Why You Must Start Managing Multiple Entities in Your Accounts Payable Solution
Multi-entity accounting practices are primarily related to complex businesses which operate as a parent company, conglomerate, or a holding company with multiple subsidiaries. But businesses that work as a single entity may comprise of segmented teams and regional offices, treated as separate units by the accounts department.
Businesses can also move quickly from one to multi-entity organization through acquisitions, rapid growth, and geographic extension. Companies that are operating on high-growth trajectories should think about the implications of shifting to a multi-entity accounting model and how it will affect the accounting technology choices down the line.
Automation for Faster Processing
Accounting automation technologies are an important tool for multi-entity businesses, as accounting has always been a data-driven field. Automation has made the processing and collection of the data manageable. The switch from paper to digital and paperless accounting process has been picking up the pace, but there are some areas which have been slower to adopt automation than the others.
Today, many businesses still depend heavily on manual data entry and processing to pay supplier invoices. Automating accounts payable can efficiently eliminate manual AP data entry and accelerate processing times by streamlining payment and approval workflows. Not all accounts payable automation solutions are equally created. So, if your organization is operating as a multi-entity business, then the AP automation should be up to the mark.
How Multi-Entity Accounts Payable Automation Works
While searching for accounts payable automation software in the market, you need to check whether the solutions can handle multiple databases. A good accounts payable solution is equipped to manage multi-entity database files, even when the entities use various accounting software. The solution exports all accounts payable transaction data accurately to all the entities and consolidates the data into a single view.
Multi-entity Reporting and Searching
Centralizing accounts payable data has a two-fold impact.
- Greater Control
- Granular Insights
With an automated accounts payable solution, users don’t need to log in and out to access each entity’s accounts payable data and take adequate action on the invoices and payments directly from the solution’s centralized dashboard.
Various analysis and accounts reconciliation turn out to be a simpler task when you can rely on the appropriateness and completeness of the data. You may run a complicated business, but with automated accounts payable system you can get a clear picture of your financial health.
It is significant to maintain divisions between various entities, and controlling a user’s access and the view is necessary. AP software allows the users to only view transaction data for the organization they belong to, whereas higher-level administrators are given greater access based on their specific requirements.
To Sum Up
No matter what accounts payable automation solution you select, you must look at the future scalability of your organization and how the accounting processes will change when your business expands. Search for a flexible AP solution that offers robust reporting and user controls which can scale beside your business.
