I own several companies. Why can’t I tell which one makes money?

Because each company keeps its books its own way, and nobody joins them up. One company pays the shared staff, another carries the ads, a third books sales that belong to a fourth. Money moves between them and only one side records it. You get a P&L per company, each built differently, and nobody can say which one makes money.

That has a cost. One company quietly funds another. Cash sits where it isn’t needed. Each company chases its own targets and pulls in its own direction. I’ve seen businesses run teams in several countries with no consistent tracking of payroll.

How do you get to one view without re-doing the books or changing systems?

We leave the systems alone. Each company keeps its books where they are. Three rules change:

  1. One list of account names for the whole group, with each company’s accounts mapped to it, so a line means the same thing everywhere.
  2. Every movement between companies recorded on both sides.
  3. Shared costs split by a rule agreed once.

Then each company gets a sheet that pulls live from its books, and one more sheet adds them up and takes out what the companies sell and lend to each other. No retyping. Start simple, then build on it.

I’ve built this for a restaurant group with seven companies, for a group spread across five jurisdictions, and for a fund and the direct-to-consumer brands it owns, as CFO for the fund and each brand.

What does one set of numbers let a group do that it couldn’t before?

  1. You see which company makes money, which one funds the others, and where the cash is. Every month, on one page.
  2. Every company pulls in the same direction, because targets and incentives tie to one group goal. Products that lose money stop hiding. So do costs carried by the wrong company.
  3. You can build a cushion, then move. With cash in reserve, you can hire the key person, enter a new market, or buy a competitor’s assets when their cash runs out.

I worked with a GCC manufacturing group with tight margins, negative cash flow and no clarity. We got the numbers clear first. That showed where resources were being wasted and let us fix the product mix. Then we built the cushion. When the recession came, the competitors weren’t ready, and we took over their assets for less than it would have cost to build them.