You’re a franchise owner. How can you keep your accounting organized?

Organizing your accounting effectively starts with selecting software that aligns with your requirements. Prioritize software capable of seamless integration with your point-of-sale system, bank accounts, and your franchisor's reporting system. Look for a solution that can generate accurate and timely financial statements, including income statements, balance sheets, and cash flow statements. Options tailored for franchises may exist, while others offer greater customization. Before making a decision, conduct a thorough comparison of features, costs, and reviews across different accounting software. Ensure the chosen platform not only meets your current needs but also accommodates potential future requirements.

I am an independent, certified franchise consultant working with hundreds of brands. From my experience in this industry, most good franchise brands will be able to guide you on what is the best accounting, bookkeeping, and payroll systems that work best for their type of business. These brands also go a step further and already have these systems setup for you so when you joni their system as a franchise owner, you just need to get setup in the system. The other advantage of having these systems already setup at the franchisor level is that it always turn out to be most cost effective and allows for better reporting to understand how your business is doing in comparison to other business owners in your network.

Without a doubt, as an experienced business owner myself, I learnt the hard way that no matter how attractive a business opportunity is probably the most important aspects of being successful is to be in control of your financial duties. This starts with setting up your Business Plan and profitability projections at the onset and then adhering to them after allowing for outside factors like an economic downturn or unforeseen competition. The success of a business is not measured by the number of burgers sold but rather by the difference between that and what it cost you to sell them! Make sure that you have financial systems in place that help you monitor profitability on an ongoing basis and, then act on this information.

Establishing clear separation between personal and business accounts is the second step in organizing your accounting. This separation minimizes the risk of commingling expenses and income, facilitating accurate tracking of cash flow and profitability. Additionally, if you own multiple franchise locations, it's advisable to maintain separate accounts for each. This practice enables focused monitoring of each unit's performance, allowing for timely identification of both issues and opportunities. Ensure distinct bank accounts, credit cards, and ledgers for each business entity to maintain a clear financial trail.

This is very important step and unfortunately one that new franchisees overlook in their first couple of years owning a business. You have to respect the business entity no matter how small the business is in terms of separate accounts, financial statements. and tracking of expenses. Commingling of business and personal finances almost always leads to trouble especially when dealing with income tax filings. Commingling can also cause significant issues with your business entity liability protection and cause the "corporate veil to be pierced"

The other great lesson I learnt when first starting in business was understanding that Sales is NOT Profit! My cardinal sin was to only really consider our sales for the week or month rather than regarding this number as one of the important numbers in terms of cashflow, profitability etc. for that period. It was not until my brother, a CPA, joined in our family business that the sanity of considering budgets, projections, product price increases was a real consideration for me. Now with his expert advice, and control, of all the factors outside of sales, we finally started turning the ship around! My advise to anyone, in any business, is to ensure that either yourself, or someone with an accounting background should always be involved.

Get some help, you didn't buy your franchise because you wanted to be an accounting proffesional. A good accountant should pay for themselves in managing your record keeping and allowing you to work on growing your business. A good accountant will, in many cases, also help reduce your tax bill and take cost out of your business, they also keep you the right side of HMRC in the UK too!

The third crucial step is enlisting the services of a professional accountant or bookkeeper. This expert will efficiently manage your financial records and transactions, offering invaluable benefits such as time savings, cost-effectiveness, and reduced stress. Their expertise ensures accurate, compliant, and up-to-date accounting, relieving you of the burden and potential pitfalls of DIY financial management. Beyond day-to-day tasks, a professional accountant or bookkeeper can play a pivotal role in tax preparation, filing, and planning. They also offer valuable advice and guidance on various financial matters. Depending on your budget and requirements, you can opt for a full-time, part-time, or freelance accountant.

As per my personal ownership over many years shows, do not make the mistake that the growth of your sales is the only subject to pay attention to in any business. Sure, without sales you do not have a business. However, without control of the expenses involved in generating these sales like, rent, interest rates, cost of goods etc., is known to be THE major reason for business failures. So, upfront you need to understand your own strengths and weaknesses and if selling is what makes you tick, but you hate doing the accounts, then find an experienced CPA, a Book Keeper, a tax expert that looks after these aspects and you should meet them regularly to update you on all financial matters. You need to “be a master of all trades” in business!

Establishing a regular schedule for recording, reviewing, and reporting financial data is the fourth critical step in organizing your accounting. Adhering to a structured routine, encompassing daily, weekly, monthly, quarterly, and annual tasks, ensures the accuracy and timeliness of your financial processes. This routine should include entering and reconciling transactions, scrutinizing bank statements, generating and analyzing financial reports, and submitting required reports to your franchisor.

Implementing a checklist is the fifth essential step in organizing your accounting, ensuring that all necessary tasks and documents are completed systematically. A checklist serves as a valuable tool to keep you on track, prevent oversights, and maintain consistency and quality in your financial processes. You can craft your checklist or utilize templates available from your accounting software, franchisor, or accountant. A comprehensive accounting checklist should encompass items such as invoices, receipts, deposits, payments, adjustments, reconciliations, reports, and audits.

In my experience as a franchise owner, I know that organizing my accounting is critical. I tell my clients to implement the Profit First system as I do, to allocate a portion of sales into separate accounts for profit, taxes, owner pay, operating expenses and royalties (in the case of franchising). I categorize every expense transaction in my accounting software weekly so I understand exactly where my money is going. I have a Monday morning practice of allocating and categorizing. Staying on top of this ensures I know my real-time financial health, and helps to meet my obligations like royalties. With Profit First and disciplined accounting habits, I have financial visibility to run my franchise efficiently. Lastly, I hire a bookkeeper!

Can it provide timely and accurate information to shape strategy, innovation and be pro active in your franchise business. Consider how easily the accounting software connects with other operating software and application for your franchise business especially those mandated by your franchisor. Consider the ease of use as well- it is internet based, how easy can it be understood and how user friendly it is. What are the reporting options like, for key reports and storing data. How easily can it be integrated with Microsoft Excel or google sheets to allow manipulation of data. Consider ease of accessing customer service when needed! Consider how easy the system is prone to user manipulation. Software I suggest Quickbooks and Sage.

A organiza??o pessoal é essencial para implementar as etapas propostas no artigo sobre manter a contabilidade de uma franquia organizada. Ao estabelecer uma rotina disciplinada, os proprietários de franquias podem dedicar tempo e energia para escolher o software adequado, separar suas contas pessoais e comerciais, contratar profissionais qualificados, seguir um cronograma regular, utilizar listas de verifica??o e buscar aconselhamento quando necessário. Uma abordagem organizada e estruturada permite aos proprietários gerenciar eficientemente suas finan?as, garantindo conformidade, precis?o e eficácia na gest?o contábil de suas franquias.