Why Outsource your Franchise Bookkeeping?

Many franchisees outsource bookkeeping to professionals familiar with the franchise model to ensure accuracy, compliance and efficiency. A specialized bookkeeping service like BookWerks^TM can help navigate franchisor requirements and state regulations while providing financial insights to grow your business.

Professional franchise bookkeeping can improve your accuracy, which will ensure compliance with franchisor standards and royalty requirements. With timely financial reports such as

• Profit and Loss Statements,
• Balance Statements and
• Cash Flow Statements,

you get insights into your profitability, cost control and growth opportunities. You can see at a glance, for example, which products or services are most profitable, or which days/times are best for the business, and make decisions accordingly.

What are the bookkeeping requirements of a franchise?

Bookkeeping for franchises involves managing the financial records of businesses operating under a franchise model, which has unique requirements due to the relationship between the franchisee (business owner) and the franchisor (parent company). Accurate bookkeeping ensures franchisees meet their financial obligations, maintain regulatory compliance and maximize profitability.

The special challenges of franchise bookkeeping

1. Compliance with franchise agreements:
   • Franchisees must adhere to financial reporting and operational guidelines set by the franchisor.
2. Multi-location management:
   • For franchisees with multiple locations, bookkeeping must track income and expenses for each unit separately.
3. Standardized reporting:
   • Franchisors often require standardized financial reports to monitor the performance of franchisees.
4. Inventory and vendor relations:
   • Tracking inventory purchases from approved vendors.
   • Ensuring compliance with franchisor-mandated procurement practices.

The BookWerks^TM approach

We specialize in franchise and small business bookkeeping. Our professional bookkeeping services for franchises include:

Royalty and Fee Tracking:

Recording recurring franchise fees, such as:

• Royalties: Typically a percentage of revenue
• Advertising Fees: Contributions to national or regional marketing campaigns
• Initial Franchise Fee: A one-time payment to the franchisor

Revenue Management:

• Tracking income streams from products or services
• Ensuring proper categorization of revenue by location or service type (if applicable).

3. Expense Management:

• Recording operational expenses such as rent, utilities, payroll and supplies.
• Separating franchise-specific expenses like mandatory vendor purchases or required training.

4. Accounts Payable and Receivable:

• Recording payments for inventory, equipment and vendor services.

5. Financial Reporting:

• Preparing detailed financial statements (profit and loss, cash flow and balance sheets).
• Reporting financial data to the franchisor as required by the franchise agreement.

7. Royalty Payment Automation:

• Automating royalty calculations using accounting or point-of-sale (POS) software to reduce errors.

8. Franchise-Specific Software Integration:

• Utilizing franchisor-recommended or required software for consistency in reporting.
• Integrating bookkeeping systems with POS systems for real-time data tracking.

The benefits of outsourcing your bookkeeping

Streamlining your bookkeeping by using an outside service skilled in franchise bookkeeping saves time better spent on operations. Financial records are kept securely away from prying eyes. And you can rest assured your transactions are recorded promptly and accurately.

Because we use cloud-based accounting software, your records are visible anywhere, anytime to authorized users.

With a professional bookkeeping company, you don’t need to worry about your in-house bookkeeper going on vacation or needing to take leave to care for a loved one experiencing a health challenge. Your dedicated BookWerks^TM bookkeeper can easily hand off your account to another franchise expert if they must be out for a period of time.

Increase your chance of success with a pro franchise bookkeeping partner

Staying on top of where you stand financially can make all the difference in franchise success. Give yourself every chance of doing well. Look for a virtual bookkeeping service like Cincinnati-based BookWerks^TM, or one in your area skilled in franchise financial recordkeeping.