Companies need a view of finances that’s both deep enough to see the details and wide enough to look across all operations globally. Unfortunately, that’s often not as easy as it sounds.

A key approach to accomplishing this is to use a multidimensional model structure. This accommodates different account coding schemes within the same company, giving the Chart of Accounts (COA) the flexibility to measure profitability in many different ways. That way each line of business can measure profitability the way it needs to, and at the same time, there is a single reporting ledger so finances are always in balance. In contrast to “Code Blocks” that are flexible once, the multidimensional model structure is built to accommodate diversity and can be updated on the fly.

Business needs continually change and the multidimensional model can accommodate that. A company may need, for example, to account for both GAAP and IFRS, or need to report profitability against different criteria for different business units. If a company has recently acquired or merged with another business, it’ll need to accommodate the new operation in its COA. Additionally, as management and industry practices evolve, a company may change its key performance indicators (KPIs) measuring profit and performance.

With this flexible accounting approach, multinational corporations and companies doing business overseas can get the visibility and insight they need to achieve their goals as well as handle business and industry-wide changes with minimal disruption.

To learn more about addressing change in your organization whether it’s caused by a merger or acquisition, global expansion, or a new line of business, download our free white paper, “Accounting for Change” or visit UNIT4 Business Software’s website for maximum flexibility and minimum cost and disruption.

There are many issues companies face during mergers and acquisitions – a clash of cultures, a change of management and concerns about job security among them. While these broader issues play out in the executive suite and around the water cooler, there are also very pressing issues that play out in the back office.

Often when companies combine through mergers or acquisitions, their methods for financial management and accounting are very different. This is a major problem. The new company has to have its finances in order from the start, but it’s hard for finance professionals to quickly assimilate accounting data from the two different companies. Often, different companies collect different data, have different processes and reports and use different accounting systems. Compounding these issues, the two companies might be located in different countries, with different languages, taxes, regulations, currencies.

What are the best ways to get your two accounting departments in synch? Here are some proven strategies:

• Get the key stakeholders involved. Make sure you get input across both organizations so you can implement best practices more effectively.
• Establish standard processes to effectively capture, store, and maintain financial data.
• Consolidate accounting systems into one view. Standardize on the same accounting system and merge AP, AR and GL into one Unified Ledger to get a single view across all your operations. Some companies implement a Financial Shared Service Center to streamline and standardize processes.
• Implement a flexible reporting structure that allows each line of business to measure profitability and business performance according to its own needs.
• Ensure that your system has multi-everything capabilities to handle complex corporate structures across boundaries – multiple currencies, taxes, languages, regulations, etc.
• Plan for change and make sure that your system and processes are flexible enough to accommodate them.

By implementing these and other accounting best practices, you can help your newly formed company get off to a good start and avoid one of the key sources of stress during a merger or acquisition.