Franchises comprise a key component of the economy, with entry more easily available to a wider population than independent business ownership. Thus, they provide an attainable means to achieve that American dream of owning a business, along with the benefits of maintaining a sense of freedom.
If you are a franchise owner, it’s an exciting time for you. Earlier this year, the International Franchise Association (IFA) president & CEO Robert Cresanti said, “We are forecasting that for the sixth consecutive year, franchise businesses will grow at rates that exceed the economy-wide growth of industries where franchises are concentrated.” His statement was based on information in Franchise Business Outlook: 2016, a report the IFA released in January.
What does a growing franchise need in an accounting system?
As successful franchise owners see profits increase, many choose to expand and operate several locations. This means more opportunity for income and a chance to make an economical impact in additional communities.
That all sounds great, right? Yes, but some franchise operators become overwhelmed by the new accounting responsibilities with each additional location. When you double the employees, inventory, utility bills, etc. your accounting system may not be able to support multi-businesses and the need to roll up financials into a consolidated format.
When using entry-level accounting tools, many franchise operators run a separate set of books and have to manually consolidate financials at month-end. This is not only more work than necessary, but it extends the process several days, delaying key indicators such as profit and cash flow projections.
Anyone with multiple businesses also needs to allocate expenses across all of the entities. The more businesses you own, the greater the opportunity to allocate expenses across the companies in order to make more money.
Is there a way to grow without the pain? (Yes!)
Fortunately, growing pains can be reduced with the right accounting system. One solution designed to meet the needs of franchise operators is Intacct. This cloud-based software is built for multi-company, multi-entity businesses such as multi-unit franchise operations. Even the interface is easy—with a single log-in to view all the locations and companies at once. (Image 1)
You can consolidate your financials across multi-companies with the flexibility of custom financial tools such as the balance sheet, income statement, and cash flow statement. (Image 2)
Expenses and Revenue Allocation
You can allocate expenses and revenue to any location, from all entry screens in the system. (Image 3)
The Intacct accounting solution makes business processes go more smoothly and encourages you to continue to expand operations—and realize your entrepreneurial dream.