The problem of management accounting in a group of companies
Posted: Thu Jan 23, 2025 8:05 am
The problem of management accounting in a "group of companies"
Recently, the concept of "group of companies" has come into use for management accounting purposes. This is due to the fact that business is scaling and the organization of commodity and cash flows is becoming more complex.
Source: shutterstock.com
The current legislation does not provide a paraguay mobile phone numbers database precise definition of a group of companies, but from a factual point of view, it is a conglomerate of commercially oriented organizations that have a common business, which is characterized by the presence of intra-group business transactions between participants.
Since business owners are primarily interested in the overall performance of the group of companies, the task of the financial and economic service is not only to implement management accounting at each enterprise of the group of companies, but also throughout the group. As a result, consolidated management reporting of the group of companies is formed based on the data of this accounting.
The difficulty is that it is impossible to obtain reliable information and reporting on a group of companies by simply adding up the reports of each company in the group, due to the intra-group turnover between them. Consolidation of the management balance sheet from the balance sheets of the group companies requires a large number of corrective actions.
Frequently Asked Questions about Management Balance Sheet
By drawing up a management balance sheet, you can find out the real state of affairs of the company in financial terms. Management and owners see whether the business is growing or, on the contrary, withering, and, depending on this, make effective management decisions.
How to form a management balance in 1c 8.3 accounting?
The ability to generate this report appears if the following functional options are set: “Generate management balance” and “Consider other assets and liabilities”.
The formation of the management balance occurs in accordance with the following algorithm:
In the menu, follow the following route: Financial result and controlling – Financial result reports – Management balance.
Then you need to specify the period and frequency of report generation.
After clicking on the “Settings” button, you need to:
select the report currency;
set the appropriate flag for asset/liability grouping;
make other adjustments if necessary.
Then you need to click the "Close and Form" button.
The balance sheet structure will be formed based on the list of assets and liabilities, which will be available via the route Financial Result and Controlling – Asset and Liability Items.
The management balance sheet for asset and liability items is maintained in accordance with the double entry principle using a simplified accounting model.
Recently, the concept of "group of companies" has come into use for management accounting purposes. This is due to the fact that business is scaling and the organization of commodity and cash flows is becoming more complex.
Source: shutterstock.com
The current legislation does not provide a paraguay mobile phone numbers database precise definition of a group of companies, but from a factual point of view, it is a conglomerate of commercially oriented organizations that have a common business, which is characterized by the presence of intra-group business transactions between participants.
Since business owners are primarily interested in the overall performance of the group of companies, the task of the financial and economic service is not only to implement management accounting at each enterprise of the group of companies, but also throughout the group. As a result, consolidated management reporting of the group of companies is formed based on the data of this accounting.
The difficulty is that it is impossible to obtain reliable information and reporting on a group of companies by simply adding up the reports of each company in the group, due to the intra-group turnover between them. Consolidation of the management balance sheet from the balance sheets of the group companies requires a large number of corrective actions.
Frequently Asked Questions about Management Balance Sheet
By drawing up a management balance sheet, you can find out the real state of affairs of the company in financial terms. Management and owners see whether the business is growing or, on the contrary, withering, and, depending on this, make effective management decisions.
How to form a management balance in 1c 8.3 accounting?
The ability to generate this report appears if the following functional options are set: “Generate management balance” and “Consider other assets and liabilities”.
The formation of the management balance occurs in accordance with the following algorithm:
In the menu, follow the following route: Financial result and controlling – Financial result reports – Management balance.
Then you need to specify the period and frequency of report generation.
After clicking on the “Settings” button, you need to:
select the report currency;
set the appropriate flag for asset/liability grouping;
make other adjustments if necessary.
Then you need to click the "Close and Form" button.
The balance sheet structure will be formed based on the list of assets and liabilities, which will be available via the route Financial Result and Controlling – Asset and Liability Items.
The management balance sheet for asset and liability items is maintained in accordance with the double entry principle using a simplified accounting model.