Multi-Company Structures in Dynamics GP for Project-Based Companies

One of the challenges that we have seen with project-based companies is when they have a multi-company structure and want to bring together their various resources and information in order to simplify the interactions of the companies who have been assigned particular projects.

 The complications arise when they want to maintain the costs in the appropriate company and therefore inter-company billing becomes a necessity. Since many companies have different entities that represent their business on either a vertical or horizontal market, an inter-company billing process is required to facilitate the lending and sharing of resources across their organization.

 This complexity then only continues to multiply when there are several projects with different combinations of companies involved. And as the number of transactions increases, the challenge then becomes how to properly account for all of these tasks and transactions. We have noticed that organizations want to maintain their visibility into the health of a particular company but still preserve a substantial amount of detail at the project level to be able to evaluate the project’s profitability as well.

Many companies currently manage their projects through  distinct company setups in Dynamics GP but then require constant manual interactions between them to maintain up-to-date information. It is typically a time-consuming task for the accounting department to decipher the different activities within a project and then to properly report on the different business units in a consolidated statement.

 From our experience, we believe that the project’s database should be the basis of your structure  and should be available across all your companies participating in that project. That would eliminate the requirement for multiple manual inter-company transactions. This type of structure will allow you to easily lend resources like employees, suppliers, inventory, and equipment to each other in order to reduce your administrative time creating these transactions and increase the synergies between your different organizations; it will allow you to better manage the resource sharing between them.

 A way that JOVACO reduces this level of complexity is with a multi-company project database setup. You can create an automated process of inter-company entries and even inter-company invoicing to streamline the flow of your business activities. This process will automatically create and associate the appropriate Accounts Payables and Receivables for each of the companies associated within the project, therefore eliminating the manual transactions and also allowing  your organization to include related discounts and markups related to a particular project.

 In general, if you can set up a multi-company project within Microsoft Dynamics GP, you will then have the possibility for drilldowns and reporting specific to a particular company. With a well thought out multi-company project structure which supports your projects across all your companies, profit centers, and business units, your organization will have the insight it needs to have a better overview on the health of your different companies and projects while easing the burden of inter-company invoicing.

 By JOVACO Solutions, a Quebec-based Gold Certified Microsoft Dynamics GP Implementation Specialist