If you’re running accounting for multiple businesses, can you have them all in one QuickBooks account?
In short, QuickBooks does allow you to do accounting for multiple businesses within its platform, even with its limitations.
This post will walk you through those options, discuss the pros and cons, and then we’ll show you an alternative if you want to look for a more efficient platform.
To manage multiple accounts in QuickBooks, you’ll have to create an account and then add multiple businesses to that account. To set up multiple accounts, sign out and then go to the sign-in page. On that page, you’ll see an option that says, “adding a company to an existing account?”
You can select that option and create another account for the new business. Unfortunately, you will have to pay for the new business account, though all companies will be displayed under one account.
Note that while all businesses will be listed under your account, you’ll still have to pay for each new business account. However, if you are only managing different branches or divisions, you can use the Class/Location feature available in QuickBooks Online Plus.
Assuming you ultimately purchased the new business account and logged into the platform, you can switch between each business account under the settings tab.
While setting it up is simple enough, here are a few additional questions that most people ask after setting up QuickBooks.
QuickBooks creates a different Chart of Accounts for each company, and you have to consolidate them manually. In addition, if there is one adjustment made to a single company, you’ll have to manually edit the consolidated spreadsheet as well.
In fact, all financial consolidation is manual. Therefore, keeping all of your company’s financial data synched in QuickBooks can be very difficult.
Though if you want to do it, here are the exact steps QuickBooks experts recommend:
Yes and no. QuickBooks does have a multi-currency functionality in QuickBooks Plus and Advanced that allows you to assign a specific currency to various accounts. For example vendors, customers, accounts receivable and accounts payable. However, the income and expense accounts will only display in the currency listed for the business’s physical address.
Specifically, QuickBooks says, “You can only assign one currency to each account or contact name, and you have to add a new account for each different currency that you will use in transactions.”
They recommend creating different accounts for each office if your offices are located in three different areas.
No, none of the QuickBooks dashboards update in real-time (or near real-time). This makes analyzing cash balances across various balances challenging as the data isn’t always accurate. For example, if the accountant takes a week to consolidate the data, it won’t be up-to-date when the report is ready.
QuickBooks does not offer a way to report across multiple databases quickly. As a result, your accountants will have to piece it together with an Excel spreadsheet.
If your companies share any transactions, QuickBooks will not automatically distribute this as there isn’t a single general ledger for all of your companies. Therefore, if one company pays a bill for another company, you’ll have to enter that in both companies’ QuickBooks accounts. Similarly, if the parent company receives a split bill between your various entities, you’ll have to enter that bill into each company’s database.
Once you add a new company to your account, you’re essentially starting from scratch. You will have to manually invite all of the users you need to that entity’s account.
No, none of your banking information is added to the new company account, so you’ll have to connect it separately.
Unfortunately, QuickBooks does not automatically add the starting balance. Instead, you’ll have to enter all of that information yourself manually.
No, after adding a QuickBooks account to your list, you’ll have to move your lists of suppliers, inventory, etc., manually. In addition, if you make a change to one list, the other lists will not automatically update.
While QuickBooks is a great starting point for small businesses, it is designed specifically for small businesses. As you grow, you might want to consider adopting a different accounting software that automatically consolidates all your entities’ financial statements in real time.
If you don’t want to make the leap to a solution that is as robust and expensive as Netsuite, consider using SoftLedger.
SoftLedger was founded by an accounting manager that was frustrated by how long it took to finish the books and how cumbersome the overall process was. Therefore, he decided to solve the problem by building a real-time accounting system that automatically consolidates financial statements and makes it easy for multiple entities to close their books faster and always have access to reliable information.
He also wanted to make it more affordable and easier to implement than a system like Netsuite.
Here are just a few key elements of SoftLedger’s multiple entity accounting system:
To see for yourself how SoftLedger can make your team more efficient and improve your data quality, book a demo today.