SaaS Brief

How to Overcome the Challenges of Multi-Entity Consolidations for SaaS Companies

Multi-Entity Consolidation

External demands for a faster financial consolidation process are regularly placed on SaaS accounting departments. SaaS companies with multiple locations, subsidiaries, or operations, means that each entity will have its own chart of accounts, and more than likely has its own individual bank accounts, jurisdictions, and perhaps tax structures. When dealing with disparate entities, risk and error goes up, while financial accuracy goes down – stressing the importance of having a centralized system with access to real-time information.

Challenges arise when companies reach upwards of four or more entities – which tends to be when they start looking for solutions that can reduce manual work, lessen lengthy close times, and increase data visibility across all entities. In this guide, we’ll start things off by defining what a financial consolidation is and review some of the challenges that SaaS companies face, and then provide some tips to keep in mind with financial consolidation. 

What is financial consolidation?

Financial consolidation is an accounting process in which financial data is combined from multiple business entities and rolled up into one parent company. This process is typically done manually and can take weeks of tedious work, involving:

  • Information assembly: When financial data is spread across multiple subsidiary companies and subsidiaries within those subsidiaries, you can expect basic information assembly and organization to become quite tricky quite quickly.

  • Reporting: Financial consolidation for multiple entities is often more difficult than financial data gathering. An automated multi-entity and multi-currency global consolidation accounting solution can streamline your reporting process. Your consolidated financial statement will look like every entity within a parent company is operating as a single financial unit for the sake of simplicity.


As you expand your corporate structure for tax benefits or other reasons, your financial consolidation process will become more layered. 

Barriers to a fast, effective financial consolidation process

For established multi-entity SaaS companies doing global business, trusting manual processes to conduct financial consolidations is highly inefficient. Some of the most significant complexities that multi-location SaaS companies face include decentralized payables, inter-entity transactions, multiple currencies, global consolidations, which may be an indication that your accounting system is obsolete. 

4 commonly encountered problems in financial consolidation

Following are four of the more common problems with a spreadsheet-based financial consolidation process for multi-entity SaaS businesses:

1. Drawn out timelines and wasted resources. 

Multi-entity consolidation, when performed manually, requires a large investment of work and capital. The manual consolidation process steals time and money that could be spent on more profitable business activities. 

2. Missing data. 

Organizing the financial data of a single company is difficult enough. But when you rely on manual spreadsheets for something as complex as multi-entity consolidations, something is bound to go wrong sooner or later. That "innocent mistake" could carry financial penalties or legal consequences depending on whether you're publicly traded, and various other factors.

3. Lengthy closing period. 

During consolidations, each business unit has to close its books – a process you can speed up with automation – before submitting that data to the corporate accounting group. Multi-entity consolidations don't have to be so hard, though. Cloud-based accounting software uses automation to continuously close your books with each new transaction, eliminating the need for a monthly close cycle.

4. Copious back-and-forth. 

The traditional approach to multi-entity consolidations typically involves large volumes of emails being sent to gather and verify financial data. By contrast, cloud-based financial management software gives your accounting team centralized access to any financial data it might need. 

Hopefully, you're starting to see why the traditional financial consolidation process has room for improvement.

What makes financial consolidations so difficult for multi-entity SaaS companies? 

Globalization has made it more and more frequent for companies to have international subsidiaries in place. However, just because “going global” is more common for growing businesses doesn't necessarily mean the financial consolidation process is getting any easier.  

Here are three of the biggest factors that make consolidation accounting a challenge for multi-entity companies:

1. International geographic growth. 

Many SaaS companies have expanded their corporate network to various global locations. This makes it essential to seamlessly handle multi-entity consolidations in multiple currencies. It's also important to account for different compliance demands in different regions. Cloud-based accounting software can help with all of this and more. 

2. Data difficulties and delayed close. 

During multi-entity consolidations, it's crucial to have instant access to your organization's most recent and accurate information. During manual consolidations, accounting for late entries often means that the final close results remain unknown until the very last moment. 

3. The need to stay nimble.

In a world where SaaS M&A and multi-entity consolidations are increasingly common, accounting teams are expected to meet two parallel demands. First, they need to manage the actual consolidation process effectively. But they're also expected to help the organization scale seamlessly as it takes on new entities.

The financial consolidation process will probably never be fun, however, forward-thinking finance teams are using automation to make it as pleasant and straightforward as humanly possible.

Tips to keep in mind with financial consolidation

It's simply indisputable that machines are better than humans at most data-based tasks. So it should be no surprise that teams who leverage cloud-based accounting software can handle multi-entity consolidations faster and more effectively than those relying purely on manual financial consolidation methods. 

Further reading: A Day in the Life of SaaS FinOps – Consolidations  

Benefits of financial consolidation using ERP systems  

Modern ERP systems that embrace cloud computing serve multiple functions and play a very important role for the success of organizations across a swatch of industries. As companies grow in size and complexity, the need for a modern, cloud-based ERP system becomes imperative for multi-entity management. Some of the benefits to using ERP systems include: 

  • Built-in scalability: With physical and virtual acquisitions on the rise among SaaS companies, multi-entity consolidations are becoming more demanding. No matter how complicated your corporate structure grows, automation will enable your accounting team's effectiveness and efficiency to keep pace with your corporate complexity. 
  • Ability to ramp up new entities faster: Getting new entities off the ground can take time and effort, especially in the beginning stages when so many decisions need to be made. Automated software can use existing entities within your corporate structure to quickly and accurately configure accounts for new entities.
  • Real-time insights: Traditionally, manual multi-entity consolidations have prevented stakeholders and key decision-makers from being able to act on updated and consolidated data. Cloud-based financial management software completely reverses this, making your organization's latest financial info available at the press of a button.



SaaS finance teams are using cloud-based software to solve more complex problems with fewer resources. No matter how dense your organizational structure has grown, automation makes consolidation a breeze.

The need for solid processes

Multi-entity consolidations are often one of the most daunting tasks facing today's SaaS accounting team. But there is good news – you can bring it all together, quickly and accurately, with Sage Intacct. See how two different public SaaS companies handled their consolidation processes at scale: i3 Verticals and Corecard.  

Luckily, modern accounting teams have access to modern tools. Interested in learning more? Get an in-depth review of how Sage Intacct’s feature-rich solution for financial consolidations can help your SaaS company accelerate closings.

Next Generation SaaS Financial Consolidation

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