Moving to the cloud can help your franchise feel more grounded than ever

Brand equity, a proven business model, and a dependable supply chain are all lucrative benefits of the franchise business model. But by no means does any of that guarantee operating a franchise or franchise network will be smooth sailing. As you know, it can be costly, complex, and time-consuming work that forces you to wear many hats and manage several competing priorities at once.

One area where many franchisees often struggle is keeping accurate, timely, and up to date financial records. The reasons are plentiful and at times administration heavy:

• Payroll complexity: Franchises tend to employ a higher than average number of part time, casual, and independent contract workers which can make it difficult to capture and issue compensation.
• Patchwork systems: Franchises tend to work with a broad range of systems for sales, inventory, accounts payable / receivable, human resources management, bookkeeping and other business processes. Some are mandated by the franchisor, others are selected by the franchisee, and few integrate well enough to deliver credible business insights.
• Manual processes and lack of formal training: Team members and shift supervisors are often responsible for cashing out, recording sales figures, tracking financials, tracking time, and transferring data to a master spreadsheet. Not only do these manual processes increase the likelihood of transposition errors, but also errors resulting from a lack of finance knowledge and experience.
• No in-house finance team: Franchise owners can rarely afford a full-time bookkeeper or accountant to generate timely financial insights to support strategic decision making. Instead, these tasks are generally reserved for key reporting periods such as month, quarter, and year end reporting and compliance. This can make it difficult to pivot quickly or take advantage of emergent opportunities.
• Unique financial requirements: Franchise fees can be costly and often require comprehensive reporting. Moreover, franchisees often have complex tax and cost structures that can be difficult to navigate.

As a result, it’s likely you spend more time than you’d like managing your books and less time planning, leading, and growing your franchise. But it doesn’t have to be that way. The latest generation of cloud accounting and bookkeeping tools can help transform not only how you manage your finances but your entire business. Here’s how.

Real time access when you need it, wherever you are

Unlike yesterday’s locally hosted bookkeeping software, today’s modern cloud stacks deliver integrated and real time information across your franchise system(s). Whether you’re on the floor, on a call, or on route to your next meeting you’re always plugged into the heartbeat of your business with whatever device you have at hand.

Direct integrations with your other business enablement tools (e.g. accounts payable, financial planning and analysis, electronic timesheets, point of sale, etc.) ensure you get a more complete picture of what’s happening at every level of every franchise location you own. Not only does this untether you from your desk — it also cuts your data entry time by up to 80 percent and allows you to be nimbler, more decisive, and more confident in the numbers.

Make better decisions and predictions

Not surprisingly, this level of insight can also help you make better decisions and far more accurate predictions and forecasts. If 2020 taught us anything, it’s that your business can change at the drop of a hat — both for better and worse. You can’t afford to wait for quarterly, monthly, or even daily reports to decide what to do next. You need to be ready to react quickly and correctly to whatever obstacle or opportunity that comes your way.

Modern, cloud-based systems can offer comprehensive insight into key metrics like cashflow, labour costs, operating expenses, and more. If used correctly, it allows you to rapidly generate reports and run simulations at the click of a button so you can adjust your supply chain, increase or decrease staffing, and shift priorities as the circumstances dictate. The result is a better understanding of all the possible roads ahead and greater confidence that you’re on the right track.

Improve your security and increase your peace of mind

The pandemic also reminded us cybercriminals are always looking for an angle. We live in an era of increasing and increasingly sophisticated cyber crime and the number of attempted and successful breaches predictably spiked right around the peak of confusion around COVID-19. But it’s not just that breaches are getting more frequent and more costly, it’s who they’re targeting that should be most concerning.

Whether you’re an established franchisor or new franchisee, hacks and social engineering breaches are focusing on businesses like yours — which have neither the capital nor the manpower to invest in mitigating their risk, store most of their most valuable and essential business information on local hard drives or networks, and need that information to operate.

