A group that has multiple subsidiaries in the same country faces the challenges of centralized and decentralized budget control and timely financial reporting. A group that has cross-border subsidiaries faces additional challenges when it comes to management and financial reporting. Each subsidiary has to have its payroll, account receivable, account payable and pay its taxes in the currency of the region in which it is located. But there is always one currency used by the parent group in which the corporation as a whole is run. It is to that currency that all financials have to be consolidated. Traditionally, centralized and decentralized budget control and financial reporting were demanding activities managed manually or through multiple spreadsheets. The results were often fraught with inaccuracies, and reporting was late. Month-end data aggregation and reconciliation could take weeks after the month actually ended.
Cross Border International Business
Besides the difficulty in financial management, the subsidiaries in a group had no way of leveraging the rest of the company; they had no visibility across companies into inventory. For example, a customer is acquiring a product in Guangzhou, but the sales team that supported it lacks visibility into other companies or regions. If the product is out-of-stock and the Guangzhou subsidiary does not have that product in local inventory, ordinarily it would re-order from the corporate headquarters in Germany. On the other hand, if it had visibility across borders, the local sales team would know that the item exists in Hong Kong. With, employees can have visibility and communication transparently across subsidiary boundaries. Without , the results were often inefficiencies in both sales and delivery, lack of visibility into disparate sales activities with the same customer, and ongoing accounting nightmares.
Multiple Lines of Business
The issues mentioned above do not just pertain to cross-border businesses or very large companies. People running multiple lines of business also share the same difficulties in consolidating their total financial data across their separate legal entities, whether their businesses are large or small.
The variations for corporate organizations are seemingly endless. Some companies that report up to a parent organization may themselves have subsidiaries that report up to them; some have other legal entities that they manage, perhaps all under the same parent corporation. The possibilities for accounting complexity are great.
The challenges derive from the inability to roll up financial records in a timely way, especially with any assurance of accuracy and in accordance with principles of good governance. The ensuing business issues that derive from this lack of total enterprise visibility include:
Real-time, On-demand and End-to-end Solution
is a real-time, on-demand, end-to-end ERP to meet all your multi-subsidiary and/or multinational business needs. Whether you require total business management of your multinational business, or solely wish to address the requirements of a global sales organization, can provide you with adequate control over your distributed business. The following is the list of specific multi-subsidiary and multinational business management features of :
Multi Subsidiary Sales
Using, executives in corporate headquarters have consolidated sales data on orders, forecasts, quotas and pipelines rolled up across all regions and areas, with direct drill-down capability to see details at any level of the organizational hierarchy. With , there is real-time automatic currency conversion based on currency tables or real-time currency fees at each step so all analytics and reporting are automatically personalized for the individual’s role within the group structure. Because dashboards are inherent in , there is no complicated setup needed to achieve this level of visibility at either the local sales office or at corporate headquarters.
Multi Subsidiary Procurement
allows setting global policies for both centralized and decentralized procurement that every company must comply with and local policies that a subsidiary or a group of subsidiaries must stick to. The parent company can choose one of the following roles to manage procurement together with its subsidiaries:
You can then manage spending across multiple subsidiaries, allocate spending without hassle, and eliminate duplicate data entry as well as consolidate buying power and centralize procurement through decentralizing.
Distributed Project Management
supports a project that is done across multiple business worksites or locations. The project team is a distributed team whose members may not see each other face-to-face, but they are all working collaboratively toward the outcome of the project. A distributed project is one of the highest forms of collaboration in any engineering or scientific R&D environment. The distributed project team will need to be able to track accountability and show cause-and-effect information in real-time. is one of the few advanced project management software that can do that for distributed project teams.
Multi Subsidiary Inventory Accounting
can manage raw materials, work-in -process materials and finished products which need to be ordered, stored, processed and transferred to and in multiple sites and warehouses across multiple subsidiaries and divisions. is a multi-currency system and provides the following features and financial connectivity throughout:
Global and Local Budget Control
allows setting of global budget and control for the entire group and local budget and control for each subsidiary. Budget can be allocated from a parent company to its subsidiaries or divisions and actual costs can be aggregated up from subsidiaries to a parent. The budget allocation and actual aggregation can be done at each level within the group organization structure.
Work In Progress (WIP) Financial Management
Work In Progress (WIP) Financial Management is the real-time finance connectivity to your WIP workflows in demand chain, project portfolio, production and supply chain across multiple subsidiaries. WIP Financial Management can provide you with an incremental view on work progress, resource consumption, time & cost consumption and revenue earning at any given time. Without this complete and real-time information, it would be hard for you to determine estimation-to-complete with your newly devised methods even if you have above-average experience in the field. Many initiatives go wrong over and over again because they are vague in their status quo. In other words, WIP Financial Management is the key to decision support -- no good information, no good decisions.