A family-owned building materials group ran five separate companies: the wholesale business, the transport arm, the installation crew, a small manufacturing line, and a property holding entity. Same family, same building, same office — but three different accounting systems, a set of intercompany loans that “everyone kind of knew about,” and a month-end closing process that lasted 18 working days.
Here’s what the finance director said when we asked how the group was performing, and it should make any multi-entity owner wince: “We don’t really know what the group made last month.” Not “we’re still reconciling.” Not “we have a slightly different view.” The most senior finance person in the building had no solid answer for the group’s actual profit.
Intercompany transactions are the silent killer
The transport company invoiced the wholesaler for deliveries. The wholesaler paid late. The manufacturing line bought raw materials from the wholesaler at one price and sold finished goods back at another. Each entity’s books were accurate on their own; the moment you consolidated, the intercompany balances fought each other, and two accountants spent four days chasing one difference.
The ERP Consulting work introduced one rule that erased an entire category of pain: every intercompany transaction gets a documented invoice with a matching number on both sides. If the transport arm raises an invoice for a delivery, the wholesaler’s system must show that exact document the same day. No exceptions, no “we’ll book it next month.”
How the closing went from 18 days to 4
- All five companies post to a shared ledger structure with the same chart of accounts and the same month-end cutoff date.
- Intercompany balances are checked weekly, not at month-end; any unmatched pair over $5,000 gets escalated the same Friday.
- Consolidation reports run automatically from the shared data, eliminating the spreadsheet that “usually needs a manual adjustment.”
The first month after the change, the close took 9 days. The second month, 6. By the fifth month it was steady at 4. And for the first time, the owners got a single page showing every entity’s revenue, cost, and profit — with numbers the CFO could defend in front of the bank.
The ERP Consulting follow-up at month three included a simple test: the CFO produced the group’s consolidated profit in under an hour, from memory of where the report lives, not from a week of chasing. That single capability — one version of the truth for the whole family — changed how those owners made decisions. When you can see the whole picture on a Tuesday morning, you stop managing by guesswork.