How to set up your international company structure

VOGSY is designed to mirror your real-world company structure, providing powerful benefits for multinational organizations. This article explains the purpose of the structure and how to configure it correctly.

By structuring your companies in VOGSY, you can:

• Consolidate reporting at the headquarters level in a single base currency.

• Track the performance of each subsidiary in its own local currency.

• Allow subsidiaries to operate independently, managing their own finances and local currency.

• Plan resources from a unified, global pool that serves all companies.

• Manage intercompany transactions by automatically tracking work performed between different subsidiaries.

VOGSY uses a three-layered organizational structure. You will set this up to organize your activities, tasks, and employees into manageable segments.

Layer 1: Holding Company: This is your main headquarters, which contains all other companies. It uses your primary base currency.
Layer 2: Subsidiary Company: These are your individual legal entities, often in different countries. Each can have its own local currency and a separate integration with its own financial software.
Layer 3: Department: These are teams or resource pools within a company.

In VOGSY, "Activities" are the categories of work that your employees will log time against.

1. Configure Activities: In the "Activities" master table, you will define the activities used to calculate deliverable, 
   plan resources, track time, and create invoices.

2. Set Currency Rates: For each activity, you can set a specific cost and sales rate for every currency you use (both your base currency and all local currencies).

The final step is to place your employees within the structure and define their specific rates. You can do this in the Employees function in VOGSY's back office.

• Assign Location: Assign each employee to their correct "home" company or department. The company they belong to determines their local currency.

• Set Employee Rates: For each employee, you will set their specific cost rate, sales rate, and intercompany rate in their local currency.

• Intercompany Rate Explained: This special rate is applied automatically whenever an employee from one subsidiary tracks time on a project belonging to a different subsidiary.

Here is an example of a typical company hierarchy and structure:

Global Holdings Inc. (Base Currency: USD, Consolidated Financials)

• USA Operations LLC (Local Currency: USD)
  - Sales & Marketing Department
  - Consulting Services Department

• Europe Operations B.V. (Local Currency: EUR)
  - Development Department
  - Customer Support Department