Executive Summary
In a multi-entity Private Equity environment, information is often the most expensive commodity. When data is siloed across different geographies, currencies, and legacy systems, the misinformation challenge sets in, leading to reactive decision-making and missed opportunities. This blog explores the concept of the single source of truth, a unified reporting environment powered by NetSuite OneWorld. We examine how real-time consolidations, automated intercompany eliminations, and executive dashboards transform portfolio management from a monthly post-mortem into a proactive value-creation engine.
I. The Misinformation Challenge in Portfolio Management
For a Private Equity Operating Partner, there is no greater frustration than the information lag. You know that one of your portfolio companies is struggling with margin compression, but you can’t see the specific root cause because the data is trapped in a subsidiary’s local accounting software, waiting for a manual end-of-month reconciliation.
This is the misinformation challenge. In this state, the General Partner (GP) is forced to manage by gut feeling or outdated reports. Centralized visibility is the antidote. It is the ability to view the entire portfolio as a single, cohesive operation, while retaining the ability to drill down into the smallest capillary of a single entity’s operations. This blog outlines how to build that single source of truth using the world’s most deployed cloud ERP.
II. The Architecture of Visibility: NetSuite OneWorld
Achieving unified visibility in a roll-up strategy requires a foundational architecture designed for multi-entity complexity. This is where NetSuite OneWorld becomes the cornerstone of the PE tech stack.
1. Automated Consolidations
In a traditional Franken-stack environment, consolidating financial statements for ten subsidiaries is a week-long marathon involving complex Excel macros. NetSuite OneWorld automates this in real-time. Every time a transaction occurs in a subsidiary, it is reflected in the consolidated parent view instantly.
• The Result: The monthly close becomes a non-event. You have a continuous close environment where the books are essentially always ready for inspection.
2. Intercompany Eliminations
One of the biggest hurdles in multi-entity management is the reconciliation of intercompany sales, transfers, and loans. Without automation, these often lead to phantom profits or ghost losses. NetSuite automatically identifies and eliminates intercompany transactions, ensuring that your consolidated EBITDA is accurate and audit-ready at all times.
3. Multi-Currency and Global Tax (Nexuses)
As PE firms look for international bolt-ons to expand their footprint, they encounter the global compliance wall. Each country has its own currency, tax laws (VAT, GST), and reporting requirements. OneWorld manages these local to Functional conversions automatically, allowing the GP to see the portfolio in USD (or their preferred functional currency), while the local entity operates in Euros or Yen.
III. The Executive Dashboard: From Data to Insight
A single source of truth is only useful if it surfaces the right information. For a PE sponsor, the dashboard must bridge the gap between high-level financial health and granular operational KPIs.
The Macro View: The Portfolio Health Dashboard
The top-level view should provide an immediate red/yellow/green status on key financial metrics across all entities:
• Consolidated Cash Position: Real-time visibility into the dry powder available across the entire platform.
• EBITDA Margin by Entity: Identifying which subsidiaries are outperforming and which are dragging down the aggregate multiple.
• Working Capital Velocity: Monitoring DSO (Days Sales Outstanding) and DPO (Days Payable Outstanding) to optimize cash flow.
The Micro Drill-Down: Surgical Intervention
The true power of unified visibility is the drill-down. If an Operating Partner sees that Entity C has a spike in COGS (Cost of Goods Sold), they shouldn’t have to call the local CFO. Within the single source of truth, they can click into the metric, see the specific vendor invoices driving the spike, and identify that a key supplier has raised prices, all within seconds.
IV. The ROI of Transparency
Consolidated visibility is about tangible value creation that impacts the IRR.
1. Speed to Action
In a roll-up, speed is a competitive advantage. If a specific product line is failing across multiple entities, unified visibility allows the GP to spot the trend in week two of the month, rather than week six. This allows for course correction instead of a post-mortem.
2. Investor Confidence and LP Reporting
Limited Partners (LPs) are increasingly demanding higher levels of transparency. Providing them with high-fidelity, real-time reporting, backed by the integrity of a system like NetSuite, builds immense trust. It proves that the GP has total control over the operations and isn’t just financial engineering.
3. De-Risking the Exit
When it comes time to exit, the single source of truth becomes your greatest sales tool. You can hand a prospective buyer a login to a data room that is essentially your live NetSuite environment (with appropriate permissions). This level of transparency reduces deal friction and prevents the buyer from finding skeletons in the closet during their own due diligence.
V. Leading with Clarity
The single source of truth is the ultimate evolution of the Private Equity platform. By moving away from the chaos of disconnected systems and toward a unified environment like Salesforce and NetSuite OneWorld, firms eliminate the misinformation challenge and replace it with a culture of data-driven accountability.
At Trajectory, we build the centralized system through which you view portfolio company performance. We specialize in configuring NetSuite for the specific needs of PE sponsors, ensuring that you have the visibility you need to drive alpha from Day 1 to the Exit.
Is Your Portfolio Operating in the Dark?
Contact Trajectory today to see how we can build a unified single source of truth for portfolio company management.
