I was up until recently managing the accounts for 5 companies that were owned by the same 2 people. About a month ago 2 of the companies have gone into liquidation, and the directors have sold the other 3 companies. The new people were going to put the 3 companies into one lot of accounts, but as they are separate companies at Companies House, I have pointed out that each company has to have their own set of accounts.
The problem I have now, is I am not a management accountant and don't really know what I am doing. I have SAGE, and can input the invoices, payments and income for each company separately, but when it comes to management accounts, and producing monthly P&L, balance sheets, turnover, forecasts etc they want the 3 companies as a whole. Is there an easy way to do this? I am guessing it isn't as straightforward as printing off each companies reports and adding them all together?
I hope someone can help me with this, or at least point me in the right direction.
What you want to prepare is a consolidated set of accounts.
Provided there is no intercompany trading ie purchase and sales between the companies, or intercompany balances ie balances due/to each company at the period end and there isnt any parent/subsidiary relationship ie the companies are owned directly by individuals rather than one company owning another then it should be straightforward in adding together the profit and loss accounts and balance sheet to get a global position.
If any of the 3 situations above are present ie intercompany trading, intercompany balances or parent/subsidiary relationship then it is more complicated to prepare the accounts and would take a lot longer then on here to explain how to do it.
Thanks Mark, that helps. There may be some intercompany payments going on, but these will be documented with invoices and the money would actually move, rather than it just being a paper exercise. I'm hoping that would make it easier.
Whether the money moves or not - you need to effectively eliminate the interco transactions, otherwise sales and purchases will be artificially higher.
As Mark says, lots to explain - have the directors got a year-end accountant that could help you set something up?
