Ventrax
A developer, a construction arm and a facilities company under one owner is an ordinary structure in Nigerian property. It is also where accounting quietly becomes difficult.
The structure is not the problem
Keeping separate books for separate legal entities is routine. Every accounting system does it.
The difficulty is that the entities constantly transact with each other, and often nobody writes it down properly.
The transactions that cause trouble
The construction arm builds for the development arm. At what price? If it is cost, the construction company shows no margin and looks unprofitable. If it is market rate, somebody needs to justify the rate.
One company pays another's supplier because that account had funds that morning. This is extremely common and almost never documented as a loan at the time.
Shared staff. The finance manager works across three entities. Whose payroll?
The owner's account. Money moves between the business and the owner, in both directions, sometimes as salary, sometimes as a loan, sometimes as neither.
Each of these is manageable. Undocumented, they compound — and they surface during an audit, a dispute between shareholders, or a due diligence process, which are the three worst moments to discover them.
What good looks like
- Inter-company transactions are recorded on both sides, at the time. One entity's payable is the other's receivable, created together rather than reconciled later.
- A documented transfer pricing basis. It does not need to be sophisticated. It needs to exist and be applied consistently.
- The owner's current account is a real ledger account, not a mental note.
- Consolidation is a report, not a project. If producing a group view takes two weeks of spreadsheet work, you effectively do not have one.
The system requirement
Company separation must be genuine at the data level — one company's users cannot see another's records unless explicitly granted. And consolidation has to be a permission, not a copy: a group finance director sees across entities because their access says so, not because somebody exported three files and combined them.
If your group view is assembled by hand each month, it is a snapshot of what was true a fortnight ago, presented as though it were current.
Worth saying
Structure your entities for commercial and legal reasons, not to make the accounting convenient. Then make the system handle the structure you actually have. Choosing your corporate structure around software limitations is a decision you will regret at a scale software cannot fix.