How to Combine Financial Statements for Multiple Companies

Today most of companies are doing more than one business with different names and brand. So, every business of company will have own identity. For recording its all transactions, separate accountants are appointed. When all accounting records are completed, it is necessary to analysis combine financial statements of multiple companies. It will help to analyze overall financial position and financial performance.

Now, question is "How to combine financial statements for multiple companies?" There are two ways. One is manually and second is the use of accounting software. We have explained manually process already in our past written lecture.

In this lecture, we will explain, how can you combine financial statements with the help of Indian popular accounting software Tally.ERP 9.

1st Step : Create Different Companies in Tally.ERP 9

First of all, you have to create different companies in Tally.ERP 9. For example, your one business may be book selling and other business may be online publishing. So, you have to create two companies whose business nature is totally different. You can write these companies A Company and B Company.

2nd Step : Create Group Company of All Multiple Created Companies

For combining financial statements for multiple companies, you have to create one more company. In the gateway of tally, right side, you see button comp. info., click it and you see create group company button. It will come if you have created individual companies first. Now, create it, you can write its name AB company which is group company of your already created companies A and B. In the creation process, you have to add A company and B company as its member companies. When you will make A company and B company its member companies, all recorded data of A company and B company will automatically transferred to AB company.

3rd Step : Pass the Voucher Entries of All Transactions in Multiple Companies

Now, pass the voucher entries of all transactions in multiple companies by just opening accounting vouchers in Tally.ERP 9's Gateway.

4th Step : Switch Individual Company to Group of Companies 

When you have completed passing of all the transactions in individual company in Tally.ERP 9, you just again click Comp. Info and switch individual company to Group companies by selecting and pressing group company after select company option.

5th Step : Check Profit and Loss Account and Balance Sheet of Group of Companies 

Tally.ERP 9 will have to combine Financial statement for multiple companies automatically in Group company if you have followed above four steps. Now, open profit and loss account, it will be the combination of your individual companies. With this, you can see combined performance of company. Like this, you can see also combined financial position by just go to balance sheet of group company.

If you want to verify whether in group company, financial statements are combined automatically or not. You can use steps in our screenshot in which we track all the individual closing stock is combined in group company.

Reference for Further Reading

Download Tally.ERP 9 eBook






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Accounting Education: How to Combine Financial Statements for Multiple Companies
How to Combine Financial Statements for Multiple Companies
Accounting Education
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