How a group chart of accounts is designed across three entities
Group consolidation starts with a single chart of accounts that each entity maps onto without breaking what that entity still has to file locally, followed by intercompany matching run before the close rather than after it. This is an illustrative example of how Salt approaches multi-entity close, using a Singapore holding company with three regional subsidiaries as the profile.
Scenario — an illustrative example of how Salt approaches this problem. Not a description of a specific client engagement.
The business shape it describes: Singapore holding company, 3 regional subsidiaries.
- Scenario covers
- Group consolidation, monthly close and outsourced controller support across three entities, with tax filing data prepared
- Jurisdiction
- Singapore
- Sector
- Professional services
- Take a Singapore holding company with three regional subsidiaries, each keeping its own books with its own chart of accounts and its own local bookkeeper.
- Consolidation is a manual spreadsheet exercise performed quarterly. Intercompany balances have never agreed, and nobody owns the difference.
- Three incompatible charts of accounts, so no line item can be compared across entities and the consolidation is really a re-keying exercise.
- Intercompany transactions recorded on one side only in several periods, which is why the balances never agree and why the difference moves every quarter.
- ECI met by estimate rather than from a close, because the actual figures are not ready within three months of financial year end.
- No fixed close calendar and no named owner per entity, so the group close starts whenever the slowest local bookkeeper finishes.
- Design one group chart of accounts and map each entity onto it, keeping each entity's local statutory account structure intact underneath the mapping rather than overriding it.
- Introduce an intercompany matching routine that runs before the close, so differences are cleared as part of the process rather than reconciled afterwards.
- Fix a close calendar with a named owner and a dated deliverable per entity, and hold the calendar rather than the aspiration.
- Move the group to a monthly close, so the consolidation is a repeated routine rather than a quarterly reconstruction.
- Prepare ECI and the corporate tax return data from actual figures. Filing stays with the company or its appointed tax agent.
- Mapping three subsidiaries onto one group chart of accounts without breaking what each still has to file locally is a design decision, not a bookkeeping one, and it is the constraint that makes consolidations hard.
- Moving intercompany matching to before the close is a change three separate local bookkeepers have to work to. That needs the calendar and the ownership defined as carefully as the mapping.
- The group would be able to produce a consolidation as a repeated monthly routine rather than a quarterly spreadsheet rebuild.
- Intercompany balances would agree at the close because they were matched before it, rather than being reconciled after the numbers are already out.
- ECI would be prepared from actual figures within the three-month window rather than from an estimate that has to be corrected later.
What we'd flag
The single group chart of accounts has to accommodate three sets of local statutory requirements at once, and every local bookkeeper has to be brought onto the new calendar before a monthly close will hold. The mapping is the easy half; the behaviour change is not.
How a group chart of accounts is designed across three entities
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