As you begin your journey of deploying a new financial management solution, one key decision in your planning is to determine if a multi-entity ERP system setup is necessary.
A multi-entity company is a business that may have subsidiaries, divisions units or brands.
For multi-entity organizations, it is essential to have a centralized system with access to real-time information. When working with multiple entities in your ERP system, you can view financial data at each entity level, but it is often impossible to roll up results to the corporate level. Because each entity likely has its own bank accounts, jurisdictions, and perhaps tax structures, roll-up is a nightmare unless your ERP or accounting system is designed to unify this data. The result is a lot of wasted time and errors caused by manually consolidating data.
Sage Intacct setup uses containers in implementing their solution. Some simple questions to ask when determining to deploy multi-entity vs. single entity container include:
- Are there user restrictions to access to data within an entity?
- Are Tax ID and 1099 reporting required by entity?
- Are there automated inter-entity transactions, especially within AP and AR?
- Are you manually consolidating more than four entities each year?
If you answer YES to any of the above questions, multi-entity containers must be set up.
You must understand the difference between an Entity and a Location when building out the financial management solution design. As you move to the implementation of your Sage Intacct multi-entity environment, it is important to keep the following Sage Intacct design considerations in mind:
- Entities are parents to locations and essentially are part of the location dimension.
- If an organization has a separate FEIN, they need to be entities.
- Locations cannot maintain separate tax ID or separate 1099 reporting.
- Automatic inter-entity transactions only work across entities not between locations.
Sage Intacct leverages what is called a TOP LEVEL which gives you access to all entities that a user has permissions to. Based on a user’s access rights will determine if they log in at the TOP LEVEL or at the Entity Level. Best practices for what should be set up at the TOP LEVEL typically include the following:
Master Data, this includes:
- Chart of Accounts
- Bank Accounts
- Transaction Definitions
If we think about why it is important to set up the above at the TOP LEVEL, first think about how sharing master data between all entities can reduce duplicates; and, the ability to use automatic inter-entity transactions helps to speed up data entry with minimizing data entry errors.
When implementing security within a multi-entity environment, often the end users ask that only certain users have access to certain things. Within Sage Intacct, this can be accomplished with user restrictions to entity/department or by setting up view-only users and restricting what objects a user has access to and then use Dashboards to limit reporting.
The functionality within a Sage Intacct multi-entity container is rich and can provide a great deal of analysis and insight when carefully designed before implementation begins. Working with an experienced team can eliminate “do-overs” during a deployment which can be costly and extend a go-live timeline.
Many companies that streamline their multi-entity consolidations correctly with Sage Intacct no longer rely on manual, error-prone consolidation or disparate data. Instead, they have control and visibility into real-time reporting and analytics across the entire organization. By having continuous access into multiple entities within a single view in Sage Intacct, executives are empowered to make strategic data-driven decisions to propel their business forward.