Multi-entity accounting

A matching chart of accounts is set up or reconciled across every entity in the structure, with one accounting policy (cash or accrual, one depreciation method, one revenue recognition approach) applied consistently rather than left to whichever bookkeeper handled that entity first. Intercompany balances are tracked in a shared schedule so both sides of every transfer, loan, or management fee agree before period close. At close, we prepare standalone financial statements for each entity, which is what that entity's own lender, landlord, or state filing usually needs, and a consolidated profit and loss, balance sheet, and cash flow statement for the group, with intercompany eliminations already applied. New entities added to the structure, whether by acquisition or new formation, get onboarded onto the same chart and policy before their first close, not retrofitted after a year of drift.

We start with a structure review: how many entities, what relationship (parent-subsidiary, sister entities under common ownership, a variable interest entity), what basis each currently runs on, and where the charts of accounts already diverge. From there we build or adjust the shared chart of accounts and set an intercompany tracking schedule before touching a single month's close. Each subsequent month, entities close on their own standalone basis first, intercompany balances get confirmed to agree on both sides, then the group close runs eliminations and produces the consolidated set. A controller reviews the consolidation before it goes out, since an elimination entry that is off by even a small amount can distort group margin in a way a standalone review would never catch.

Any US business with two or more related entities that share ownership, management, or day-to-day operations. That covers a multi-location restaurant or retail group where each location is its own LLC for liability reasons, a real estate operator running a separate entity per property with a management company on top, a startup with a Delaware parent and an operating subsidiary, or a family business that has grown into a holding structure without anyone formally consolidating it. If you are only tracking one entity, or if your entities do not actually share ownership or intercompany activity, standard full-service outsourced accounting or general ledger maintenance covers what you need without the consolidation layer.

The most common state we inherit is a structure where each entity was set up by a different bookkeeper or accountant over time, so the chart of accounts, the depreciation method, and even the fiscal year end do not match across entities. The second is intercompany balances that were never reconciled, so entity A shows a $40,000 receivable from entity B while entity B shows a $35,000 payable to entity A, and nobody can say which number is right. The third is a consolidated statement that was built once, manually, in a spreadsheet, and never updated with a repeatable process, so every close starts from scratch instead of from a working template.

A consolidation is not just adding entity balances together. Intercompany receivables, payables, revenue, and expense have to be eliminated so the group's statements show only transactions with outside parties. If entity A pays entity B a management fee, that fee is revenue to B and an expense to A, and both entries need to disappear on consolidation, since the group did not actually earn or spend anything by moving money between its own companies. Ownership percentage matters too: a wholly owned subsidiary consolidates fully, while a majority-owned entity with an outside minority owner requires a noncontrolling interest line so the minority owner's share of equity and earnings is shown separately rather than absorbed into the parent's numbers. We apply the same elimination and consolidation logic every period so the group statements are comparable month over month, not rebuilt differently each time.

QuickBooks Online and Xero both support multi-entity structures with the right chart of accounts discipline and, for QuickBooks, a consolidation tool layered on top since it does not consolidate natively. NetSuite and Sage Intacct have native multi-entity and consolidation functionality built in, which is usually the better fit once entity count or transaction volume grows past what spreadsheet-assisted consolidation can handle cleanly. We work inside whichever platform the group already runs on and will tell you plainly when the structure has outgrown it.

Multi-entity accounting is scoped per entity, since the work scales with entity count, intercompany transaction volume, and how often a consolidated set is needed rather than with the size of any single entity. The published rate card lists a per-entity add-on for consolidation-eligible structures, and larger or more complex groups move to a custom-scoped tier confirmed after a review of the actual structure. Your exact fee is put in writing before any work begins, and it changes only if the structure itself changes.