Mergers and Acquisitions

What are Mergers and Acquisitions?

Mergers and acquisitions involve the consolidation of multiple companies or associated assets. The terms are often used interchangeably but one involves one company purchasing another company (acquisition), while the other is a combination of companies (merger). There are numerous reasons that your organization might merge with or acquire another company, but they often stem from a desire for rapid growth and strategic acquisition of product lines, new services, or expertise.

Regardless of the differences between mergers and acquisitions and the reasoning behind your M&A, there are common pain points often associated with both post merger integration as well as post acquisition integration. These pain points often center around the complexity of multi-company or multi-entity accounting and the M&A integration of what were once entirely separate companies.

Whether you are planning to merge with or acquire another company or are in the post M&A integration phase it is important to understand the following common pain points related to multi-company accounting to insure you get the most out of your M&A.

Accounting for Mergers and Acquisitions:
Common Pain Points

accountant struggling post M&A integration

In an effort to help you mitigate common M&A accounting challenges, we will explore software solutions, but before we get there it is important that you first fully understand the issues often faced post merger and post acquisition integration. With this in mind, let’s break down these common pain points:

Complex Accounting & Reporting Structures:

M&A integration often create complex accounting structures including, but not limited to multi entities, subsidiaries, and multi company. Managing these complex business accounting configurations can be challenging and time-consuming leading to excessive costs for your company. In addition, it creates an environment where it is difficult to maintain the integrity of your business data as well as user access and security due to the complexity of your IT ecosystem and business application portfolio.

Inefficient Accounting Processes:

Another common issue in post M&A integration is often the lack of automation leading to the necessity for manual data entry and reconciliation which are not only time-consuming processes but are highly error-prone, both of which are costly.

Lack of Scalability:

Traditional accounting systems may be unable to handle the complex financial reporting requirements post M&A, especially for multi-entity companies. This can be problematic in that it limits the scalability of your accounting department.

M&A Integration Challenges:

The integration of financial data from different systems and sources is difficult, especially when they are not natively compatible. This can lead your company into a myriad of issues including costly data errors, duplicate data, and inconsistencies in your financial reports.

Poor Data Visibility:

Data visibility is always paramount to successful accounting processes, especially in post M&A integration. Lack of visibility into your accounting data at this stage is often the result of changes to your financial reporting structure and must be proactively handled with the appropriate multi-company accounting software.

Post M&A Compliance Issues:

Post M&A your company may run into the need to comply with differing financial and accounting regulations. This is often the case because such regulations differ by location or jurisdiction. It is important to be proactive on this front because the failure to comply with policies can result in penalties and complicated legal issues.

Regardless of what M&A integration stage you find yourself in it is vital to recognize and address the common pain points of complex accounting and financial reporting structures that are characteristic of post M&A integration. Because these issues can notably result in excessive costs, data errors, compliance problems, poor visibility, and lack of scalability. To mitigate these challenges, it is important to have a proactive approach and utilize appropriate multi-company accounting software that can handle the complexities of M&A integration. For, by doing so, you can ensure a smooth transition and avoid costly mistakes

M&A Finance:
The Benefits of Multi-Company Accounting Software

Post merger or acquisition accounting software is a software solution that enables you and your accounting team to integrate, automate and report on data in a streamlined manner. This means minimizing manual data entry and allowing your accounting team to work efficiently to rectify any discrepancies resulting from your M&A.

Employing such a solution is imperative not only to a successful integration but also for your ongoing accounting processes as a multi-entity company. By giving your accounting team the power to manage your multiple companies from a centralized location you enable better reporting and standardization while reducing errors. This is especially important if your growth plan involves regularly acquiring new companies because nothing hinders growth like poor visibility and ineffective processes.

Let’s drill down on this deeper and look at specific M&A software solutions.

Avantiico’s Accounting Automation Solution for Multi-Company Businesses

By now, the need for powerful multi-company accounting software is clear, but that still leaves you with the question – what software solution will best meet your needs?

You need software that allows for expedited multi-company integrations, as well as the rapid creation of new legal entities and the ability to generate reports for multiple companies with ease. These requirements are in essence the reason behind the creation of Avantiico’s Multi-Company Accounting Automation software. Even with the robust out-of-the-box features in Dynamics 365 Finance many of our clients ended up facing similar post M&A integration issues (as detailed earlier). As a result of these market needs the Avantiico add-on solution was built specifically to overcome M&A integration challenges.

team reviewing post M&A analytics

The Multi-Company Accounting Automation solution is built natively for the best ERP software on market and turns it into a multi-entity reporting powerhouse enabling you and your accounting team to easily integrate data from multiple companies and generate accurate reports with real-time visibility. Additionally, the Avantiico M&A accounting software utilizes automation to increase efficacy allowing your company to be rapidly scalable, all of this with built-in compliance to insure you’re always within regulation.

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