2020 was a rollercoaster for most business and franchise owners trying to make a living.
While the drought, fires, floods, and now COVID-19 affected individuals and communities across the country, the financial impact will be felt for years to come.
Most would view economies as a geographical area of businesses within communities, a franchise group is considered an individual economy in its own right.
You could consider the success of an economy by combining the demand of Gross Domestic Products, or Services, (GDP) and profit. But this is rarely met due to the curveballs life throws at us.
Franchise and accounting
It is a fact that even though the balance sheet of the company and your income statement should describe the company accurately, it is rarely used as a monthly tool for business management in small companies.
In my opinion, the system itself has created so many strict rules that at some point, it started to drift away in the wrong direction. The accountant, instead of being the source of information to the business manager, began as a tool for the tax office only.
So how do we overcome this? How do we predict and secure future growth and success when many barriers prevent a business from being easy?
Know where you are
Understanding where your business sits at any given point allows for better management, crucial decision-making and potential pivoting. How do we do this? Setting Key Performance Indicators (KPIs) should be monitored frequently enough so you can avoid business downturns.
Let’s consider franchise groups. Individually a business owner should recognise each component of their business by automating the review of their own individual KPIs.
Having knowledge of a business’ receivables allows an owner to see what potential changes to the collection process has on the company. Considering a shorter time to collect debtors has a positive impact on cash flow. In contrast, a more significant time indicates that it will take longer to collect its accounts receivable.
Now let’s take this same example and put it in the eyes of a master franchise, or an area manager. You now have more eyes, support, management to make business areas better and faster. Couple this with KPIs monitoring all financials and business teams, systems, sales processes, and potential risks. You now have a proactive approach to building and sustainable businesses with each entity flourishing at its best.
Running a business is stressful at the best of times, sales, providing services/products, team management – bookkeeping? So while it sounds great, providing and monitoring information, starts to sound like a full-time job for both the franchisee and the franchisor.
Automation by design
When you automate the extraction, transform and load (ETL) process of business management data, you can streamline all businesses through one platform.
Optimising your working capital during this time is imperative. It is also essential to maintain positive ongoing business relationships with existing suppliers, service providers, and your staff.
Now, suppose this could all be done through automation, with very little input from the franchisee’s perspective. In that case, both franchisee and franchisor can increase the performance of both entities and a network collectively.
Benefits for the franchisee (sole location/entity):
• Be kept up-to-date on their metrics;
• Receive regular performance reports
• Understand how their performance compares against other businesses within the same network;
• Quickly identify areas of business needing improvement and attention.
Benefits for the franchisor (head office/master franchise):
• Benchmark financial and non-financial metrics;
• Visually rank, compare and benchmark all franchisees;
• Identify key areas of concern, preventing individual company/entity failure;
• Deliver insight and value to franchisees;
• Better support/management catered towards individual franchisee needs.
Having the right business intelligence does not have to be both a timely or costly addition to a business. On the contrary, with the right tools, it will increase productivity, by as much as 90%. It can decrease overheads and expenses, and protects the foundation of a business for growth, sustainability, and success.
The AVA solution
Using AVA, accountants and franchisors can instantly diagnose which companies need help, offer a proactive service to advise them, increase client survival and retention. Businesses with multiple clients or locations also reduce both time and costs by automating the financial review process.
AVA also considers the view of the business’ performance from the business owner’s perspective at the request of the advisor/accountant. Thus, allowing for a more tailored approach for success. This is broken into sales, team, financials, systems, risks, and general management.
For more information, visit www.ava-systems.com or contact us at email@example.com.
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