Xero for Multi-Entity Companies: Consolidation Made Easy
Running multiple entities or subsidiaries introduces complexity, shared costs, intercompany loans, and multi-currency reporting. Without proper structure, bookkeeping becomes inconsistent and consolidation slow. Xero simplifies this with flexible multi-entity management tools. This guide explains how to organize, maintain, and consolidate multiple companies using Xero efficiently and accurately.
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Step 1: Create Separate Xero Organizations for Each Entity
Each legal company should have its own Xero organization.
- Keeps data, chart of accounts, and bank feeds separate.
- Enables individual tax filings and permissions.
- Maintains clear audit trails for each business.
This separation is essential for compliance and clean reporting.
Step 2: Use a Consistent Chart of Accounts Across Entities
Uniform account names and numbers make consolidation easier.
- Start with a master chart of accounts.
- Apply the same structure to each Xero file.
- Avoid entity-specific naming unless required.
Consistency ensures accurate consolidated reporting later.
Step 3: Manage Intercompany Transactions
When entities share expenses or loans:
- Create Due To / Due From accounts in each file.
- Record mirrored entries in both entities.
- Reconcile balances monthly so intercompany totals net to zero.
This keeps all internal transfers transparent and balanced.
Step 4: Automate Consolidation with Tools
Xero itself does not natively consolidate multiple organizations, but add-ons fill the gap.
- Fathom: Consolidates entities for P&L, Balance Sheet, and KPIs.
- Spotlight Reporting: Offers customizable dashboards for group performance.
- Syft Analytics: Handles multi-currency conversions and eliminations.
These apps connect directly to each Xero organization and produce group reports automatically.
Step 5: Handle Multi-Currency Accounting
If entities operate globally, enable multi-currency in Xero.
- Record transactions in local currency while reporting in home currency.
- Use Xero’s built-in exchange rate tracking for revaluations.
- Verify that consolidation tools support currency translation.
This prevents inconsistencies in consolidated financials.
Step 6: Review and Lock Each Entity Monthly
Before consolidating:
- Reconcile and close each entity’s books.
- Lock prior periods to maintain data integrity.
- Generate verified trial balances for consolidation.
Regular discipline ensures smooth consolidation without backtracking.
Step 7: Centralize Reporting and Oversight
Use one dashboard for group metrics: revenue, gross margin, and expenses by entity.
Assign user roles across all organizations for visibility while maintaining security and access control.
Explore our complete bookkeeping service plans.
Learn how monthly bookkeeping delivers timely reports and insights.
Why Multi-Entity Management in Xero Works
- Separate yet standardized books for compliance and clarity
- Scalable reporting for growing portfolios
- Easy consolidation through connected apps
- Lower total software cost than enterprise systems
With the right workflow, Xero delivers enterprise-grade multi-entity accounting for small and mid-sized groups.
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FAQs
Can I manage multiple companies in one Xero account?
Each company needs its own Xero organization, but you can access all from one login.
How do I consolidate multiple Xero entities?
Use add-ons like Fathom, Spotlight Reporting, or Syft Analytics.
Can Xero handle multi-currency consolidation?
Yes, with multi-currency enabled and supported consolidation apps.
How often should I reconcile intercompany accounts?
Monthly reconciliation prevents variances and speeds up consolidation.
Need help with Xero setup, cleanup, or monthly bookkeeping? Get a free consultation with RemoteBooksOnline. Our Xero-certified experts handle setup, reconciliation, and reporting for businesses of all sizes. Start Your Free Consultation
