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With SAP Business One 9.1, SAP introduced Multiple Branches functionality https://www.youtube.com/watch?v=MmM6ey2ShB4 which is great feature. Here i will try to explain which one to choose from Multiple Branches feature or separate companies in SAP.

If your company have multiple business units which are legally registered as separate companies and these legal entities should have separate financial reports then you can use different databases for each company i.e separate company for each branch/business unit. To get consolidated reports you can use the intercompany integration solution add-on by SAP. See also latest news on this, such as Intercompany Integration Solution vs. Multiple Branches: How to Decide or SAP’s add-on for Intercompany becomes compatible with Multiple Branches function

You can also develop consolidated Crystal reports also, see How to Work with SAP Crystal Reports in SAP Business One or you can extract reports from individual companies and consolidate them in MS Excel.

But in some countries branches or different business units are not required to be registered as separate entities or in some large organisation with multiple business units management wants separate financials for each unit, in such cases you can use Multiple Branches Feature in SAP B1.

Here i will discuss about Branches as Separate Companies (Separate Databases) and second option if some company wants to migrate its one company from one database to  as a Branch in other database of SAP Business One or want to use branches feature

1-  If separate entity/business unit is required by law to be separate company or management wants separate entities  then you can configure separate database for such companies

Benefits

  • One Company’s user cant login to other hence data protection will be valid
  • Proper Sales and purchase transactions from one company to other company
  • Separate and summarized chart of account for each branch/business unit
  • In case of different databases separate master data and chart of accounts for each branch

Challenges

  • For consolidated financials particularly for balance sheet and profit and loss, you need to use intercompany add-on to consolidate https://help.sap.com/http.svc/rc/273d119036004855b30640ca2df1e252/2.0/en-US/Intercompany_and_Multiplebranch_Customer.pdf or customize reports or extract data in excel and combine
  • User have to sign out from one database and login to other database for transactions which will consume his time
  • Company can not transfer stock it will be sale and purchase between different databases with less information of tracking (if they use Goods Issue and Goods Receipt Option)
  • Management of different databases will be tough for example if there is a minor change in company’s  print format system administrator have to do the same change in all companies which requires a lot of labor work
  • If test companies required by users System admin have to restore Separate test company for each data base which will require labor work and additional storage on server also
  • Different master data for same items and business partners in different databases

2 – They can close separate companies , initialize branches feature in main company and post opening balances of G/L and migrate open documents for reporting and controlling purpose from individual companies to branches in main company.

Benefits

  • Consolidated system reports for financials and inventory also
  • No Additional database will be requires
  • Centralize Master Data and Chart Of Accounts for all branches
  • If there is any change for example in print format no need to change in multiple databases
  • Optimized user performance as they will not be required to logout form one database and login to other
  • Direct copy sales documents to purchase documents for inter branch transactions which will make easy Inter branches sales or purchase transactions.
  • No additional labor work requires for existing master data whenever there is new branch as system can assign new branch to existing master data automatically.
  • New branch configuration process will be easy in future no need for external SAP B1 Consultant to Configure a separate company for branch

Challenges

  • Database size can be increased after some years which could leads to slow performance in case on SAP B1 on SQL Server
  • At first time lot of Labor work required to configure as it involves transaction’s data migration from multiple databases to one database
  • Chart of Account Will be lengthy if company has policy for one GL for one branch as all GLs will be repeated one by one for each branch
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