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Consolidating foreign entities using Quickbooks

Leena Mansharamani's Profile

consolidating foreign entities using quickbooksWe are a small late stage start up company about 6 months from commercializing our product. We are currently using quickbooks to maintain our books and records. we currently have 1 foreign entity. What is the best and most effective way to consolidate the books using quickbooks without investing money into a new ERP system. Any suggestions (outside of using excel for consolidation) would be most appreciated.

Answers

Peter Lyons, MBA, CMA
Title: Finance and Technology Enthusiast
Company: Currently Looking
(Finance and Technology Enthusiast, Currently Looking) |

I have never used this application but I don't see why it wouldn't work for what you are looking to accomplish. They offer a free trial as well.

The Report Combiner, extracts data from 1 to 999 QuickBooks files and creates combining Profit and Loss statements and combining Balance Sheets.

In addition the Combiner can transfer the summary data to a new or existing QuickBooks "Consolidating" company file and set up each company as a separate class. After transferring the data into the QuickBooks file, you can run any of the QuickBooks reports on the imported data. The companies being combined don't have to be using the same charts of account.

You can also use the Combiner to merge summary data from one file to another file. Some accountants maintain a QuickBooks file that has their clients QuickBooks data in it plus their adjustments for depreciation, accruals, prepaid amortization etc. Using the Combiner, you can easily transfer a summary of a client's activity for a time period (say a month) into a second QuickBooks file containing accountant's adjustments

Leena Mansharamani
Title: Corporate Controller
Company: Deeya Energy
(Corporate Controller, Deeya Energy) |

Peter - this is very helpful. Thank you for such a detailed response and advice. Another question, do you know anyone who can help setup the books (assuming the report combiner works out)at a very cheap cost.

Regards,
Leena

Keith Taylor
Title: CFO
Company: Lyris, Inc.
(CFO, Lyris, Inc.) |

Leena,
Peter Lyons' recommendation is a good one - the tool is easy to use. However, you don't state which version of Quickbooks you're using. If you upgrade to QB Enterprise (at least versions 2010 and 2011), it supports multi currencies (to support subsidiaries in international locations), and has a consolidations feature which creates Excel output from multiple QB Company files similar to the Report Combiner.

I believe the Report Combiner has a demo version available to try it out...

Topic Expert
Bob Stenz
Title: Controller
Company: Silicon Valley start-up
(Controller, Silicon Valley start-up) |

I've had great success (3 years of smooth audits) by just taking our US chart of accounts and adding two digits (followed by a hyphen) to each account (as needed) to represent each foreign sub (we have 4 foreign subs). I have our overseas accountants map their accounts to ours (with the 2 digit entity prefix) and prepare our monthly journal entry (include foreign currency translation). I then upload (using Dynamic Ventures General Journal Entry tool) each company's monthly journal entry into QuickBooks and do a quick review of the companies financials (...I have standard reports with a filter for each of the country's accounts). For the few elimination entries I have...I've created another entity with a two-digit prefix. We're a late stage startup as well using QB Enterprise 2009. The accounting staff (4 users) have found this approach to consolidation easy to work with (they never are confused by the extra accounts). Sure beats using multiple company files, etc.

Binita Thakker
Title: Sr Manager
Company: SOAProjects
(Sr Manager, SOAProjects) |

Great suggestion Bob. It seems to be a potential alternative to what I have done as elaborated below.

I have successfully used QB Enterprise to manage over 80 different entities with various levels of consolidation.

Depending upon the specific needs of the entities, it can be done two different ways. One is to use classes for entities under a parent so that you have the simplicity of a single GL.

The other way is to maintain separate GLs for each entity. Each entity is set it up using a uniform chart of accounts. For eliminating entries, I created a separate QB file for the eliminating balances. I use the 'Combine reports from multiple entities' feature in QB Enterprise to get a consolidated set of financials at the touch of a button.

Tracie Burrow
Title: Controller
Company: Sturgis Materials, Inc.
(Controller, Sturgis Materials, Inc.) |

Is it possible to even combine companies in this manner if the companies have separate EIN's and are not subsidiaries of one another?

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