Multi company allows you to add more than one single company to your system. This is typically done when you have companies in different countries across the globe, or sometimes when you wish to run different businesses in the same country in different companies. The typical scenario is when there is a factory in one country and sales offices in other countries. For companies in the same country, the reason for running different companies may be because of different ownership structures.
Each company in the system will have a different connection to a different external accounts package, (or to different unique companies in the same system if that system supports that).
Groups of companies in the system can be grouped into "Regions". This is purely for reporting purposes, so for instance several companies in different European countries can be grouped as "Europe" or "EMEA".
Each company must have at least one business unit and that business unit needs at least one theme and one inventory location to function. The theme stores address details and the logo. If there is more than one theme in a business unit, then one is the default. Users can have rights at the system level, company level or business unit level. Each user has a default inventory location which is used when they enter orders or invoices to set the default deliver locations and default theme.
Different companies in one system can have integration to different external systems such as e-commerce and third party logistics providers.
Logical hierarchy
| Level | Examples | Notes |
|---|---|---|
| Region | EMEA, APAC | Groups companies into one or more regions for reporting purposes. Can be changed later. |
| Company | Acme, Inc. Acme Ltd | Legal entity that owns orders, inventory and invoicing. Each has a localisation, a home currency, chart of accounts and own invoice numbering series. Owns the bookkeeping connection to external accounts. Home currency and bookkeeping can not be changed if there is data in the system for the company. The localisation is the country of the company. This sets the appropriate tax codes, name of tax (e.g. VAT or GST) and other minor localisation issues. |
| Business Unit | West coast, East coast | The business entity identitifed by management. Typically will have it's own address and image (theme), but in some cases can have multiple themes. |
| Theme | Retail, Wholesale | The address and logo of the business unit for customer-facing reports. Typically one business unit will have one theme unless the business unit wants to sell products under different brand names. Some external account systems support multiple themes. |
| Inventory location | Acme stores. | One business unit can have multiple inventory locations. Transfer between locations inside the same company uses the material transfer process. Transfer between locations at different group companies uses sales and purchase orders. |
| Work cells | Assembly, painting, machining | Work cells can be created at inventory locations. These are then manufacturing locations. |
| Shelf | A1, B2 | Shelves locations can be marked by item. If "dynamic" shelving is needed, an external warehouse management system (WMS) must be used. |
Internal Orders and Inventory Transfers
When goods are moved between stock locations inside a same company, then the Material Transfer screen is used.
When goods are moved between two companies then an Internal Order is made. This is a combination of a sales order in the sending company and a purchase order in a receiving company.
If a drop shipment sales is made from one company to a customer served by another company, then an internal order is also needed.
Read more about Internal orders
Currencies
Multi company operations may involve several currencies.
- Home currency of each company
- The currency of the customer or supplier
- The "Group currency" is used for cost reporting
A sale of goods from one company to a customer served by another company (for example from a factory to a customer served by a sales office abroad) needs to take into account the home currency of the originating company, the currency of the sales order, the currency of the inter-company order, the home currency of the sales office and the reporting currency of expected costs. Normally several of these will be the same to prevent it becoming too complicated.
Inventory Valuation
Inventory valuations are maintained using FIFO principles in the home currency of each company.