Scale-As-You-Grow Virtual Bookkeeping for Franchises
In 2019, there were 773,603 franchise establishments in the United States, employing more than eight million people. The franchise business model offers entrepreneurs significant benefits over starting a new small business venture. Franchise organizations often provide franchisees specific economic resources, brand name recognition in the marketplace, and targeted marketing strategies to specific demographic groups. Business owners operating a franchise can also benefit from many accounting advantages, including bookkeeping services.
It’s Not Your Grandfather’s Bookkeeping
Bookkeeping (the process of recording, storing, and retrieving financial transactions for an organization) is the core function of franchise accounting. Franchisors and franchisees both need to understand the intricacies of franchise bookkeeping for the model to succeed.
Common problems of incomplete and incorrect bookkeeping create both frustration and anxiety between franchisors and their franchise partners. These issues could ultimately lead to an inaccurate picture of how healthy individual franchises actually are. Having your bookkeeping in order is critical as your business grows.
As a result, many franchise organizations are now centralizing their bookkeeping and accounting systems utilizing cloud-based accounting software. This allows individual franchisees to access and update their business accounts daily, weekly, or monthly. With standardized bookkeeping you capitalize on the efficiencies that the franchise model offers and establish a set of procedures for tracking every dollar that comes in or goes out of your business.
Xendoo: Bookkeeping for Better Financial Insight
You became a franchisor to create a model to scale effectively and the opportunity to watch your brand reach new heights. Even after a franchise location is built and operational, you need to continue supporting their locations through ongoing brand support, typically at the national or regional level. In fact, this is one of the major advantages of buying a franchise — immediate access to an established brand versus having to start one from scratch.
To be successful, you need each one of your franchises to operate in a consistent manner. And standardization is most important when it comes to keeping financial records. However, many franchisors struggle with getting accurate revenue numbers and financial information from their franchisees.
Reporting for multiple franchises requires a robust system developed to handle consolidation. If your bookkeeping software isn’t built to handle multiple entities, it could be holding you back from getting the information you need. That’s why it’s imperative to define at the outset how the franchisee should establish their chart of accounts. That puts you and your franchisee on the same page — literally — from the very beginning. That, in turn, makes it easier to resolve disputes or misunderstandings or to avoid them in the first place.
No matter how proficient you are at running your franchise, doing bookkeeping for multiple businesses is tough. Fortunately, you don’t have to do it alone.
Using Xendoo online bookkeeping and accounting for small businesses can help franchise owners manage the business’s finances. You can easily access the software program from anywhere with an Internet connection so that both parties have instant access to financial records, including:
- Ability to establish a chart of accounts for all the franchisees that you can replicate and trust you’re getting reliable financials every month
- Ability to email a PDF monthly P&L and balance sheet directly from the app, so you are compliant in sharing financials
- Use the financial data to better train and coach/mentor your franchisees to ensure success (identify/understand where they’re successful and where they’re falling short (e.g., high labor, equipment, or materials costs)
Quickbooks Small Business Accounting Software
Included with the Xendoo bookkeeping service is Quickbooks Essential Small Business Accounting Software. Quickbooks is a simple, mobile-friendly, and real-time project management tool perfect for small businesses. It allows you to track the time and money spent on each job, allowing you to improve efficiency and drive profitability. With Quickbooks, you can:
- Track your time, enter expenses, and record any deposits
- Send automated invoice reminders and see whether your customer has seen an invoice and if it’s been paid
- Monitor project performance with up-to-the-minute time tracking and key account insights
Quickbooks is the perfect complement to Xendoo’s bookkeeping services, giving you all the tools you need to grow and manage your books. If your franchisees already have a Quickbooks online account they can simply use that, it makes it very easy and seamless. The Xendoo bookkeepers can even provide “catch up” services for your existing franchise partners to utilize as a part of the seamless onboarding process.
The Franchise Disclosure Document (FDD) and Item 19
Many franchisors fear the Financial Disclosure Document because it answers the most significant question potential franchisees have: “How much revenue and profit will I generate with this franchise?” Here is where franchisors can demonstrate precisely how profitable or unprofitable their franchise could potentially be.
Brands that include Item 19 show a level of transparency to their prospective franchisee partners. However, not all brands are as transparent as they could be or have a financial performance representation they feel will be beneficial to show it to prospects.
There are various reasons why a brand may choose not to include Item 19 on their FDD; however, regardless of the reason, not including Item 19 in the FDD could portray that your brand is hiding something from well-informed franchise contenders. This lack of transparency can create mistrust between your brand and the prospective franchisee and ultimately cost the sale. Knowing what Item 19 is and why it is vital before investing in a franchise can protect franchisees from investing in a brand that may not yield the income or success they expected.
Xendoo gives franchisors the ability to create a seamless FDD Item 19, via providing access to dashboards and reports that roll up financial data in categories (e.g., revenue, various expense categories, payroll, cash flow, etc.). Furthermore, it enables copying/pasting the averaged, aggregated data onto Item 19.
Now you can spend less time managing your bookkeeping responsibilities and more time growing your business.
Owning a franchise — and eventually owning multiple operations — is an excellent way for franchisees to increase income and independence without starting a business from the ground up. As a franchisee, they are an independent business owner, responsible for maintaining their books. However, if they’re just starting, there’s a lot they need to know about franchise bookkeeping before they even get started.
Owning a franchise requires diving headfirst into things they might not be too familiar with — like franchise bookkeeping. No matter how competent they are at running their franchise, doing bookkeeping for multiple businesses is demanding.
Xendoo’s number one priority is to support small businesses with financial peace of mind. Delivered through their proprietary technology, Xendoo provides accessibility to expert bookkeepers, CPA’s, predictable pricing, and key performance indicators. For example:
- Xendoo combines a technology platform with virtual bookkeeping, CPA, tax preparation, and payroll services at an affordable rate, ranging from $195 to $1,000, depending on the size of your business (e.g., a startup franchisee pays just $195)
- Franchisees get accurate financials, and a tax return— all that’s required of you is invoicing clients, depositing payments, and paying bills
- Bookkeepers have direct access to accounts and reconcile all the expenses — every month franchisees have a reconciled account, using QuickBooks or Quickbooks cloud-based accounting platforms, with an accurate balance sheet and P&L statement
- Xendoo’s tech platform also provides various reporting via mobile app, etc.
Do you need an easier way to track records for your small business? At EmmerScale, we have a strong affiliate relationship with Xendoo. You get a trusted support team of partners — expert advisors, bookkeepers, and CPA’s — dedicated to your business financials, doing your bookkeeping and accounting for you. Together, EmmerScale and Xendoo give you the time you need to grow your business. Contact us to learn more.