When you run multiple businesses, managing finances can get increasingly complicated. Each entity has different revenue streams, tax obligations, and reporting requirements. Traditional accounting software can only manage finances for each business separately. But accounting software for multiple businesses can track finances across multiple ventures. It’s designed to let you manage financial data for several businesses from one place.
More businesses are turning to automated finance tools, with the global accounting software market expected to increase from about $13.8 billion USD in 2023 to over $24 billion USD by 2030. Below, we’ll discuss why businesses that manage multiple entities need specialised software, what features to look for, and how this software can simplify tax preparation.
What’s in this article?
- Why do businesses that manage multiple entities need specialised software?
- What features should accounting software for multiple businesses have?
- How can accounting software simplify tax preparation for multiple businesses?
Why do businesses that manage multiple entities need specialised software?
When businesses grow to encompass multiple entities – whether they’re subsidiaries, branches, or entirely separate ventures – managing their finances becomes more complex. Each entity has its own accounts, budgets, tax obligations, and compliance requirements, and trying to handle all these considerations with manual processes can be difficult to navigate. Here’s how specialised accounting software can help.
Centralised view: Specialised software allows you to manage all your entities in a centralised platform, and it organises data while keeping each entity’s financial records distinct. With this centralised view, you can avoid having to toggle between multiple systems or manually consolidate data from spreadsheets.
Consolidated financial statements: The software can generate consolidated financial statements across entities to show your overall business health. This level of transparency is important for investors, stakeholders, and compliance.
Compliance: Specialised software is built to handle multiple sets of tax laws, reporting standards, and operational regulations. It comes with features such as multi-currency support, automated tax calculations, and entity-specific compliance tools to help keep you in good standing – no matter how diverse your operations are.
Automation: Specialised software automates repetitive tasks such as payroll, invoicing, and expense tracking across multiple businesses; it also allows shared settings so you don’t have to re-enter data for every entity. This saves time, reduces the risk of errors, and frees up your team for more important tasks.
Scalability: Specialised multi-entity software is designed to grow with you. Whether you’re adding a new business line, expanding into a different country, or increasing transaction volumes, the right platform can scale with ease.
Fewer errors: The software reduces the risk of costly financial mistakes with built-in checks, automations, and compliance safeguards. Using spreadsheets or generic software to manage these features can increase the chance of miscalculations or compliance oversights.
What features should accounting software for multiple businesses have?
Different businesses have different accounting needs, so managing multiple businesses means you have your own set of accounting needs, too. As you look for the right software, first consider a system that handles multiple businesses as an inherent feature – not as a workaround. This means the accounting software should let you:
Manage as many entities as you have without hitting arbitrary limits
Keep the financial data for each business completely separate while still enabling centralised access when you need it
Easily switch between entities from one dashboard without logging in and out
Beyond these basic functionalities, here’s what to look for in your accounting software.
Consolidated reporting
Rather than looking at each business in isolation, try to understand the bigger picture. The right software makes consolidated reporting easier by:
Automatically pulling data from all your entities and generating comprehensive financial statements
Letting you analyse performance metrics – such as cash flow and revenue – across all businesses
Creating reports that meet specific needs, whether they’re those of investors, tax authorities, or internal planning
Automation
When you’re overseeing multiple businesses, manual repetition can slow down operations. The right software automates time-consuming, error-prone tasks such as:
Handling recurring invoices, shared templates, and batch invoicing for similar transactions across entities
Calculating tax that’s customised to each business’s location and rules
Managing scheduled payments, reminders, and reconciliations
Tax and compliance support
Compliance can get intricate when your businesses operate in different regions, especially when multiple currencies or tax systems are involved. Look for software that:
Handles multi-currency transactions with real-time exchange rates and accurate reporting
Tracks compliance requirements and automatically generates tax reports for each business
Adapts to different regulatory frameworks, whether they’re local tax codes or international accounting standards
Scalability
If you’re managing multiple entities, you’re likely planning to expand. Your software should offer:
The flexibility to add new businesses or users
The ability to handle increasing transaction volumes or more complex reporting as you scale
