Accurate and comprehensive financial reporting is key for any franchise’s success. Without a certain standard of reporting in place, all marketing, territory expansion, and product development is reduced to guesswork. On the other hand, maintaining detailed financial metrics gives you the data needed to cut wastage and optimize sales, marketing, and product or service development.
Today’s post outlines 6 tips for better franchise financial reports, with particular focus on how FranchiseSoft financial reporting software for franchises can help.
1. Factor in everything that matters.
One of the most egregious mistakes one can make with reporting is to omit vital data. Your franchise’s financial reports should include:
- Balance sheets. Profit and Loss (P&L) statements are important, but they won’t tell the whole story in the event of a cash flow crisis. Balance sheets help you understand the entire picture, detailing your franchise’s net worth, liquidity, and liabilities. Managing the balance sheet is especially important for franchisees and franchisors looking to grow their businesses.
- Income statements. Income statements detail sales, gross margin returns, franchisee salary figures, marketing investments, financial management, and overall profitability given the level of assets involved in the company.
- Cash flow statements. This statement shows how changes in your balance accounts and income have affected cash and “cash equivalents,” then breaks the analysis into operating, investing, and financing activities.
- Analyses. Obviously, the most important part of your franchise’s financial reports will be the analyses, which helps us understand balance sheet dynamics, and specify assets used to generate profit, including fixed assets and working capital. For best results, your analyses should integrate metrics from your point of sale systems, rosters, inventory lists, budgets, and other business books into a single report.
FranchiseSoft makes this tricky data integration easy by consolidating key metrics into simple reports, accessible through simple dashboards on any mobile device. Moreover, we automate much of the busywork, with the option to upload invoice data straight into your business books.
2. Make time for reporting.
This point may seem obvious, but failing to make time for comprehensive financial reporting is a recurring mistake in the franchise world. Business owners sometimes feel that spending time on finances takes away from more valuable business activities – nobody wants to waste time counting their money when they could be out making more, after all.
But reporting is crucial, with the quality of financial data often being the difference between knowing whether your company is facing a challenge or an opportunity.
Of course, we cannot create more time out of thin air. Eliminating wastage and redundancy is better, which is exactly what FranchiseSoft was built to do. Informed by years of franchise ownership, our financial reporting software automates everything it can, and optimizes everything it can’t, thereby speeding up the reporting process.
3. Familiarize yourself with key business drivers.
You could have the best financial reporting software for franchises ever developed, but it wouldn’t matter if you don’t understand key business drivers. This is a major problem, especially for the “cruise control” franchise owner crowd – they pay for great reporting, but haven’t the foggiest idea what half of those stats mean.
FranchiseSoft’s support service can help you understand reports in detail, identifying key performance metrics and explaining what they mean for your company. If you don’t have access to FranchiseSoft support, you should ask your accountant or business advisor to walk you through all the numbers at the very least.
4. Develop benchmarks that matter to you.
Every industry, business owner, and brand vision is different, which means no two people’s goals will be identical. Knowing that, why would you plan your company’s unique development using somebody else’s benchmarks?
When shopping around for financial reporting software for franchises, be sure that your chosen system is fully customizable. FranchiseSoft lets you tailor your entire software experience. Arrange the dashboards any way you like, and develop financial reports that focus on what matters most to your business.
Want to learn more about FranchiseSoft? Request a free demo.
Our financial reporting software for franchises was made by and for franchisors and franchisees. Learn more at http://www.franchisesoft.com.