How Franchise Accounting Software Solves Four Franchise Financial Management Challenges
Franchises are big business. There are approximately 76,000 franchise establishments across Canada, with around 4,300 new franchise outlets opening each year.1 Franchises are such a popular business model that increasingly, multi-unit franchise owners are the norm. The typical Canadian franchisor operates 12 corporate units and 63 franchised units for a total of 75 units. While operating multiple units may be good for business, it certainly complicates accounting. However, there are ways to simplify the complexity. Franchise accounting software is designed to handle the complex multi-entity, multi-location — even multi-currency — financial management challenges facing franchise operators. Below are four common challenges facing franchise owners, along with the ways franchise accounting software can help you solve them.
1. Complex consolidations
Monthly consolidations for multi-entity companies is typically a time-consuming, largely manual process. Franchise accounting software speeds and automates consolidations, delivering up-to-date information when and where you need it. Rather than waiting for month-end for consolidated reporting, multi-entity consolidations are available with a push of a button, so you can close your books faster and view interim summary figures at any time. And every consolidation creates a detailed journal entry report, giving you full auditability and operational transparency.
2. Time-consuming intercompany processing
Many accounting applications do not handle intercompany accounting well. As a result, you may need to sign in and out of multiple companies — each with its own set of vendors and accounts — duplicating efforts and hoping for consistency and accuracy. With software designed for the franchise industry, you can share vendor, customer, item lists and charts of accounts across entities to speed new entity creation and facilitate cross-entity reporting. You can also automate inter-entity due to/from transactions and centralize payables and receivables for further efficiency. By centralizing accounting functions, you’ll gain purchasing efficiencies, including better volume pricing from your vendors.
3. Disjointed reporting
If you’re relying on an accounting software package like QuickBooks to manage your franchise, you already understand how difficult it is to obtain performance reports that span the enterprise. Franchise accounting software eliminates the blind spots in your organization, allowing you to quickly compare performance across each of your franchises. And you can easily switch between consolidated and local views for deep insight, or to share location-specific data with local management.
4. Data silos rob visibility
It’s likely you’re using several industry, or purpose-specific software applications in your franchise operation, with each one holding valuable business data. When data resides in disparate silos, however, it’s difficult to gain a complete, comprehensive view of the financial health of your operation. Modern, cloud-based franchise management applications utilize APIs to facilitate integration with many third-party applications, including CRM, payroll, business intelligence, and more. The ability to bring your vital business data under one roof boosts visibility and empowers you to make more informed decisions quickly.
Best-in-class franchise accounting solutions
Franchise accounting is inherently complex. However, software designed for the task reduces complexity by eliminating the time-consuming duplication of efforts and providing real-time insight into the operational health of your entire enterprise. Sage Intacct offers powerful, flexible, best-in-class financial management solutions that are transforming how franchise operations increase their efficiency, drive growth, and plan for the future.
We invite you to download a free copy of The Insider’s Guide to Franchise Financial Management: Rising to the CFO Challenges and contact us with your questions.