As a franchisor, there’s always a risk when you allow franchisees to take responsibility for their own accounts. On the flip side, without the right tools in place, carrying the weight of the entire franchise’s finance function on your own shoulders can be somewhat overbearing. Not to mention counterproductive. It occupies time that could be better spent growing your burgeoning business.
If your franchisees are pulling in different directions, using different software, and following different advice from different accountants, it could be hindering your franchise’s opportunity for growth and creating problems where there needn’t be any.
A united, tech-savvy franchise is a productive franchise. And, your franchisees need to be working towards a common goal. They need systems and service providers who can handle the demands of a national network.
As you know, franchisees must adhere to certain rules of operation. This is to ensure consistency and make sure the standards of the company are upheld. Systems and processes are mandated, as are things like marketing slogans and uniforms. So, why not do the same with your company’s accounts and accounting technology?
1. Improve Productivity, Increase Profit
The importance of incorporating franchise accounting software as part of your financial strategy cannot be overstated. Combining the latest technology with a professional, standardised - and often outsourced - accountancy method is essential for any forward-thinking franchise.
The right franchise accounting technology allows you, as a franchisor, to strike the perfect balance between supervision and micromanagement. Without intruding too much on your franchisees, or wasting your own precious time and resource, you can benefit from digestible, data-driven reports to help you track crucial elements like:
- Financial performance
- Sales figures
- Revenue fluctuations
- Inventory levels
… and other associated costs, all at the touch of a button. With high-quality, real-time information, you’ll gain a solid understanding of the franchisees in your network. And, you'll have the capability to properly evaluate how they’re doing against the company benchmark. So, you can address problems as they arise. And, you can implement better practices across your network to improve the performance of any floundering franchisees.
The result is an increase in productivity and an upsurge in profit. It’s the smart way to do business.
2. Franchise Accounting Technology: An Investment, Not A Cost
Franchise accounting technology is an investment for your business, not a cost.
As a multi-entity company, you need to be able to respond accordingly to variables that fluctuate from one franchisee to the next. And there are plenty of tools and providers out there that can help you with this. One such provider are our friends, and fellow British Franchise Association (BFA) members, Fathom.
With offices in the UK, the US and Australia, Fathom’s unique product is ‘transforming the way people create management reports and access timely business insights’ across the globe. Used by both franchisors and franchisees, with Fathom, you can rank, compare and benchmark all entities within your group, consolidating your information and assessing who’s performing well and who might need some support.
Here’s their Head of Account Management, Antoni Gomez (ACA), on the opportunities that franchise accounting technology presents.
3. Harmonise Your Data
AG: “One of the biggest pain points among franchise groups is non-harmonious data across franchisees. Common examples of this include:
- Transactions categorised in different ways.
- Financial accounts with different naming conventions.
- Reports showing information in unique formats from franchisee to franchisee.
To solve this problem, franchise accounting technology allows you to harmonise your data by defining charts of accounts, KPIs, and reports at the network level. This means all franchisees follow the same accounting and reporting structure. In turn, this helps you make more meaningful comparisons and judgements about your network.
Another important benefit is the automated consolidation of results. Franchise networks often require consolidations at many levels.
The benefits of consolidation are:
- Having all units run by a single entity to see a complete view of franchisee performance.
- Aggregating results across a region, which reflects the market conditions in that area.
- Consolidating the whole network to give you the full picture of your franchise’s performance.
With harmonised data and innovative ways to consolidate results, it’s much easier to identify opportunities to improve performance, or to spot potential problems ahead of time. With the right franchise accounting technology, you can:
- Find top performers by benchmarking and comparing units, franchisees or regions.
- Look for learnings that you can share to improve the performance of the whole network.
- Identify weaker performers to help you spot potential issues early, and take steps to address them.
Another great benefit of franchise accounting technology is the ability to provide different stakeholders with different views. It’s easy to set levels of access to information (for example, allowing franchisees to only see their own data) or to create different reports and KPIs. So, each person sees the information of most value to them.”
4. Danbro Business: Your Online, Cloud Accounting Specialists
At Danbro Business, we specialise in online, cloud accountancy. Our tailored approach blends the best new technology with personal, practical accountancy, delivered by real people who care about your business. So, you’ll get a streamlined service that’s built around you.
As well as our partnership with Fathom, Danbro Business’s sophisticated tech stack comprises some of the UK’s leading accountancy software providers. So, depending on your circumstances, we can recommend which platform, or platforms, best suit your needs. It’s the smart way to do business.
Sam Wright is Danbro’s Marketing Manager. He produces regular content and feature articles on our digital and non-digital channels – and social platforms – for the Danbro Group and its subsidiaries, as well as having responsibility for the Company’s internal and external communications.
His background is in Journalism and Creative Writing, having previously contributed to publications such as The Daily Post, The Lancashire Evening Post, and The Blackpool Gazette.
He is a keen swimmer and avid Manchester United fan (but don’t hold that against him), and he lives in Lancashire with his wife, Sarah.