Introduction: Xero and Multi-Entity Reporting
Xero is a powerful cloud-based accounting platform used by businesses worldwide. It’s widely appreciated for its simplicity, real-time access, and integrations. However, one common challenge arises for businesses that operate across multiple entities: consolidated financial reporting.
By default, Xero is designed to manage the financials of a single entity. It doesn’t natively support group consolidation, meaning you can’t directly generate consolidated Profit & Loss, Balance Sheet, or Cash Flow reports across subsidiaries. But that doesn’t mean it’s impossible—just that you’ll need the right tools and approach.
In this article, we’ll explore:
- Why consolidation is important for multi-entity businesses
- The limitations of doing it manually in Xero
- How you can run consolidated reports using platforms like BrizoSystem that integrate directly with Xero
- A step-by-step look at how it works
Why Consolidation Matters for Multi-Entity Businesses
If your business operates multiple companies—say, across different countries, business units, or product lines—you’ll often need to:
- Report on the entire group’s financial health
- Eliminate intercompany transactions
- Comply with IFRS, GAAP, or other local standards
- Consolidate currencies and account structures
- Produce management reports for group-level decision-making
Without proper consolidation, you risk double counting income and expenses, overstating assets or liabilities, and producing misleading reports for stakeholders.
Manual Consolidation in Xero: Why It’s Not Ideal
Xero doesn’t offer native consolidation features. To manually consolidate financials in Xero, you would typically:
- Export reports (e.g. P&L, Balance Sheet) for each entity to Excel
- Adjust each report to match a common chart of accounts
- Convert foreign currencies using exchange rates
- Identify and eliminate intercompany transactions
- Combine the data into a single worksheet
- Add notes or commentary as needed
While possible, this process is time-consuming, error-prone, and hard to maintain as your group grows. It’s also difficult to keep audit trails, enforce consistency, or run quick comparisons across periods or business units.
The Smarter Way: Using BrizoSystem to Consolidate Xero Companies
BrizoSystem is a financial consolidation platform that connects directly to Xero. It solves the consolidation challenge for multi-entity businesses by:
- Pulling financial data automatically from each Xero organisation
- Allowing you to create and maintain a common chart of accounts (CCOA)
- Supporting multi-currency conversion with flexible exchange rate settings
- Providing tools to perform elimination entries for intercompany transactions
- Enabling custom reports and dashboards across the group
Once integrated, you can generate real-time consolidated reports, share dashboards, and automate recurring reports without relying on Excel.
Step-by-Step: Running Consolidated Reports from Xero Using BrizoSystem
Step 1: Connect Your Xero Entities
In BrizoSystem, you can connect multiple Xero organisations securely via API. This allows you to sync data such as chart of accounts, trial balances, journal entries, and even invoices.
Step 2: Map to a Common Chart of Accounts
Each company may use different account names or structures. BrizoSystem allows you to map each account to a standardised group-wide format—this is the foundation of accurate consolidation.
For example:
- AU Company → “Sales – Domestic”
- SG Company → “Revenue”
Both can be mapped to “Group Sales” in the CCOA.
Step 3: Define Exchange Rates
For foreign subsidiaries, you can input your own exchange rates—either monthly average, closing rate, or a fixed rate. This ensures control over how values are translated in your consolidated report.
Step 4: Create Elimination Entries
BrizoSystem supports two methods:
- Input at group level (debit and credit entries manually at the consolidation level)
- Input by selecting “from” and “to” organisations to automatically reverse intercompany transactions
This helps eliminate intercompany sales, loans, dividends, or service fees that would otherwise inflate the group results.
Step 5: Generate Consolidated Reports
You can now view:
- Group Profit & Loss
- Group Balance Sheet
- Custom Dashboards
- Cash Summary and Forecast
- KPI and Variance Reports
You can drill down into specific accounts or subsidiaries, switch between reporting perspectives (e.g. by legal entity or geography), and schedule reports to be delivered automatically.
Extra Features That Enhance Consolidation
BrizoSystem also offers:
- Commentary on Reports: Add explanations and context directly within reports
- Insight Package: Combine multiple reports and dashboards into one PDF
- Colour Highlights & Search: Make it easier to navigate large reports
- Templates & Branding: Use custom background and colour palettes for each entity
These features go beyond what traditional spreadsheets or accounting systems can offer.
Example Scenario
Let’s say you have three companies using Xero:
- Brizo SG (Singapore) – SGD
- Brizo AU (Australia) – AUD
- Brizo UK (United Kingdom) – GBP
You want a consolidated P&L in SGD. You want to eliminate management fees between SG and UK. In BrizoSystem:
- You connect all three entities
- Map accounts to a group chart
- Set SGD as the reporting currency
- Create an elimination entry for the SG-UK fee
- Click “Consolidated P&L” → Done
You now have a consolidated report with proper currency conversion, eliminations, and a single version of the truth—without touching Excel.
Conclusion: Xero Alone Isn’t Enough for Consolidation
While Xero is excellent for managing the books of individual entities, consolidated financial reporting requires more. Tools like BrizoSystem bridge the gap, making it possible to:
- Save time and reduce errors
- Gain clarity across multiple entities
- Automate intercompany eliminations
- Produce audit-ready reports with full traceability
If you’re a growing business with multiple Xero accounts and want to take control of your group reporting, it’s time to move beyond spreadsheets and start consolidating with confidence.
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