FRANCHISE ACCOUNTING
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The Basics Of Franchise Accounting
You own a franchise. You have decided to be your own boss without the risk of starting a brand new company. You are on your own, but you have a safety net of a franchise. Like in a “regular” business, you have to take on responsibilities, you run day-to-day operations. You also have to do some basic accounting. Though franchise accounting is similar to accounting for other types of businesses, it includes a few extra steps.
To own a franchise, the franchisee (you) will pay the franchisor certain fees. By paying the fess, you get the benefits of the established business’s brand, products, and services. The franchisee usually pays an initial fee, which is like an admission charge to the franchise. To keep the franchise, the franchisee pays an ongoing royalty fee. Sometimes, the franchisee pays additional fees like marketing fees.
Accounting For Franchises: Tips To Keep Your Books In Order
If you have decided to start a franchise or licensed business, there are additioanl requirements to adhere to as a business owner. Royalties are generally due monthly and are frequently based on sales. Some franchises require additional reporting of financial reports. You may also need a loan or a line of credit. All of these require accurate, consistent and timely financial statements.
Using a firm with franchise accounting experience allows you to focus on building and growing your business. Accounting & Business Partners LLC maintains the financial records, manages payroll and optimizes your tax strategy while meeting compliance requirements of the Franchisor.
Franchise Financial Success Basics:
- Know your franchisee requirements for reporting and paying royalties
- Contract with a bookkeeping, payroll and tax service provider
- Set up financial software and connect to the POS system
- Set up time keeping for your employees
- Keep receipts for all expenses and submit to your accounting team
- Properly onboard your new employees for payroll
- Calculate your overhead and breakeven
- Create daily and monthly sales goals
- Calculate and manage cost of sales of goods
- Audit for loss of goods regularly
- Know your state and federal compliance requirements
- Know your license requirements for permits
- Review your financial statements every month with your accounting team
Accounting & Business Partners LLC manages your tax, bookkeeping and payroll with a strategy to optimize your tax
position while maintaining compliance requirements.
position while maintaining compliance requirements.
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10730 102nd Avenue North, Seminole, FL 33778
P: (727) 828 9945
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