Franchises are big business. In 2021, franchising is projected to open more than 26,000 locations, add nearly 800,000 new jobs, and contribute $477 billion to the U.S. GDP. Franchises are such a popular business model in fact, that increasingly, multi-unit franchise owners are the norm with 43,212 multi-unit operators controlling more than 223,213 franchised units. That’s a remarkable 54% controlling all of the franchised units in the U.S.. While operating multiple units may be good for business, it certainly complicates franchise accounting.
Finding a franchise accounting application that works on an individual franchise level isn’t difficult, but the parent/child company of a multi-unit franchise operation creates challenges when it comes to accounting and financial reporting. Each franchise operates as a separate business entity. That said, the parent or holding company must produce consolidated financial reports covering all its holdings. In addition, many operating and overhead expenses need to be allocated to the individual franchises. This can be cumbersome and time-consuming to achieve. Many franchise owners also own units that cross borders, creating additional compliance and currency challenges.
Multi-unit franchisees need business management software designed to handle the complexities of managing more than one enterprise. With that in mind, let’s review the top 4 reasons your franchise operation might want to consider a move to Sage Intacct, the ideal cloud ERP solution for multi-entity accounting:
1. Easy consolidation
Sage Intacct makes multi-entity consolidations as simple as the push of a button. This allows you to close your books faster and view interim summary figures at any time. Additionally, every consolidation creates a detailed journal entry report, giving you full auditability and operational transparency.
2. Effective intercompany processing
Sage Intacct was designed to streamline multi-entity franchise accounting. You can create user profiles to restrict user access to the specific entities and transactions relevant to their job. You can share vendor, customer, & item lists and charts of accounts across entities to speed new entity creation and facilitate cross-entity reporting. Streamline your payables function using a central screen, and automatically create due to and due from transactions between entities.
3. Cross-border functionality
Franchise accounting complexities grow when you operate in more than one country, but Sage Intacct is designed to handle them. Everything related to managing multiple currencies is automated to save you time and increase accuracy. Up-to-date exchange rates lead to currency conversions and revaluations that are right on the money. You choose your reporting currency and language. You tailor local account titles to fit local regulations. Plus, you’ll have instant access to currency gains and loss data. You can also produce reports in your headquarters’ currency or the entities’ local currency.
4. Fast, flexible reporting
With Sage Intacct’s consolidation accounting, you can quickly compare performance across each of your franchises. Plus, you can easily switch between consolidated and local views for deep insight, or to share location-specific data with local management.
Sage Intacct is head and shoulders above the competition when it comes to multi-entity franchise accounting. This makes it an ideal solution for busy franchise operations. Whether your franchises are in the automotive, food service, health and fitness – or even the budding cannabis industry, you’ll be steps ahead by selecting a purpose-built tool that keeps you working on the business – instead of just in the business.