5 Ways Your Franchise Can Leverage Bookkeeping To The Fullest
Accountants are storytellers in many ways – they unearth patterns from a business’s books of accounts and define how going forward that will lead to a company’s happiest ending.
There are multiple facets to business accounting, and different industries have different requirements – one aspect common everywhere, however, is bookkeeping.
Bookkeeping is often seen as a boring and tedious routine, and so many franchise businesses tend to stay away from it. They often regard this function as more of a headache, which is not worth the time and effort.
They do not realise that bookkeeping for franchises can be highly profitable as long as the franchise businesses go about it the right way.
It is also a great way to stay consistently connected with the ground realities of the business in terms of finances and putting together growth plans.
If you have not taken bookkeeping seriously in the past but now want to do so, here are five ways in which you can make it a vital function of your business:
1. Systematise your bookkeeping process
Efficient systems are critical to any function or department running smoothly. Core bookkeeping functions common to industries everywhere include payroll management, document collection, general ledger, etc.
By ignoring your books of accounts, your company’s financial records will become outdated and unreliable. You will no longer have an accurate idea of where you owe money or where your cash is coming from.
Moreover, the lack of updated books of records will limit your access to financing—which will act as a massive disadvantage whenever you seek a loan for your franchise business. Banks need written evidence of your transactions to grant you funds.
Therefore, an excellent way to improve the franchise business’ efficiency is by systematising your bookkeeping process, starting with maintaining a record of your documents.
2. Manage the scope of work in bookkeeping
The best way to delegate and coordinate bookkeeping tasks is by setting expectations beforehand regarding who owns which step in the process. An excellent way to do this is to have a scoping agreement in place so that there are no grey areas on the deliverables.
This way, you can manage everyone’s expectations, and there is no confusion about who is responsible for/gets credit for which part of the process.
Your bookkeeping function must be transparent so that there is a financial trail you can see and refer to if there are discrepancies spotted.
3. Trust in cloud computing
Cloud-based bookkeeping software is the best way to go if you want to make money out of bookkeeping. It stores data securely, balances transactions accurately and allows for efficient collaboration. There are several affordable software options out there for you to choose from, and most can be easily integrated with your in-house bookkeeping function.
At Agility Bookkeeping, we recommend all our clients migrate their bookkeeping system to Xero. It is an excellent platform for automating daily business tasks and getting an updated view of financials, on-the-go.
Another USP of Xero is that it integrates with many small business CRMs, customer service platforms and productivity apps, which makes day-to-day business operations a breeze.
Therefore, be sure to pick a software provider with flexible pricing plans and the ability to scale up or down as needed as your franchise business evolves.
4. Identify value-add opportunities
Having regular reports on your books of accounts will show you your franchise business’s financial health. That will allow you to spot any discrepancies and help you identify any growth opportunities quickly.
With accurate bookkeeping, you will be able to identify, for example, if there is a specific product or service that your customers are buying in greater volume. Feeding that information to the relevant part of your business may mean further opportunities can be driven for value-adds or other ways to drive greater revenue and profitability.
5. Outsource it to expert bookkeepers
If you are struggling to manage bookkeeping on your own, it is never a bad idea to consider outsourcing. It is a common misconception that bookkeepers and accountants perform the same function – while accountants focus more on strategic operations, bookkeepers are concerned with those essential day-to-day financial transactions.
Outsourced bookkeepers are experts at what they do and can act as the critical outsider point of view, spotting errors and opportunities that you might miss. They can offer various services such as dashboard reporting, payroll and end of year accounts.
Outsourcing is also more cost-efficient than recruiting and training in-house bookkeepers—which could be a boon, especially if you are cutting costs across the company but do not want to mess up the basics.
Wrapping it up
Since all franchisors rigorously monitor their franchisees, you need to stay on your toes and ensure benchmarking is maintained and reported accurately every month. You can resolve any issues that may arise to protect your franchise business reputation.
Thankfully, our team at Agility Bookkeeping will ensure that your bookkeeping function is always performing at its best. If you are interested in learning more about our services, please fill our contact us form, and we will call you at the earliest.