The financial consolidation process has long been a challenging one for hospitality companies. Thankfully, with Sage Intacct hospitality software, accounting teams are now automating this process. Hospitality accounting teams used to take months or weeks to consolidate, assemble, validate and report on data. Sage Intacct for hospitality companies dramatically reduces this time to hours or fewer.
Multi-location hotel, restaurant, and other hospitality companies often consist of separate multi-entity organizations such as decentralized payables, inter-entity transactions, multiple currencies, global consolidations and more. As growing hospitality companies add more entities, the complexities grow as well.
- Having to maintain and juggle multiple systems and processes
- Lack of control and workflows
- Inefficient reporting through Excel, subject to errors
- Lack of visibility across entities
- Inability to scale and grow the business
There are generally 4 steps to the multi-entity hospitality company consolidation process without using a system like Sage Intacct for hospitality software automation:
- Detailed calendars are generated with specific target dates for each business unit to close their books and submit their results to the corporate accounting department.
- Before cloud accounting software like Sage Intacct hospitality software was introduced, the corporate accounting department might receive the individual business unit close results through offline mechanisms such as email. The offline submissions often require a degree of manual manipulation to align the results of the various business units using unified accounting policies and account grouping structures. This often includes a degree of human related error as a result of the duplicate data entry from each individual entity.
- Without the use of hospitality software in the cloud, corporate hospitality accounting groups might have to set-up a consolidation entity inside the financial reporting system to separately house the consolidation and elimination journal entries. However, many others continue to rely on a simple spreadsheet tool for this purpose. Whether it's journal entries or separate columns and/or rows, the inter-company activities and the investment/equity accounts get eliminated, and the books for any acquisition related balances (e.g. goodwill) adjusted.
- The consolidated accounts are manipulated to put them into a financial reporting framework.
Cloud hospitality software financials, like Sage Intacct, reduces errors and preserves financial reporting integrity by automating checks and balances and account reconciliations. In a recent study by Financial Executives Research Foundation and Robert Half, more than 57% of companies manually reconcile accounts. Difficult challenges can arise when late entries or other adjustments get posted and this process is repeated.
No one disputes that the old way of preparing a consolidation no longer works, it's extremely inefficient and comes with greater risk. Reliance on spreadsheets and manual procedures is what in reality holds many finance functions back from playing greater strategic roles in their organizations. While clinging to the manual processes and spreadsheets of the past are comforting for many finance people, it’s important that everyone recognizes that approaches to financial consolidation have advanced significantly in recent years. There is a better way to design and architect your consolidation process.
Contact us if you have questions about business care or need personalized support from our team of Sage Intacct technical experts.