Cloud based solutions help protect your financial information in two important ways:

• Moving you away from a single point of failure: If you’re breached, cyber criminals may use the opportunity to steal login information, gain access to business accounts, or install ransomware to deny access to your systems. Your choices are to either pay the ransom (which doesn’t guarantee a positive result) or paying a breach response team to restore your operations.
  
  Transitioning to the cloud ensures a breach will not provide a direct pipeline to your financial information and cannot interrupt your normal accounting and bookkeeping processes. You may have to switch to a non-infected device, but you can largely carry on as usual.

• Industry leading cybersecurity: Cloud service providers have collectively invested billions into reducing both the likelihood of a breach and the potential damage to customers if a breach occurs on their end. Their economies of scale simply provide levels of protection that wouldn’t be feasible or affordable for the average franchisee. They are also legally required to report a breach and reimburse you appropriately if your information is compromised.

Get the latest tools and functions as they become available

Another major drawback of locally hosted software has historically been the cost to upgrade. The price of the software itself is one thing to consider, but also the time required to install and tailor the solution to your business — as well as to import and review your historical information for accuracy. The decision to upgrade is not always a simple one; you’d need to balance the financial consideration against the benefits of the new features and functions.

The cloud largely eliminates those trade-offs. Instead of a significant up-front expense, you get a far more affordable subscription-based service that saves time, preserves the integrity of your data, and guarantees you’re always working with the most up-to-date version. You get instant access to the latest tools and integrations to support your business as soon as they become available. No matter what device you and or your team members are using, you can always trust everyone is up to date and on the same page. 

Seamlessly evolve your technology as you evolve your business

Of course, it’s one thing to understand the benefits of moving to the cloud; quite another to find the right solution(s) for your franchise and then make the transition. Thankfully, you don’t have to do it alone.

Working with an advisor who specializes in digital transformations can provide needed guidance to help automate processes, integrate platforms, improve revenue generation and operations. Outsourcing important specialist functions is also more cost effective and convenient than ever — both to relieve their administrative overhead and uncover hidden operational and financial insights. 

When choosing the right transformation or outsourcing partner, make sure they’ve done the legwork of vetting the vendors currently in your market and can make a clear business case for the ones that can deliver most functional, user-friendly, and fully integrated solutions. A strong partner should understand the unique characteristics of the franchise sector and be able to explain how and why their recommendations will help sustain and grow your operations.

Following is our approach at MNP:

• Determine your business needs: Initial conversations help us understand where your processes and platforms are today and where you want to be in the future. We work to get on the same page with you and establish a common language and action plan.
• Deliver on the action plan through technology enabled modernization: This could include anything from setting up a cloud General Ledger (GL), to standardizing reporting or putting a fully outsourced accounting and/or IT outsourced service in place
• Build to your specifications: The right solution should accommodate where your business is today and be able to evolve with where you plan to be in the years to come.
• End-to-end insight and advice: Cloud and outsourcing solutions don’t end when the technology is up and running. We offer a full-service solution that focuses on executing core functions exceptionally so you can focus on driving the business, growing top line revenue, or improving operations.

More time for what matters most

Whatever industry you’re in, and whatever franchise(s) you own, you surely didn’t get into business to chase a pile of paperwork. Modernizing your applications can simplify your finances and help you spend less time in the office and more time with your customers and employees. Better yet, many of today’s software as a service (SaaS) offerings often come with advisory services built in — and that extra support can go a long way in helping your franchise reach its full potential.

Additional benefits of cloud-based finance and operational solutions include reduced costs, improved controls, and increased line of sight on emerging obstacles and opportunities. The availability of these tools whenever, wherever, and on whatever device you need them allows you to be where you need to be for your business while offering peace of mind that your technology stack is leading edge and financials are accurate and automated.

To learn more about how MNP can help your franchise capitalize on the benefits of today’s leading cloud platforms, contact Dan Caringi, Partner and Business Advisor, at 647.475.4534 or [email protected].