Goodbye Manual, Multi-Entity Month End 👋: Xero & Accounting Automation

For the majority of businesses, the monthly close process is a notorious bottleneck that bogs down finance teams and saps productivity. But for multi-entity businesses, this multiplies tenfold.

From reconciling intercompany balance sheets to managing recharges between companies to matching cross-entity bank transactions, the tasks can seem endless. Add the burden of switching between multiple Xero files, and it's a wonder how any finance team in a multi-entity business manages to close month-end at all.

Unpacking the process

With a long list of jobs that are typically manual, time-consuming, and prone to mistakes, multi-entity month-end processes can feel like navigating a maze.

Caroline Viles, Finance Director at Gaia, described how she used to tackle multi-entity month-end: “downloading the data, analysing it, and then re-uploading it to Xero was a big pain point before Mayday”.

Here's a glimpse of what that often looks like:

• ⚖️ Intercompany balances: Trying to figure out why intercompany balances aren’t adding up? We've all been there—1,000 transactions in one intercompany code and 999 in the other. This means downloading transaction reports from various Xero files and meticulously digging through each transaction. You spend the better part of a day manually matching them, hoping for that eureka moment when you find the culprit. This painstaking process is crucial for identifying and rectifying any errors in the Xero postings.
• 💰 Cross-entity bank reconciliations: Handling bank reconciliations across multiple Xero entities can be a headache. You can only work with one organisation at a time, so when one entity pays a bill or receives income on behalf of another, it gets messy. Switching between Xero files to mark bills or invoices as paid to the intercompany (or create them) and then switching back to reconcile bank transactions to the intercompany code; this error-prone process can lead to one-sided postings or a bill might be paid twice!

• 🔄 Intercompany recharges: Handling intercompany recharges of costs and revenues can feel like drowning in spreadsheets, taking hours, and sometimes days. You have to manually calculate your recharges and then post each one into Xero. Tedious and time-consuming, to say the least.

Graham Shapiro, Founder at Myccountant, described the challenges he faced when it came to managing intercompany recharges for a client group before automation came to the rescue.

“They had about 200 lines of intercompany charges. In the setup when I was gathering the information from them, it took them a week to come back with the invoices to be recharged. It really slowed down their month-end reporting and the opportunity to close. Looking at what they did at month end, very often they were taking an invoice from one entity and sending it to the other entity. There was complete inconsistency in the capturing of information. Where they might see one item as a certain expense, the other Accountant dealing with the other entity saw it as a different type of expense. You got no uniformity across the way that they look at it as an expense.”

James Scott-Griffin, Co-Founder and CPTO at Mayday, said, “we work with people who have spent days reconciling their intercompany loan accounts manually, pulling transactions into Excel, going through it line by line. As a software engineer, it just seems mad to me that we would take all of that time to do something that a computer can do for us really simply.”

Each mention of "I have a spreadsheet for" should trigger a question: is there an app that can do this better? And in most cases for Xero users, the answer is yes!

The better way to manage month-end processes

Tired of wrestling with multi-entity month-end chaos? Let's explore how Mayday's automation tackles your biggest pain points head-on:

⚖️ Intercompany balances:

By integrating a tool like Mayday’s Balancer with Xero, you now have a safety net for keeping intercompany balances in check.

• It pulls in all the postings from both sides’ of Xero files and intelligently matches them side-by-side, so you can easily spot any discrepancies.
• Need to sort out balances from a while back? No problem, Balancer lets you pull up older balances and tidy things up in previous months hassle-free.
• Handling multi-currency intercompany balances or charging interest on intercompany loans? One-click post any FX or interest adjustments directly to Xero.

🔄 Automate cost and revenue recharges:

You can now automate intercompany and interdepartmental recharges. With Mayday’s Recharger product, you can easily establish rules, similar to Xero's bank rules, to govern how costs and revenues are recharged across entities.

• Seamlessly pulls transactions from your various Xero organisations and applies your preset rules.
• All that's left for you to do is review the recharges and with just one click, post them into both Xero files simultaneously.

💰 Cross-entity bank recs:

No more jumping between Xero files!

• With Mayday’s BRAG browser extension, you can now match bank feed items in one Xero entity directly to invoices and bills posted in other entities—all from within the Xero bank reconciliation interface.
• You’ve now got the ‘match’ and ‘create’ functions from the standard Xero bank rec, but on a multi-entity basis.

And the good news is implementing automation does not require a clean slate – historical data can be imported and reconciled to establish an accurate starting point for the automated system.

“We saw how a day of work was solved with Mayday’s automation within just a few minutes” – Graham Shapiro, Founder at Myccountant

James Scott-Griffin, Co-Founder and CPTO at Mayday, explains:

“You get to choose when you want to pull in data from. This could be your whole last year, it could be even further back than that. We can then run forwards and run your recharges and do your intercompany loan balances from that point in time. We've had a number of customers sign up and get great benefits from being able to do a year's worth of intercompany loan reconciliation on the Balancer dashboard in essentially one big hit.”

This means you don't need to start from scratch—just build on existing data to get started, establishing a solid foundation for automated processes. From that baseline, businesses can realise the benefits of automation going forward while maintaining consistency with past periods.

The outcome? Finance teams optimise time and resources while continuing to enjoy Xero's familiar interface. No more getting bogged down in tedious manual tasks—just efficient processes and a team empowered to focus on what truly matters.

Ready to mend month end?

By leveraging automation tools like Mayday, multi-entity groups can revolutionise their month-end processes. It's not just about saving time—it's about the essential components of accuracy, efficiency, and elevating overall business performance. Without the burden of multi-entity month end, you can now zero in on strategic initiatives that fuel growth.

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