Franchise Accounting Services

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Running a franchise business can be a very attractive option for many entrepreneurs. You don’t have nearly as much risk as starting a new business, you have a done-for-you set of business practices and procedures, and a lot of the “mistake making” has already been done.

There are a few cons though. For example, there’s typically a costly initial franchise fee that you must pay the franchisor, performance obligations, and employee overhead.

You are also still responsible for the day-to-day operations of the business, such as managing employees, handling inventory, sales, and accounting. As your business grows, it’s typically a good idea to begin to outsource tasks like accounting and bookkeeping to a professional.

As a franchise owner, it’s important that the accountant you work with has experience in franchise accounting as it is a bit different than accounting for a typical small business. Franchise accountants know the ins and outs of how a franchise works and the intricacies involved in financial reporting.

There are three critical factors in Franchise Reporting

1. Monthly/Quarterly Report for Franchisor
2. Monthly Analytical report for Franchisee with gross profit analysis, % of expenses to total revenue and compare with Industry Standard.
3. Monthly Financial Statements

Whether you own an individual franchise or multiple locations, we can help. The Firm of Sheldon L. Richards, CPA will generate all necessary reports, assist with budgeting and cash flow, and take care of your monthly bookkeeping. We are also available to assist with payroll services and tax preparation.

Our Franchise Accounting Process

While every franchise is different, we follow a typical process when working with a new franchise accounting client.

1. Set up accounting data file either in QuickBooks or any other software as recommended by the Franchisor
2. Allocate and proper classification of all fixed assets cost, leasehold improvement, landlord allowance towards leasehold improvements.
3. Monthly computation of Franchise fees based on gross revenue/collection.
4. Import sales data from point of sales system to accounting software.
5. Monthly reconciliation of credit card collection per bank deposit vs. credit card batch processing report.
6. Bank and credit card reconciliation
7. Accounts Payable Management
8. Payroll processing with direct deposit to your employee bank account weekly/bi-weekly
9. Payroll tax deposit, preparation, and filing of quarterly and annual payroll tax returns.
10. Inventory Management

Ready to work with an experienced Franchise Accountant? Click below to get started!