This blog is the third of 5 blogs about how as a franchisor you can support your franchisees to manage their business finances.
In earlier blogs, we have talked about the importance of bookkeeping being done regularly and for franchise owners to be able to use the financial information to review their progress and make informed important financial decisions in their business.
So this blog goes a step further to talk about the benefits of ensuring franchisees have an effective bookkeeping software that they use to do their bookkeeping and manage their finances.
What are the key reasons for using a cloud bookkeeping based software?
You will probably be aware that there are many different very effective cloud based softwares out there on the market which cost a low monthly fee of up to £25 per month. These are ideal for small and medium sized businesses and this are perfect for franchisees to adopt from the start of their business.
There has been so much in the media about the Government plans to digitalise the tax system and so at some point in the future, it will be even more important for all businesses to have a bookkeeping software which will provide all the information needed for quarterly returns to the HMRC.
Here are just some of the other key benefits of a cloud based bookkeeping software;
- Accounts can be accessed from anywhere (pc, tablet, mobile).
- Systems are designed with business owners in mind and so are easy to navigate and interpret
- It is not just the bookkeeping that is done on the software. These softwares are ideal for managing other financial operations. Here are some of the things you can do;
- Creating and emailing sales invoices to customers
- Credit control
- VAT Returns
- Job costing
- Cash flow forecasting
- Stock control
- Keeping track of who you owe & payment runs
- Financial reports and information
- Multiple users can access the system without additional cost which means that their accountant, bookkeeper, Franchise HQ could other staff could also have appropriate access
- Saves time as processing and reconciliation is efficient
- Scanning softwares can be used to save processing time
- Businesses can be paperless and can find all their information in one place
- Importing information from other systems can be done e.g. CRM systems
- Integration with other systems is very common, allowing other work processes to be streamlined
Should all franchises be required to have the same system?
This is an interesting question because there are two routes that as a franchisor you could go down;
- You could give your franchisees the information about why to invest in a bookkeeping system and what to do and then give them the freedom to choose their own software and bookkeeping arrangements. In this scenario, it gives them the freedom to choose whichever software they are most comfortable with and to set it up in a way which works for them.
- Or you could require all franchisees to do their bookkeeping in the same way – with the same software type and a consistent set of chart of accounts to make comparing franchisees very simple. The advantage of this scenario is that franchisees can call on others in the franchise for support or advice on their bookkeeping and how to use the software. From the franchisor’s perspective, there are massive benefits in having all franchisees operating in exactly the same way and reporting their financial performance in the same way. It enables franchisee data to be easily compared and analysed and it is also very transparent.
How can you best help franchisees with their bookkeeping software and system?
Here are some options of the type of support you could provide;
- Provide training and support to new and existing franchisees in bookkeeping
- Make sure all franchisees are clear about your expectations and what information Head Office need to receive from franchisees and ensure this is provided regularly
- Put in place preferred suppliers of companies who can help them or do bookkeeping software set ups for them
- Include in the initial franchise fee, the cost of providing an accounting system and training
- Keep franchisees up to date with changes which will affect them
We hope this blog illustrates how Franchise HQ can support all franchisees in different ways to manage their business finances well because there are obviously significant benefits for both the franchisees and the franchisor.
This blog is part of a series of 5. Please see the links below to all 5 parts of this series of blogs on how you can support your franchisees with their business finances.
We have previously been franchisees as well as now being in a position as a bookkeeping practice of supporting franchisees and franchisors with their finance and bookkeeping needs. The Bookkeeping Department are committed to helping those in the franchise sector to manage their business finances effectively. If you have any comments on this blog or think we can help in anyway, please do get in touch www.thebookkeepingdepartment.co.uk or email email@example.com
If you are running a franchise business or in the research stage of buying a franchise, you should register for our next webinar – 6 Simple Steps To Great Financial Management.
The webinar is run by ourselves and Emma Austin FCMA CTA from Enterprise Tax.
It’ll be an informative and interactive session to help business owners manage their finances more effectively and to make more profit.
Register for free here: https://zoom.us/meeting/register/1ab71e5f370284eb66858a512be5123a
Please contact us for further details or for the dates of future webinars.