Did you know that there are currently 750,000 franchise establishments in the United States? With that many franchise businesses in America, the need for accounting is outstanding.
Finding the right accountant for your business can be stressful. When hiring one, make sure they understand your business model. There are a variety of specialized tasks and jargon that need to be understood and addressed in each industry.
Technically, any accountant can service this type of business. But having an accountant or accounting firm that specializes in franchise accounting will ensure you receive the most specialized services available.
Here are a few tips to make sure you have the perfect fit in your franchise accounting service.
Franchise Accounting: What is it?
Some may not understand what type of accountant they need or if they need franchise specific services. This involves managing the franchise’s finances.
Most accountants take care of a single business. With franchises, they have to take the larger market and customer base into consideration. One of the most important duties of a franchise accountant is paying certain fees to the franchise along with the ongoing royalty fee.
Some consider it a privilege of being able to own a franchise without any “risk” involved. But there are still many upfront costs the franchisee needs to invest to start their business.
Royalty costs, advertising fees, and royalty fees are just a few to mention; an accountant can help you understand these expenses.
How to Find the Right Franchise Accounting Service
There are some specific things to consider when selecting an accounting service for your franchise.
Most franchises operate similarly to a small business. However, there is additional reporting and compliance that needs to be taken into consideration. Along with that, there are also specific fees that need to be paid.
Franchise accountants are specialized in creating financial reports like profit and loss (P&L) statements, balance sheets, cash flow statements, and receivables.
The right accountant will ensure that all the bookkeeping is documented properly and that any fees and royalty costs are paid correctly and on time. That will determine the success of your business.
Here are a few tips to consider when searching for an accountant.
Find Someone That Specializes in Franchises
What type of experience or background does the accountant or firm you’re interviewing have? Do they have experience in franchise accounting or small business? There is a difference.
It is common practice for most accountants and firms to perform franchise-specific tasks. There is an added level of comfort, however, in knowing the individual or firm has experience in this type of accounting. You may even discover a piece of accounting software that specializes in franchise businesses.
Make sure that the firm or individual you are interviewing has the experience needed to give you the best service possible.
Make Sure They Provide Insightful Data
Being able to analyze data that offers valuable information is essential in planning for the month and year ahead.
Be sure that the franchise accountant you go with will be able to offer that insightful data that you can use to make your business as successful as possible. An accountant or accounting service that works with many franchisees in your brand should be able to provide benchmarking data in a timely manner that can help you drive business operations by showing you where you’re doing well, and where you could use help.
Use a Service That’s on the Cloud
You want to make sure your accountant keep track of all your data on the cloud. That way, your information will be safe and secure, and there will be no chance of losing it if a computer or hard drive is corrupted. No sending files back and forth, you can access all of your financial data from your computer whenever you need it.
Plus, if for some reason you part ways with your accountant, your data will be easily transferable.
Communication is Key
Make sure that your accountant or accounting firm or outsourced service commits to being responsive, at least during business hours, to be able to answer your questions and concerns when they come up.
Make Sure They Have a Backup
We’re all human, and we all have lives, but you also don’t want to be left hanging if and when your accountant goes on vacation.
Be sure to ask your prospective accountants who will be taking over your needs when they’re on vacation or on sick leave.
Discover Virtual Accounting with Ceterus
There are many professionals who offer franchise accounting services to business owners. The job of the franchise owner is to find the perfect fit that also works within their budget. This will ensure that their business continues to run as successfully and efficiently as possible.
Along with finding a good accountant to handle all your financial needs, you may use specialized software to make franchise accounting work seamlessly. These programs feature reporting templates and fee reminders to ensure nothing falls through the cracks.
You want your business to continue to run strong. Consider Ceterus, a virtual accounting service.
For more information, see our franchise solutions.