One of the main benefits of being a franchisee or a franchisor is the satisfaction of being your own boss. You make the decisions. The downside? You live with the consequences. That's why it's important that the decisions you are making are informed, strategic, and rooted in robust and accurate information.
The equation is generally simple: The better the information you have, the better choices you'll make – and reliable information starts with accurate and effective financial reporting.
If you're a franchisor, robust financial reporting can let you compare the performance of different franchisees, or help you understand why some units perform better than others.
If you're a franchisee, reliable financial reports can show you where you can improve your business's efficiency and operations, to contain your costs and raise your profits.
Yet many franchisors and franchisees struggle to get financial information they can depend on. Would you like to know if you are arranging your financial reporting system to make it as efficient as possible? Do you want to improve your access to the full, accurate and timely information you need to make your business a success? Luckily, you can achieve these objectives in a few simple steps.
Step #1: Ensure You Have the Right People Looking After Your Books
One of the most crucial components of an efficient financial reporting system – yet often the hardest to put in place – are the qualified, dedicated people you need to handle your books.
Bookkeeping is the bedrock of any successful business. Yet unlike other areas of business, bookkeepers don't require certification. As a result, too many franchisees, and even franchisors, end up relying on those they choose to do the job – a family member, a part-time employee, someone on contract, or someone who has other job duties to also fulfill. The result is that many vigilant owners end up spending time double-checking the entries, or worse, doing them themselves.
As with any skill set, bookkeepers tend to apply their skills to one particular market sector – and while bookkeeping principles may be the same, each franchise business has its own particular quirks.
Is your bookkeeper “Account Supervised”, with multiple levels of review? That can help ensure the accuracy of the financial information you receive. Bookkeepers who have the experience of working with major franchises of all shapes and sizes, from restaurant and retail, to service franchises and more, can often anticipate challenges to your business before they arise. We've found that skilled and experienced bookkeepers who are experts at recording and delivering the right information to you, month after month, will help you have peace of mind about your operations.
And sometimes, a more dependable solution is to outsource your bookkeeping services entirely. Not only will you receive a high level of expertise and knowledge, but you'll also be protected from vacations, retirements, or resignations. You'll maintain the services you need, and the quality you've come to expect, with uninterrupted services and continuity that are always in place.
A bookkeeping supplier will also have experience in using different financial reporting technologies, and can offer advice about the different systems available on the market. That's important, because the other crucial component of an efficient financial reporting system is the right technology for your business.
Step 2: See Through the Clouds
Effective information is of little use unless you can access it – quickly, easily and when you need it most. That's why your financial reporting service should ensure that all your data is available through your own secure cloud-based online client portal, on any browser and device.
This should include, at a minimum:
- Bank balance
- Cash flow
- Cash cycle
- Income & Expense report
Locating your data in the cloud makes it more accessible – from home as well as at the office, and from any location in a multi-unit franchise. There's no more risk of losing access to crucial data on a password-protected computer, when someone is ill or on vacation, or suffers an accident. It also means you can share your information with any third parties you choose to engage – your accountant, your business advisor, your lawyer. You control who sees your information, and what parts of it they see, while avoiding the risks associated with email.
In addition to control, cloud-based technology can also provide on-demand access to your financial information, and to your finances. When there are bills to be paid – telephone, rent, utilities – you can run your approvals and scan/drop the source documents to a secure library. Your bookkeeper can then access that file and make the appropriate entries to complete the transactions. There are no papers to get lost, no tracking to be done, no trolling through emails to find an attachment. And you can spend more time on operating your business.
Best of all, cloud-based accounting systems are customizable and scalable – they grow as your business grows. You don't need to make a big initial investment in specialized technology, or to try to avoid costly upgrades by making do with less than you really need. Cloud-based solutions provide this investment in leading-edge technology for you, delivering an affordable solution that grows with your needs.
Step 3: There's Confidence in Compliance
One of the most important functions of your financial reporting system is to ensure that your tax remittances are made throughout the year in an accurate and timely manner. That's where people and technology come together to give you the confidence that your business is operating safely and securely.
Even today, too many Canadian businesses fall back on the “shoebox approach”, leaving accountants chasing their tails come tax season – and leaving clients with a large bill to clean up the mess. Well-prepared and timely tax filing helps you avoid costly and time-consuming audits, and also keeps your profits safe from costly and needless fines.
BDO has for many years provided scalable and customizable services to players in every area of the franchise industry. From increasing data accessibility and reducing technology headaches, to eliminating staffing issues, BDO's Managed Bookkeeping solutions can meet the needs of a franchisor or franchisee in any area of financial reporting – or in all of them.
BDO's Retail and Consumer Business Practice advises clients on the full impact of shifting market forces on businesses in the franchise industry. We tailor our strategies to help clients proactively manage a wide range of issues they face today, and those they'll face tomorrow – including managing currency fluctuations, investing in new technology, optimizing supply chains, and expanding into new markets through Mergers and Acquisitions. Our professionals draw on extensive, industry-specific knowledge of regulatory, reporting, and complex tax requirements. That way, we help you manage risk, overcome obstacles, and reach your next level of success.
If you want to ensure that you have access to the information you need to make the best decisions for your business, and to ensure that it's organized and structured in the most efficient way possible, please contact your local BDO office today. We'd be happy to help you gain the peace of mind you need to do what matters most – look after your customers.