Multiple companies set up in one database

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Posted on by hersheys

We've set up our GL account with 2 segments. The first segment is the company and the second is the main account. As we add new companies to the same database we basically just copy the same chart of accounts thru the mass modify feature from the existing entities except change the first segment which is the company number. We can run our financials in MR for the different companies based on the first segment which is again the company number. All the set up is the same for all our entities. We've also set up the intercompany triggers all the same way and seem to work. We use Analytical Accounting as well. Is this the best way to set up the new entities?

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Mahmoud Saadi on at

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RE: Multiple companies set up in one database

I do believe that such a topic is quite controversial, some clients prefer to set up one Dynamics GP company including one segment for the "cost center" or "company id", while others prefer to have multiple Dynamics GP companies.

In my opinion, the decision on whether to configure one company or multiple companies is derived from the legal status of the company itself, if they are legally separate companies under one group, they would logically have different staff managing different functions under different management. In such a case, I would find no reason of creating one GP company with different Chart of Accounts, It would be more suitable to create multiple GP companies which in turn would have different customers, vendors, items ...etc. On the other hand, you can still create consolidated financial statements on the group level.

Creating one GP company with multiple "cost centers" is suitable when you have one legal company managing different functions or business lines, where the staff and management is the same. In such a case, it would be quite convenient to have one GP company including all the accounts, customers, vendors ...etc. In such a case, the vendors of the different business lines can be categories in different vendor classes, the same concept could be applied on the different customers on the different business lines, but after all, the AR accountant (for instance) will have access to all the customers of all the different business lines.

One of the companies I have worked with (whose employees and workers are around 2200+) has one GP company managing the different business lines the same way described above, although, the management team and the accounting staff are the same for all the different business lines.

Let us know if you have any further inquiries,
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Heather Roggeveen on at

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RE: Multiple companies set up in one database

Hi

Just to add to Mahmoud's very good response. There is definite reason for the either / or. There is a function in Dynamics GP that was introduced a couple of versions ago called Interfund Management.

We have a number of clients who are using this to manage multiple separate legal entities in a single GP database. It will differ from country to country, but we have laws that allow for things like consolidation of Goods and Service Tax reporting in grouped legal entities. We are also a country of small businesses - so we find most of our GP sites are less than 10 users. But often those small finance teams are managing a huge number of companies / transactions.

Most that manage the legal entities in the same database is when the function of each entity is almost the same - i.e. multiple farms (50), quarries (15) etc.

For Interfund to work really effectively (i.e. to be able to create both a balance sheet and P&L for any one entity), you need the single segment for each entity - but I have also found that it works best when you have separate suppliers and customers for each of the entities. Otherwise it can become difficult to pay and report on AP and AR GL balances vs sub-ledger etc.

There are considerations to make for each option - and either way can work effectively. There are pros and cons for each.

The other little thing I have found that helps with managing multiple entities in a single database is to make use of the Account Rollup Enquiries - this does give you the ability to review overall AP and AR balances easily if posting to separate control accounts.

If you choose separate databases, then I would highly recommend setting up a template company and using the triggers available with the Professional Services Tools to replicate things like Customer and Supplier cards as relevant.

There is no right or wrong way - as long as you can report to meet both internal and external needs and isolate everything that needs to be isolated for a single entity, then whichever works best for your team is the right way.

Hope that helps.

Cheers

Heather
hersheys on at

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RE: Multiple companies set up in one database

Thank you Mahmoud.
hersheys on at

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RE: Multiple companies set up in one database

Thanks Heather. We don't use Purchasing and AR for the entities we've set up using the segment via mass modify so it made it more simple to do it this way.

Thanks again.
Community Member on at

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RE: Multiple companies set up in one database

How would you handle two legal entities with identical charts of accounts, but with different fiscal years?
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Heather Roggeveen on at

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RE: Multiple companies set up in one database

Hi Nick

Sorry - I didn't see this one sooner. If you have separate fiscal years, you would need to have separate databases. You only have the option of a single year end close within each database.

You could still do consolidated reporting over the two databases - you would just need to be careful about periods etc and where opening balances report. It might take a little to set up reports in the way you want, but I don't see any reason why it wouldn't be able to be done.

Cheers

Heather
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RE: Multiple companies set up in one database

Hi Heather

We are looking for similar solution, we would like 1 data in GP where we have (sort of) 100 sub entities (based on location, all within 1 state) who act like little franchisees and they would need separate TB, P&L and BS each month and have separate debtors & creditors. We are grouped for GST and are all grouped under 1 entities. All the 100 sub branches are independent cost centres along with different bank accounts.

We are looking to have 1 account for each creditor/debtor so that they wont get multiple accounts from us. Would you think this is possible by having segment 1 separated by sub branch and be able to run individual TB/BS ?

Thanks

Punit
Heather Roggeveen on at

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RE: Multiple companies set up in one database

Hi Punit

GL reporting is no problem at all. And by turning on the Interfund feature, it makes it really easy to ensure each business unit is in balance.

You would have to have one segment that defines the business unit.

The difficulty is doing things like Historical Aged Trial balance per sub-branch. Or tracking the GST etc to each unit. While I note you are grouped for GST, you still really want to have it going to the right business unit so the reports all balance. I did do an Excel based query for one of my clients that grouped by PO number all the transactions for the purposes of an ATB. But it is only a live situation - I think it would be difficult to do with an historical ATB. Unapplied payments etc also can be an issue.

Since this initial post, my company has released a product as part of a Tools suite that enables the creation of multiple versions of the supplier within a single database. You have a master supplier card and push out to each business unit.

We haven't done the same on the customer side, but that could be done if it was wanted.

The biggest issue sites seem to have with dealing with this situation is "but then I have to maintain lots of vendors / customers", "that means more cards to look up" etc.

Our multi-vendor tool takes away the issue of maintenance and by using things like defined lists in SmartLists and default views in lookups, you can reduce the impact of lots of cards to look up.

I am happy to discuss with you your specific needs further if you like. You can email me at heatherr@olympic.co.nz

Cheers

Heather

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