transaction will include a corresponding GL account distribution and the 'due to' GL distribution to the originating business. As a result, data for each entity is entered in half the time and each entity maintains an accurate, balanced general ledger.
Managing multiple general ledgers is not an easy task, but is of critical importance to each business within your enterprise. Contact experts at Ariett for more information about our powerful business management solutions like Ariett ReqNet and AP Invoice that include intercompany transaction processing functionality as well as other business management solutions that can help you manage multiple entities, with fewer headaches.
By Ariett, a Purchasing and Expense Solution Provider out of Massachusetts (http://www.ariett.com/)