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Summary
Special purpose vehicles let businesses ring-fence risk, tax and performance for individual projects – but many accounting systems force finance teams to run a separate installation for each SPV. The result is duplicated licences, disconnected data and hours lost to manual consolidation in spreadsheets. Cloud accounting software built for multi-entity structures solves this by consolidating SPVs automatically, in real time.
The short version
- Special purpose vehicles (SPVs) let organisations ring-fence risk, tax treatment and performance for individual projects or investments.
- Many accounting systems force finance teams to run a separate software instance, with its own licence, for each SPV.
- That approach leaves data disconnected across systems, so producing one group report means manually reconciling every SPV's figures in spreadsheets.
- Cloud accounting software built for multi-entity structures consolidates every SPV automatically, strips out intercompany transactions and converts currencies without manual work.
- iplicit lets organisations add a new SPV as its own legal entity without buying another software licence.
Setting up a special purpose vehicle (SPV) to ring-fence a project, a property or an investment makes sound business sense.
It isolates risk, clarifies tax treatment and lets leaders see exactly how each venture performs on its own. The problem is that many accounting systems were never built to support this way of working. Finance teams end up running a separate instance of the same entry-level software for each SPV. Not only does that mean paying for each licence but it leaves the finance team consolidating manually and untangling intercompany transactions line by line.
The right accounting software removes that burden, giving finance teams one connected view of every SPV without the manual work. This article explains why organisations use SPVs, where traditional accounting software falls short, and what to look for in a system built to handle them.
Why are SPVs set up and who uses them?
Special purpose vehicles (SPVs) are set up to separate one business activity, project or investment from the rest of an organisation. Organisations use them for tax efficiency, to limit risk or simply to track the performance of individual ventures clearly. They are common in portfolio and asset management, private equity and investment, property, renewable energy and infrastructure as well as media production. A holding company can run several SPVs with a small team, while each vehicle generates turnover that leadership needs to track separately.
SPVs might be set up by a holding company which has low turnover and few staff of its own but which needs to compare data for millions of pounds generated by its ventures.
The drawbacks of SPVs for finance teams
Finance teams managing multiple SPVs often use multiple instances of the same basic accounting package. Each SPV is treated as a new small business with its own paid licence. None of those installations talk to each other, so one report involves pulling data from every system and reconciling it in spreadsheets. Intercompany transactions make this worse: a single 10-line invoice can take an hour to allocate correctly.
What to look for in software for SPV accounting
The right software for SPV accounting consolidates every entity in one system, rather than forcing finance teams to run a separate installation per vehicle. Look for cloud accounting software built for medium-sized organisations rather than entry-level small business tools or heavyweight ERP systems designed for large corporates. It should let you set up a new SPV as its own legal entity in moments, consolidate accounts automatically, strip out intercompany transactions and convert multiple currencies without manual work.
Specifically, look for:
- Multi-entity consolidation: the system combines every SPV into one group view automatically, without the need to export data to spreadsheets.
- Fast entity set-up: adding a new SPV as its own legal entity takes minutes, without a new software purchase.
- Intercompany elimination: transactions between SPVs are stripped out of group figures automatically.
- Multi-currency handling: figures convert into your preferred currency without manual calculation.
- Real-time management reporting: decision-makers get accurate, up-to-date reports without waiting for manual data pulls.
Where iplicit fits
Good software for SPVs treats every entity as part of one connected system, not a collection of separate installations. iplicit is cloud accounting software built to do exactly that. It lets organisations add a new SPV as its own legal entity without buying another licence, consolidates accounts automatically across every vehicle, and removes intercompany transactions from group figures. For organisations managing multiple currencies across entities, iplicit converts figures automatically, giving finance teams one accurate, real-time view of the group.
iplicit's multi-entity accounting software is built to cater for organisations running more than one legal entity. Barwood Capital, a UK property investment and fund management business, uses iplicit to manage more than 30 active legal entities, alongside around 50 dormant ones. “Intercompany transactions are now automatically mirrored between entities,” says Jill Smith, Senior Finance Manager. “Consolidated fund reporting can be produced instantaneously.”
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The bottom line
SPVs are created by sophisticated organisations whose leaders need to segment data for different ventures. But if the figures aren't standardised and current across every SPV, leaders can't make confident decisions. The right accounting software removes the manual work that gets in the way of that.
Get a closer look at iplicit
To find out how iplicit can help multi-entity organisations manage their SPVs, take a 3-minute quick tour, or book a demo to see it applied to your own structure.
What is a special purpose vehicle (SPV)?
A special purpose vehicle (SPV) is a separate legal entity set up to ring-fence a specific project, property or investment from the rest of an organisation. It isolates financial and legal risk and makes it easier to track that venture's performance on its own.
Why does traditional accounting software struggle with SPVs?
Many accounting systems require each SPV to be set up as a separate software installation with its own licence and none of those systems talk to each other. That forces finance teams to manually pull and reconcile data from every SPV in spreadsheets, which is slow and error-prone.
How does consolidation work across multiple SPVs?
Consolidation combines the financial data of every SPV into one group view while automatically stripping out intercompany transactions between them. Cloud accounting software built for multi-entity structures does this in real time, rather than through a slow, manual, spreadsheet-based process.
Which industries use SPVs most?
SPVs are widely used in property, private equity andinvestment, renewable energy and infrastructure, media production, and assetmanagement. Any sector where one venture's performance, tax position or riskneeds to be tracked separately from the rest of the business tends to use them.
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