CFO’s are increasingly playing a more critical role for their companies. A recent survey from McKinsey revealed that the role of the modern CFO has evolved to take on much more than his, or her predecessor – https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-evolution-of-the-cfo
The main tasks relate to the books, financial reporting and statutory compliance – but imagine you are the CFO of a multi-national, multi-subsidiary company and the role becomes even more complex.
Closing the Books
Closing the books is a critical process that finalises a company’s transactions at the end of the financial year. It creates a report of all the revenue, expenses and dividend accounts of a business and will often involve dealing with multiple, disparate systems – and in some cases a large portion of the critical information will be held on spreadsheets. Sounds like a lot of work, doesn’t it?
Aside from the disparate locations of the data, there are so many other considerations too, such as different accounting standards, tax and reporting regulations, revenue recognition and amortisation rules for different regions and countries.
We can’t stress too strongly how important it is in cases like these that companies bite the bullet and adopt a comprehensive ERP system such as NetSuite, that can handle all those different requirements. Just having all your data in a single system, updated in real-time will save countless hours and reduce the probability of human error by a significant margin.
Multi-book is an advanced feature which allows a company to maintain multiple groups of financial records in parallel in order to produce financial statements in accordance with the required accounting standards (please note: multi-book cannot be added unless you already utilise NetSuite One-World in your NetSuite environment). You are permitted up to four books in addition to your primary book (five in total).
Common Use Cases
- Where one subsidiary is configured with a currency that is different to the local currency in another and is required to generate financial reports in the local currency, Multi-Book accounting can be configured to allow subsidiaries to report in a different currency.
- You want to post transactions to two different accounts in different books.
- You need to amortize expenses differently in two different books.