To run a successful franchise business, you must keep track of your finances and have bookkeeping developed.
The word accounting comes from the word accountability. If you are going to be rich, you must be responsible for your money, said Robert Kiyosaki.
Surely you have heard of McDonalds, a great example of a franchise business.
Franchise means the distribution of goods/services. Includes a grant from the franchisor or another party. One party gives another the right to sell goods or services.
What is Franchise Accounting?
Let’s take a look at franchise accounting and understand what it means.
Quite simply, franchise accounting is when you have a franchisee and a franchisor.
The franchisor will have two franchise income. The first is to purchase property and assets and at that time use the franchisor’s name, logo, and brand. And the second is a continuous contribution, which means that the franchisee pays money from the amount of income.
Depending on the contract, there may be several differences. Thus, the franchise business accounting process may be different.
If you’re opening a burger cafe and choose to franchise, consider preparing your team for franchise accounting.
Once the franchisor helps you open the business, their involvement will be ongoing for accounting and bookkeeping.
What franchises need from an accountant
Franchise companies are successful as they have the opportunity to receive instant assistance. However, they also pay franchise and existing business fees. As a founder, you need a professional accountant to manage income and expenses.
Getting a professional accountant is the first part of the task, then you need to know what you can expect to get from your accountant.
Let’s see a practical example to have a better understanding. If you’re looking for the best low-cost franchises, you’ll find plenty of options. For example, a dog training franchise is an affordable opportunity for beginners. Your accountant should help you with legal documents and start-up finances.
Franchise accounting begins right after you get approval to sign the contract. Your accountant should work closely with the lawyer and help you with the preparation of the contract.
You can expect your accountant to be CPA certified and ready for instant training and insights on new trends.
Online tools are available to track employees’ hours and work rates and calculate their salaries. Create pay stubs to organize lists of employee pay details and manage the salaries of your workers and financial people. For more organized employee monthly cost lists, you can use Excel timesheet templates, remember to include all dates and detailed descriptions of all expenses.
expense management
Expense management is the core part of franchise accounting. To make expense management more accessible, it’s a great approach to using the software.
These are the main expenses of the new Franchise Business.
These include initial marketing design, website setup, legal advice, licensing, insurance, training, and site selection or enhancement fees.
- This cost category includes money you’ll spend on material things like land, equipment, starting inventory, furniture, and signage.
- These are all physical items that you will need to start your business.
- Monthly start-up costs is a cost category that includes the money you’ll need to have in the bank to run your business before you start making a profit.
- This money will be used to pay for recurring expenses such as rent, payroll, utilities, ongoing inventory, and marketing expenses.
- If you have already started your business and have an idea to grow or expand it, you may need additional financing.
- To manage expenses effectively, you need to have a financial analyst and an accountant working together as a team.
There are many ways to keep track of the financial side of your business. The key is to make sure you keep track of things consistently and accurately. If you pay attention to this task, it will become more accessible and you will have a powerful tool for understanding the financial health of your business.
Reasons to hire an accountant
Having an accountant is an essential step for a franchise business, and here are 5 reasons why you need an accountant.
- Save money and reduce costs by hiring a professional accountant to help you manage taxes and file tax returns.
- Franchises that have accountants are at risk of making costly mistakes. And founders and leaders have more time to work on contracts and customer service.
- If you hire a professional accountant, you have a better chance of raising money and organizing bookkeeping. With the help of a professional accountant, you can keep your cash flow and balance sheet in order.
- Accountants save you from fraud and unnecessary expenses, and with the help of their knowledge, you can avoid unnecessary costs.
- It has the advantage of discussing the risks of new contracts and partnerships.
How to find the best accountant for your franchise business?
Now let’s focus on the question of how to find an accountant for franchise accounting.
Some accountants have specific knowledge and experience in franchise accounting, and it would be best if you included an accountant with the knowledge and experience.
Accountant qualifications and certifications are essential. Hire a financially credentialed professional with the highest ROI.
To find people with proper financial backgrounds and certifications, you can use the premium version of Linkedin. You can work with accounting firms if you don’t need an in-house bookkeeper. If you have a lot of tasks and can’t navigate between them, you can hire a virtual assistant and get help from your VA.
Another great way to hire professionals is Upwork, as many freelance accountants will be ready to cooperate with you.
Ending
Franchise accounting works like regular accounting; however, it has some particularity. You should be aware that franchise accounting has outstanding fees, marketing costs, and collection systems.
It is a good idea for franchise companies to hire a professional accountant to avoid mistakes and keep financial management under control. Hiring an accountant will help prevent risks, wasteful payments, and flawed contracts and partnerships.
Categories: Technology
Source: SCHOOL TRANG DAI
