Companies in Dynamics GP
A critical decision that is very difficult to change after implementation is whether or not to have multiple companies in Dynamics GP. Sometimes there is no question, as there is only one company or there are clearly separate entities. However, often there are multiple legal entities, branches, or subsidiaries that may not only require separate accounting records and procedures but also share customers or inventory items.
There is no limit on the number of companies you can setup in Dynamics GP. Each company created becomes a separate SQL Server database and behaves autonomously, except for a few shared characteristics global to the entire Dynamics GP installation, such as system users, currency setup, and exchange rate tables.
There are situations when separate companies are clearly recommended in Dynamics GP:
- If accounting records must be kept in different functional currencies to conform to local requirements
- When using Dynamics GP Payroll and there are different Federal ID Numbers
- If there are entities that have different fiscal periods
- Some types of business entities require separate accounting books to be kept to comply with various federal and state regulations
If the requirement is simply to keep separate General Ledger accounts for each separate entity, this is fairly easy to accomplish within one Dynamics GP company/database. In some situations, there is no right or wrong answer as to whether to have one or multiple Dynamics GP companies; the following sections will discuss the benefits of the two approaches in more detail.
Benefits of having one company in Dynamics GP
The benefits of having one company in Dynamics GP are as follows:
- Initial company setup is faster: Even if there are different General Ledger accounts for multiple entities within one company, significant time can be saved by only having one Dynamics GP company to set up.
- Ongoing maintenance and support are simpler: Multiple companies add on-going incremental time, and thus cost, to maintenance and support. Even though many maintenance tasks can be automated, monitoring and support is simpler for a single company database. Any changes, service packs, or additional products installed may need to be performed separately for each company. Upgrades will typically take less time for one large company database than multiple smaller ones.
- Less storage space is needed: Having multiple databases in SQL Server increases the storage space needed because each separate database will have some duplicated overhead. Also, keep in mind that each additional company will require added capacity for backups. This benefit may not be so important anymore, with storage being much more affordable than it has been in the past, but it is still something to consider.
- Yearly processing is faster: Yearly closing for various modules only has to be done once if there is one Dynamics GP company. Other yearly company-specific tasks, such as creating new fiscal years and yearly budgets, will take less time with one company.
- Reporting is simpler: Typically, creating reports for one company takes significantly less time. There are no built-in multiple-company reports in Dynamics GP for the core modules discussed in this book.
- Ability to share vendors, customers, and inventory items: Dynamics GP does offer an Intercompany module, but it is fairly limited. For example, there is no way in Dynamics GP to sell an inventory item from one company to a customer in another company. There are third-party add-on products that can help mitigate this somewhat, however it is still much more straightforward to have everything in one company if resources need to be shared often.
- Imports and integrations with other systems may be simpler: As a general rule, imports and integrations with other systems are easier to set up and maintain with only one Dynamics GP company.
- Availability of additional products or modules is not limited: There may be some modules or products that will not support multiple Dynamics GP companies easily. Having one company will obviate any concerns about this.
- Additional licensing costs: Dynamics GP licensing is for concurrent users, so one user logged into three different companies at the same time will use three concurrent licenses out of the total available. If users will routinely need to be in multiple companies, this may result in significant additional licensing costs.
Benefits of having multiple companies in Dynamics GP
The following is a list of the benefits of multiple companies in Dynamics GP:
- Very clear delineation between companies: All the records for each entity are clearly separated. Having multiple companies makes it more difficult to enter something in the wrong company.
- Ability to separate vendors, customers, and inventory items: This is the flip side to not being able to share vendors, customers, and inventory items and may be a benefit rather than a hindrance, depending on your requirements. For example, if your customers consider your divisions or subsidiaries to be separate companies, they would expect to receive separate statements from each company and pay each separately. Having all the transactions in one Dynamics GP company could make it very difficult to accomplish that separation without a lot of customization.
- Security: Additional security options are a direct result of the ability to separate vendors, customers, and inventory items. Consider a situation where you acquire a subsidiary and do not want all of your newly acquired employees to see any of the General Ledger details, customer information, or inventory details from your main company. With only one Dynamics GP company, it is impossible to achieve this without significant customizations, but a separate Dynamics GP company automatically accomplishes this.
- Ability to perform yearly closing at different times: This could be a benefit if the accounting and yearly closing procedures and timing vary for the different entities.
- Different setup options possible for each company: An example of this may be different receivables aging buckets needed or aging performed a different way for different business entities. The only way to accomplish this within one Dynamics GP company is with custom reporting. However different companies make this a non-issue.
Whether to set up one or multiple companies is a topic that should be carefully considered when planning your Dynamics GP implementation. If you are not sure of the proper approach for your specific situation, carefully go through your business requirements, as well as legal and other governmental regulations, and speak to your Dynamics GP resource in detail to help determine the best course of action.
Once the decision is made, you will need to have a company name and a database name for each company you are planning to set up:
- Company name: Maximum of 65 characters. This is what users will see when they log into Dynamics GP and are presented with a list of companies. It will also be what is defaulted at the top of most reports to identify the company, and what shows on every window when using Dynamics GP. Even though 65 characters are possible, it is recommended to keep this shorter, as only 35 characters will typically fit on the login screen. If you are planning to create multiple Dynamics GP companies, make the names different enough so that there is no confusion for users (for example, Not Just Widgets, Incorporated).
- Database name: Maximum of five characters. This will be the SQL Server database name. It should be alphanumeric and cannot start with a number or have special characters. While most end users may never see the database name, more technical users and system administrators may use it quite often, and it may be seen on reports and used for some setup steps (for example, NJW).