Company, branch or cost centre?
The first decision is what each unit is. A separate legal company has its own tax number, bank accounts and statutory accounts, and must be set up as its own company in the system, with its own books. A branch of the same company shares those books and needs only its own warehouse, its own staff and a cost centre to report its results.
Getting this wrong is expensive to undo. A branch set up as a company splits one set of books in two; two companies set up as one mix figures that must later be pulled apart by hand.
- Its own tax registration: a separate company.
- Its own bank accounts and statutory accounts: a separate company.
- A different books currency or country: a separate company.
- Same company, another city: a branch with its own warehouse and cost centre.
- A route or a team: a cost centre, not a company.
TipAsk your auditor which units file their own accounts; that list is your list of companies.
Settle each company’s fixed facts first
Some facts about a company are fixed for good once it starts trading: its code, its books currency and its country. Others shape every date in its books: the month its fiscal year starts and the time zone its business days are read in. Settle all of them before the first transaction.
- Choose a short code for each company, used on its document numbers.
- Set its books currency and country.
- Enter its tax number and logo for printed documents.
- Set the month its fiscal year starts.
- Set its time zone, so a sale just before midnight lands on the right day.
Number each company’s documents apart
Two companies must never issue the same invoice number, and a reader should be able to tell from a number which company issued it. Give each company its own sequences and put its code at the front of each number. Add the year, or the fiscal year, so the counter can restart each year without collisions.
TipKeep the number template the same shape in every company, so staff who move between them read numbers the same way.
Decide who works where
Most staff belong to one company and should see only its records: its customers, its stock, its documents. A few, such as the owner, the group accountant and whoever runs the system, need every company. Decide which of the two each user is before you add them, and keep field reps tied to the company whose stock they carry.
Plan for the people in between. A regional manager over two of five companies cannot be limited to those two in Axon Suite yet: a user is tied to one company or has the whole account. Either give the whole account and rely on the role to limit what they do, or tie them to their main company.
Trading between your own companies
When one company in the group sells to another, both sides must record it: a sales invoice in the seller and a vendor bill in the buyer, for the same amount on the same day. Treat the sister company like any other customer and vendor, with its own record in each set of books, so the balances can be agreed.
At each month end, the seller’s receivable from the sister company and the buyer’s payable to it should match to the riyal. A gap means an invoice recorded on one side only, and it is far easier to find in the month it happened.
TipGive each sister company the same customer and vendor code in every set of books, so its balances are easy to find and compare.
Group figures: plan to add them up yourself
Each company produces its own statements in its own books currency. A group view adds them together and removes what the companies sold to each other, so internal sales do not inflate the group’s revenue. This step is called consolidation.
Axon Suite does not consolidate across subsidiaries yet. Plan to take each company’s statements at month end, translate any kept in another currency, add them up and remove the sister-company sales and balances, in a spreadsheet or your accountant’s own tool.
Checklist: Several companies checklist
- List which units file their own accounts
- Set up each legal company as its own company
- Run branches as warehouses and cost centres
- Fix each company’s code, currency and country before trading
- Set each company’s fiscal year start and time zone
- Put the company code on every document number
- Decide for each user: one company or all
- Agree sister-company balances every month
- Plan the group consolidation outside the system