Multi-user access and permissions
The ability to easily collaborate is a particularly valuable feature when managing multiple businesses. Look for software that enables you to:
Set different levels of access based on roles (e.g. owners, accountants, auditors)
Track who’s doing what for accountability purposes and to prevent mistakes
Integration capabilities
Accounting software should fit easily into your existing workflow. Your software should be able to integrate with:
Payroll systems so you’re not entering data twice
Customer relationship management (CRM) systems and e-commerce platforms for real-time financial tracking
Payment gateways to simplify invoicing and collections
User-friendly interface
Managing multiple businesses is complicated enough; your software should be intuitive to use. An effective interface should:
Make setup straightforward, even for users who aren’t tech-savvy
Let you move between entities, reports, and features without feeling like you need a user manual
Come with accessible support or tutorials
Budgeting and forecasting
Careful and meticulous planning for the future is a necessity when you have multiple businesses. The right software helps by:
Letting you create and compare budgets for each business or across the group
Providing forecasting features to predict cash flow, expenses, and growth opportunities
Security and data privacy
Security is foundational, especially when you handle sensitive financial information from multiple entities. Look for features such as:
End-to-end encryption, particularly for cloud-based tools
Regular backups to prevent data loss
Compliance with privacy laws, including the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA)
Customisation options
No two businesses are exactly alike, and your software should reflect that. The right software lets you:
Tailor the chart of accounts for each entity
Customise reports to meet specific stakeholder needs
Adjust workflows to match how you actually operate
Cost efficiency
The software should deliver value without hidden surprises. Look for software that has:
Transparent pricing that can scale with your needs
No additional fees for important features such as tax reporting and integrations
A trial period or demo so you can test it before committing
How can accounting software simplify tax preparation for multiple businesses?
Managing multiple entities means managing multiple sets of tax rules, deadlines, and reporting requirements. The right accounting software can take on a lot of the work involved and make tax preparation faster, more accurate, and less stressful.
Centralised data management
One of the biggest challenges in tax preparation for multiple businesses is gathering all the necessary information. Accounting software centralises your financial data, so you don’t have to dig through separate spreadsheets, emails, or documents. Some of the benefits of having your data centralised includes:
All your entities’ financial records organised in one system
Easy access to historical data so previous tax filings are just a few clicks away
The ability to switch between businesses without the need for multiple logins or platforms
Automated tax calculations
Accounting software can track different tax rates, rules, and deductions for each business with features such as:
Built-in tax calculators that automatically apply the correct rates based on location and transaction type
Customisable settings for different tax structures
Real-time updates for changing tax laws
Support for multiple jurisdictions
Managing varying tax codes and regulations can be a logistical challenge if your businesses operate in different states or countries. Specialised accounting software can help by:
Supporting multiple tax jurisdictions within the same platform
Automatically adjusting for local tax rates, value-added tax (VAT), goods and services tax (GST), or sales tax as needed
Generating jurisdiction-specific tax reports for quick compliance
Providing multicurrency support for cross-border tax reporting
Reporting and filing
Tax authorities require specific forms and reports with the correct formatting. The right software can:
Generate tax reports customised to meet regulatory requirements
Provide prefilled templates for common tax forms such as 1099s and VAT returns
Enable direct e-filing for supported tax agencies, reducing paperwork and potential errors
Expense and deduction tracking
One of the most tedious parts of tax preparation can be identifying deductible expenses and categorising transactions. Accounting software makes this easier by:
Automatically categorising expenses based on preset rules or your past behaviour
Flagging potential deductions such as business expenses, mileage, and home office costs
Generating detailed expense reports for use in audits
Consolidated tax overview
When you manage several entities, you need to understand each business’s tax obligations. Accounting software can provide:
Dashboards that summarise each entity’s tax status, including due dates and amounts owed
Consolidated reports to show your total tax liability across all businesses
Alerts and reminders for upcoming deadlines
Year-round preparation
You should begin preparing for tax season far in advance. Accounting software can help you prepare throughout the year by:
Reconciling bank accounts and transactions in real time
Tracking income and expenses as they happen
Storing digital copies of receipts and invoices for easy reference during audits or filings
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.