Chart of accounts (consolidation)

It is important to consider how you want to set up Chart of Accounts in the parent company and in the subsidiary companies.

The parent company and each subsidiary company have their own Chart of Accounts. To transfer the values from the subsidiary to the parent company, you must link the nominal accounts in the subsidiary company to the related nominal accounts in the parent company.

To help identify the relationship of accounts between the subsidiary companies and the parent company, the structures of the Chart of Accounts should compliment each other. You should consider:

• Using the same account number for the same purpose in each company.
• Using a designated cost centre for nominal accounts in the parent company which represents each subsidiary company.
• Using departments to retain the cost centres from each subsidiary company.

The following example uses the cost centres LON and NEW to identify the subsidiary companies London and Newcastle in the parent company.

	Subsidiary nominal accounts			become	Parent nominal accounts
London	Code	Cost	Dept		Code	Cost	Dept
Rent	16100	AAA	ADM		16100	LON	AAA
Electricity	16100	BBB	ADM		16100	LON	BBB
Motor expenses	18100	BBB	SAL		18100	LON	BBB
Newcastle
Rent	16100	AAA	ADM		16100	NEW	AAA
Electricity	16100	BBB	ADM		16100	NEW	BBB
Motor expenses	18100	BBB	SAL		18100	NEW	BBB
Note: The cost centre in the subsidiary nominal account is used as the department code in the parent company's nominal account. If your nominal account structure is the same in all subsidiary companies, you can save time by creating a Chart of Accounts in one company and then copying all the data files into the relevant sub-folder for the other companies.