Franchise Bookkeeping: A Simple Guide to Streamlining your Process
QMK Consulting
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Introduction: What is Franchise Bookkeeping and Why Should you Streamline this Process?
Franchise bookkeeping is an important process that helps businesses stay organized and efficient. It means keeping track of and writing down all of a franchise business's financial transactions, which can take a lot of time and effort. By streamlining their own bookkeeping, franchise owners can save time and money while keeping accurate records. A business owner who has the experience to handle the financial side of their business is more likely to remain competitive and profitable for the long haul. There are many ways that bookkeeping can be streamlined, from outsourcing certain tasks to technology. Outsourcing services will allow you to focus on strategic planning and other aspects of your franchise that require serious attention rather than managing every detail in your business.
How to Create a Systematic Framework for Franchise Bookkeeping
Keeping the financials of a franchise and franchise unit organized and up-to-date is an important part of running a successful business. For accurate and consistent financial reporting across all franchise locations, it is important to set up a system for franchise bookkeeping.
In this article, we will discuss how to create a systematic framework for franchise bookkeeping that can help you save time and money. We will look at the different ways you can automate bookkeeping processes, such as using accounting software or outsourcing your bookkeeping tasks to professionals. We'll also talk about some of the benefits of automating your franchise's financials, such as making them more accurate and saving time. Here are the steps to creating a systematic framework for franchise bookkeeping:
Understand the Franchise Business Model
The first step is to understand the franchise business model, including the franchise agreement, fees, and revenue sharing. This will help you determine what to include in your bookkeeping system.
Establish a Chart of Accounts
Establish a chart of accounts that is tailored to your franchise business. This should have sections for franchise fees, royalties, payroll, inventory, and other costs that are specific to the franchise.
Download our simple COA by clicking here.
Standardize Bookkeeping Procedures
Standardize bookkeeping procedures across all franchise locations to ensure consistency in financial reporting. Make a manual that explains how to keep track of transactions, compare bank statements, and make financial reports. The accounting manual differs for each business based on the business model and accounting practices in each location.
Download our Bookkeeping Procedures Checklist.
Choose Accounting Software
Choose accounting software that is capable of handling the specific needs of franchise bookkeeping. The software should be cloud-based so that all franchise locations can access it and find it easy to use. Accounting software most used in the US market for small and medium-sized businesses:
- QuickBooks Online
- Deskera
- FreshBooks
- Patriot
- Sage
- Wave
- Xero
- Zoho books
source: 7 best quickbooks online alternatives for business accounting.
Train Franchisees
Provide training to franchisees on how to use the accounting software and follow the bookkeeping procedures. This will make sure that all franchisees keep accurate and consistent records of transactions.
Conduct Regular Audits
Do regular audits to make sure that all franchisees are keeping accurate records and following the rules for bookkeeping. This will help to identify any discrepancies and allow for timely corrections.
Use Key Performance Indicators
Use key performance indicators (KPIs) to monitor the financial health of the franchise business. KPIs should include metrics such as revenue, profit margins, and inventory turnover.
The following is an example of an interactive dashboard created with key performance indicators (KPIs) and other important metrics for a business using Microsoft Power BI.
What are the Benefits of Automating Your Franchise Bookkeeping?
Automating the bookkeeping for your franchise is a good way to cut costs and make managing your finances easier. With automation tools, you can enter data into your financial systems quickly and accurately. This saves time that would have been spent entering data by hand. Automated data entry systems also make sure that all transactions are recorded correctly. This makes financial operations more accurate and easier to keep track of. Also, automating bookkeeping can help franchises save money by making it easier for them to keep track of their finances.
How to Take Advantage of Technology to Streamline Your Franchise Bookkeeping Processes
Technology has revolutionized the way businesses manage their finances. By taking advantage of financial software solutions, such as cloud accounting software and automated data entry systems, franchise owners can streamline their bookkeeping processes and make them more efficient.
The Best Practices for Streamlining Your Franchise Bookkeeping Processes
Franchise bookkeeping is an important part of any business, and it's essential to ensure that it's done correctly. Streamlining the way you keep the books for your franchise can save you time and money and help you stay accurate and in compliance.
- Use a Cloud-Based Accounting System: Consider using a cloud-based accounting system that allows you to access your financial records from anywhere at any time. This can help you stay on top of your finances and collaborate with your bookkeeper or accountant easily.
- Establish Consistent Procedures: Establish consistent bookkeeping procedures across all franchise locations to ensure uniformity and accuracy. This can include using a standardized chart of accounts and bookkeeping software.
- Automate as Much as Possible: Automating routine bookkeeping tasks such as invoicing, bank reconciliations, and expense tracking can save time and reduce errors. You can use accounting software to automate these tasks and free up time for more important activities.
- Keep Accurate Records: It is essential to maintain accurate and detailed records of all financial transactions, including receipts, invoices, and bank statements. This can help you track cash flow and identify areas for improvement.
- Hire a Professional Bookkeeper or Accountant: Consider hiring a professional bookkeeper or accountant who specializes in franchise accounting. They can help you manage your finances more efficiently and provide valuable insights into your financial performance.
- Implement Internal Controls: Implement internal controls to prevent fraud and errors. This can include separating financial duties and regularly reviewing financial records.