Spotting issues early enables action to be taken. This is particularly so when it comes to the financial health of a franchised network. If overspend continues on a monthly basis then this can soon mount up and targets will be missed. And that’s in a good year…
The past 12 months have been the most challenging we have ever faced in the franchise industry on so many levels. Business models have needed to pivot rapidly, marketing and communication has all gone digital and consumer buying habits have suddenly changed. Most of us are working remotely and differently. Therefore, it has never been so relevant for franchisors to be able to identify expenditure and earning within the franchise network to be able to take action where necessary.
Being across the financial health of the network means franchisors can make decisions based on trends and work to steer the business in the right direction. The benefits to the franchisees and the network as a whole can be significant.
As part of the franchise contract, franchisors have the right to franchisees’ financial information. However, obtaining this data in a timely manner can be challenging. One solution is the implementation of a network accountancy tool.
At d&t we developed a network accountancy dashboard tool around five years ago. It helps our franchised networks because franchisees input their financial data directly into the cloud accountancy packages Xero or QuickBooks and then then its fed straight into the dashboard from there. This makes it perfect for the forthcoming ‘making tax digital’ initiative being introduced by HMRC over the next few years. It also means franchisors don’t have to chase for the financial information. It is instantly available to view.
Having these important figures at a franchisor’s fingertips means they know the value of their network. They can identify any supplier overspend and potentially work to negotiate network rates if there are individual supplier contracts in place. They can also spot trends or if something is not quite right by being able to compare between franchisees easily, stepping in to help and support individual franchisees if necessary.
From the franchisees’ perspective, once set up, because inputting the data into the dashboard is how ‘it needs to be done’ there is no friction, stress or delay relating to handing over the relevant information. The dashboard also has a benchmarking capability which anonymously enables franchisees to see high level key performance indicators (KPIs) of other similar sized territories. They can compare and track their performance against others in the network and highlight if their cost of sales are higher than a counterpart for example.
The past year has meant we’ve all needed to change the way we work. Adding a network accountancy dashboard offers an agile, digital, intelligent and cost-effective way to manage the financial health of the network. For franchisees and franchisors, it’s a simple tool that can enable changes to be made before it’s too late, to result in a more profitable outcome at the end of the year.
Our friendly, knowledgeable team of accountants and business advisors at d&t are always available to discuss how digital accounting can help reduce costs and improve network performance. For further information please visit www.team-dt.com
By Dave Galvin, Managing Director, d&t