Can Xero really handle the complexities of multi-entity accounting, or is it just another overhyped solution? We went straight to the source for answers in a candid conversation with Head of Finance at 47-entity organisation Outernet, Paresh Makwana, and Annie Hawkins, Account Manager - Franchises & Membership Groups at Xero. Buckle up as we reveal the inside scoop.
‍

At its core, Xero was born in the cloud as a platform designed for accountants and small businesses.

It’s no secret - it was NOT built to tackle the complexities faced by group organisations. So why is Xero's software topping the charts for groups in this expert-led report? Alexander von Schirmeister (MD UK & Emerging Market at Xero), gets straight to the point:

"Today, worldwide, Xero has thousands of apps available in the app store where you can connect third-party services. Multi-entity is a very interesting case where we're simply aware that at Xero we are not focused on, and cannot focus on, building out all of the features and functionality to satisfy multi-entity. But we have companies like Mayday who do multi-entity for us, better than we possibly could."

That's right – while its primary route to market is through accounting and bookkeeping firms, Xero isn’t just a one-size-fits-all.

From its inception, Xero’s open ecosystem has been designed to allow third-party apps to integrate with Xero.

By combining Xero's core accounting capabilities with best-of-breed solutions - for functions like intercompany balances, consolidated reporting and spend management - groups on Xero can now find everything they need to suit their unique requirements.

‍With over 1,100 apps, Xero is a solid base to add the functionality needed to tackle the complexities of different multi-entity set-ups.

And it isn't just about trying to save money by avoiding the costly switch to an ERP.

Rather than being locked into an inflexible all-in-one system, the Xero ecosystem provides superior functionality, automation and the ability to adapt your tech stack as your needs evolve.

But whilst integrating with third-party apps can solve part of the problem, how can Xero’s platform work for multi-entity businesses?

We interviewed multi-entity Xero customer Paresh and Xero Account Manager Annie to uncover practical advice on tips for making Xero work for your multi-entity set-up.

How to efficiently manage your group on Xero

The secret lies in Xero HQ.

Annie explained:

“Xero HQ is a central hub for storing, managing and centralising all your Xero subscriptions. It offers features that streamline how you work with Xero overall. "

Here are three Xero HQ features that Xero multi-entity clients find particularly invaluable:

1. First, there's the ability to simplify and standardise the setup for new organisations. You can create a standard chart of accounts and use it across multiple entities, which is fantastic for consistency and comparison.
2. Another major feature is the centralised user management. You can onboard and offboard staff across multiple subscriptions with just a few clicks, which is a huge time-saver.
3. Xero also offer custom report generation that can be used across the entire group, and an informative live dashboard that gives you key information without having to log into individual subscriptions.

This can help multi-entity businesses cut down admin time and provide greater visibility across Xero organisations.

Paresh Makwana, Head of Finance at Outernet London (managing a whopping 47 entities), confirmed the impact: "Initially, I hesitated because I thought Xero couldn't manage groups. But after getting a demo of Xero HQ, everything fell into place.”

“We've seen significant efficiencies, savings in people's time, and improved reporting. Xero HQ has become a crucial tool for managing our 47-entities across different sectors."

"The columns in Xero HQ, like bank feed expiry dates and outstanding reconciliations, serve as a checklist for our team. It's helped us build efficiencies and maintain better control over our bank reconciliations. The ability to have a standard chart of accounts that we can customise across different industries has been invaluable."

How to roll out your standard chart of accounts from Xero HQ

When a new entity joins your Xero group, you can effortlessly roll out your standard chart of accounts from Xero HQ. This not only saves precious time, but also ensures rock-solid consistency across your entities. It makes comparing companies a breeze and cuts down on tedious mapping when using consolidation apps.

Annie explains how in the snippet below:

So, is Xero really a cost-effective and scalable solution for multi-entity accounting? The evidence says yes.

Next steps if you're considering moving your group to Xero

1. Visit: www.xero.com/uk/campaign/xero-for-groups/ to learn more
2. Download the complete 2024 Xero for Groups report
3. Subscribe to this newsletter for weekly insider tips from the groups scaling with Xero

And in the words of Paresh who's already made the switch:

"Don't hesitate to reach out and learn from others who are using the system. When we were considering the move, talking to other Xero HQ users was invaluable. Also, take full advantage of the support Xero offers. Their team has been instrumental in our successful implementation."

‍