The Antidote to Arbolus's Growing Pains
May 4, 2023
Arbolus is changing the knowledge game - digitally connecting businesses to top industry experts so they can access the know-how they need, when they need it.
The finance team at Arbolus have used Xero as their accounting system since the business was founded in 2018. But times have changed. Arbolus now has multiple entities, and multi-entity finance is no walk in the park - particularly when it comes to month end.
Since it was founded in 2018 Arbolus has grown to over 150 employees, and has expanded internationally. Alongside the parent UK entity, they have offices in Spain, North America and India to cover software and product development, delivery support, and sales.
As the subsidiary entities are there to support the parent entity, they don’t generate their own revenue. They charge the UK entity for all costs they incur, with an appropriate mark up.
The finance team at Arbolus have always run their intercompany charges monthly. They need an overview of costs across the subsidiary entities. Running their recharges less frequently would create duplicate work in generating their monthly consolidation, which they do with Joiin.
The problem was, calculating the subsidiaries’ recharges would take Alexandra up to half a day every single month.
Intercompany charges: a tricky toil of tremendous tedium
Before Mayday Recharger, Alexandra had to:
- Identify the subsidiary’s operating expenses to be recharged from Account Transactions reports in Xero
- She’d calculate the mark-up to be applied to these expenses,
- She would then raise an invoice in the subsidiary entity
- Alexandra would then need to copy the operating expenses line by line into the bill that was posted, as Arbolus need the postings in the parents entity to mirror the account code structure in the subsidiary entity.
If any of the operating expenses were missed, or copied incorrectly, there was a risk of asymmetry on the P&L accounts, meaning this task was tricky as well as tedious.
After completing this time-consuming chore, Alexandra then had to repeat the process twice more: once for each of the remaining subsidiary entities.
All of this took up valuable time, detracting from the finance team’s capacity to offer valuable insights and information to management.
June 2022: Harriet Hope gets hired!
Arbolus brought Harriet on as Financial Controller and charged her with the month end close, giving her a 10 day target to do so (which, as Harriet tells us, often went unmet). They also assigned her some key objectives, one of which was to identify and put in place a best in class tech stack for the finance function.
Harriet had considered whether it was time for Arbolus to move on from Xero to an ERP implementation. You can imagine her delight when, at a learning and development session, she came across Mayday Recharger - the solution that caters directly to Arbolus’s needs as a multi-entity Xero user.
It was immediately clear this could be a gamechanger for Arbolus. She booked a demo straight away.
Light at the end of the tunnel
Harriet and Alexandra met with Mayday’s CEO, David Tuck, for their bespoke onboarding service, where they learned how to tailor their recharge rules to make sure that no expense went uncharged.
Harriet and Alexandra signed up for the free trial with Mayday Recharger, but they didn’t need 30 days to see that this was going to be a valuable addition to their toolkit. They quickly signed up for a paid subscription, and have been loving month end ever since.
Every month, the finance team at Arbolus now has an extra half-a-day at their disposal. There are many valuable ways you could spend half a day, but what could be more valuable than providing your company with accurate and timely business insights? With Mayday Recharger’s help, the Arbolus team are able to make management decisions better and earlier.
Previously, if Arbolus’s transactions were updated in Xero and recharges had to be amended, the team would leave reconciliation until the following month because it was so agonising to correct. Mayday Recharger integrates deeply with Xero, making it very easy to recalculate charges if new data is added to the account transactions, so that Arbolus no longer have to start the month with incorrect information.
Arbolus has now closed month end several times with the help of Mayday Recharger. What used to be a half-day job in their month end process - a source of monthly dread for the finance team - has now become a tick box task that takes a couple of minutes. Thanks to the accurate and timely MI that is now coming through, Mayday Recharger has truly been a win-win for Arbolus.