Standardized and accurate bookkeeping can be the difference between success or failure when it comes to your business. This is especially true when it comes to franchises due to the unique nature of the business. The accurate recording of financial transactions, including purchases, sales receipts, and payments, among other financial data, is integral to the success of the franchise. Below you will find some helpful tips for how to improve franchise efficiency with standardized bookkeeping and online bookkeeping services.
The Unique Nature of The Franchisor and Franchisee Relationship
Because a franchise is a joint business venture between a franchisor and a franchisee, there are unique aspects to the financial relationship. The franchisor sells the rights to the business to the franchisor, but the financial relationship doesn’t end there. There is a constant back and forth when it comes to finances in a franchisor and franchisee relationship. On top of that, the franchisor likely has dozens or even hundreds of franchisees. Having a standardized bookkeeping system can help both parties.
Franchisees are obligated to comply with the regulations determined by the franchisor, including accounting and bookkeeping. The financial relationship begins once the contract is signed, and it is a recurring component of the business relationship. For example, the initial franchise costs need to be paid, in addition to continual royalty fees. The royalty fees are based on revenue so they can be different for each franchise. Without a standardized system, the financial data from each separate franchise could negatively impact the franchisor.
Improve Franchise Efficiency Through Standardized Bookkeeping
One of the best ways to take the headache out of franchise finances is by outsourcing the bookkeeping. An outside source can take care of crunching the numbers and assessing your financial information so you can focus on your business. There are major benefits to outsourcing bookkeeping and standardizing it across all franchises.
Time is the most precious resource in any business. Streamlining processes, training personnel, recruiting talented management, and conducting process and outcome evaluations can take the franchise to the next level. With the various tasks necessary to increase profit margins, outsourcing bookkeeping can create more time to focus on those other aspects of the operation. It can allow franchisees to focus on business growth to not only benefit their franchise, but also the franchisor.
When opening a franchise, the focus has to be on efficiency in order to grow and scale the operation. To be able to create a well-oiled machine that operates efficiently without the need for constant and involved oversight is the goal. Standardized bookkeeping can allow franchise owners to focus on scalability as they can model one franchise after another. While each franchise location is different, streamlining the process is the key to long-term success and growth.
Outsourcing bookkeeping and standardizing the process among all franchises is beneficial as there is a distinct difference between bookkeeping and running a business. Having access to financial expertise is vital as it can improve franchise efficiency and provide you with invaluable information on how your franchise numbers are working for or against you. Having a financial expert assist with financial strategies and optimization is a major benefit.
Effective Debt Management:
Funding a franchise is a large investment, especially in the beginning. Franchise fees, initial costs, advertising, marketing, and payroll can add up fast. Oftentimes franchisees apply for a business loan to cover many of the startup costs. When it comes to standardized bookkeeping, financial professionals can help guide franchisees in managing their debt. They can help assess debt and provide information to lower interest rates on any business loans and credit cards.
Without the help of a bookkeeping professional, you may lose track of your financial data or put off the task entirely. Getting behind on your bookkeeping can be the difference between profitability and going under. Bookkeeping professionals can provide weekly and monthly financial reports so you can adjust your franchise practices accordingly. This is integral to optimizing your business practices to achieve your goals.
One of the most stressful times for any business is tax season. It’s an added task that takes time, in addition to excellent organization throughout the year. Having a professional track your financial data can make tax preparation simple and easy. This leaves franchise owners with more time to focus on the day-to-day needs of the business in order to achieve their long-term goals.
If you are a franchisor looking for trusted bookkeeping professional, contact Indevia. They offer accounting and bookkeeping services that can consolidate and streamline your financial data. They are skilled in assisting franchisors to improve their accounting relationships with franchisees. Contact the team at Indevia Accounting today and get started with their professional services.