There are good trends, bad trends and plain ugly trends! I’m not talking about the shoulder-pad fashion faux pas of the eighties here, but financial trends which can be discerned from accounting information.
For franchisors having the figures to hand which show fluctuations in franchisees’ cashflow (good, bad and the ugly), means immediate support can be offered where and when necessary.
The network can benefit too, as franchisors can see quickly which franchisees are performing well in these changed times and they can pass lessons learned on to others. Franchisors can also identify the under-performers and take steps to help before it’s too late.
However, to take swift and appropriate action, most franchisors need more immediate visibility of the numbers. For those still operating an analogue system where franchisees use Excel spreadsheets and pieces of paper, getting a clear handle on the network’s cashflow will always be a struggle. Issues have been compounded during the Pandemic, where furloughed staff have not been available to search for information and chase up accounts.
However, for those franchise organisations that have gone digital and upgraded to a cloud-based accounting solution such as QuickBooks or Xero, a snapshot of franchisees’ accounts can easily be obtained. Consolidated reporting is also a possibility and this can list high-level Key Performance Indicators (KPIs) in order to see which franchisees have the highest turnover, the highest cost of sales or the greatest expenditure for example.
One of the most common questions we have received from franchisors since the start of the Pandemic is how to obtain more financial information on their franchisees so they can assess and help where necessary. Two of our franchise partners have recently added their entire network of franchisees to our in-house developed accounting dashboard which is a free service we provide to partners as we own licences for QuickBooks and Xero. The dashboard enables them to keep a close eye on accounting information rather than need to request it individually. It’s a simple solution which lets the technology take the strain. Access through a secure online portal shows live data, meaning any issues are illustrated straight away and action can be taken.
Being able to track financial trends in this way, can also be helpful for marketing purposes. It’s possible to evaluate the direct impact of a promotional campaign or indeed any other measures implemented which affects the way the network works.
Having a close eye on the numbers can also reveal key milestones with new franchisees, such as the time it takes to reach a certain level of turnover or more generally, how cost savings across the network have impacted on profitability.
Our franchise partners which have used cloud accounting plus our dashboard for some time, have been able to track the impact of the Pandemic overall and see immediately how and when trading has started to turn around. This key data has been important for informed decision making for a number of aspects within the franchise such as deciding when to bring back furloughed staff, deciding how much can be invested in new marketing campaigns, plus evaluating what additional support franchisees need to move forwards.
It’s true, some past fashion fads have been pretty questionable! However, the move towards digital accounting and the use of technology to ensure organisations have access to the financial data they need at the right time, is a good trend and one which should be followed by any forward-thinking franchise. Our friendly, experienced team are always happy to discuss what technology is available and how it can help individuals and franchise networks, so do feel free to contact us.
Now where did I last see those shoulder pads?