Retail Accounting

Retail Accounting news – brought to you by CounterBooks – www.counterbooks.com


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Migrating To The Cloud Isn’t As Complicated As You Think

cloud migrationThe cloud is growing in popularity but CIOs still have a number of concerns regarding system migration. A recent survey showed 56% felt that the migration process would be too complex and 81% were concerned about security. Many fear that moving to the cloud could cost into the millions, that the risks are too high and that the process is too time consuming. However, whilst justified, these fears are not reflective of the true picture.

In fact, the cloud brings numerous benefits to the company as a whole, the most notable being cost savings. For example CounterBooks’ cloud-based system automates 80-90% of the accounting process saving companies thousands. This automation also increases accuracy, thereby improving overall performance.

Data from traditional systems is easily migrated to the cloud and does not consume vast amounts of time or money. It’s also highly secure, for example with CounterBooks all data is encrypted, fully backed up and stored in servers with 24/7 maintenance.

Furthermore, the cloud provides an excellent platform to suit the growing trend of on-the-go flexible working, providing staff with the information they need whenever and wherever they need it.

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Top 10 retail franchise accounting best practices

  1. Retail Franchise Accounting Best PracticeCloud based system – a cloud deployment reduces the total cost of ownership, lowers upfront costs, and provides a scalable and rapid deployment platform. Furthermore, it provides secure and instant access to data from any internet enabled device by franchisees, their accountants, territory/area managers and head office.
  2. A retail specific system – the system should be designed for purpose, the functionality and features should be focused on solving the unique challenges of retail franchise networks.
  3. Standardised and consistent reporting – all franchisees should utilise a standardised Chart of Accounts to ensure consistent reporting in order to facilitate benchmarking and data analysis across the retail franchise network.
  4. Special purpose vehicle for the franchise operation – to gain insight and transparency of the franchisee’s profitability and financial stability, the franchisee should operate the “franchise” business from a new legal entity.
  5. Monthly reporting – quarterly or annual reporting is insufficient to provide adequate support to franchisees. Therefore franchisees should prepare trading accounts, P&L and balance sheets on a monthly basis in a common format as prescribed by the retail franchisor.
  6. Budgeting – budgeting is critical for franchisee performance management, franchisee accountability, supply chain planning and corporate forecasting. They should be prepared by the franchisee / franchisor upon conception and annually thereafter.
  7. Automation of the accounting process – the accounting process should be highly automated including EPOS, BOS, inter-franchise, inter-company, supplier and payroll transactions, this reduces the costs/time for the franchisee, increases the accuracy of data, and reduces the time lag for month end reporting.
  8. Emphasis on the balance sheet – retail franchisors should ensure they investigate the balance sheet for anomalies such as material amounts within the following accounts: trade debtor, prepayments, accruals, and sundry creditors.
  9. Single centralised database – all franchisee accounting data is entered directly within a central data repository which is immediately available to the franchisor. This reduces the time lag between reports being submitted, need for the data to be re-entered into another database which is predisposed to re-errors, and finally if adjustments be required – it avoids having the accounts resubmitted as the revised accounts are instantly available.
  10. Key Performance Indicators – retail franchisors should monitor indicators such as franchisee remuneration, gross margins, overheads, profitability, net worth and liquidity – including actual, variance and budget.


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Retail multi-site compliance & control

d&t and CounterBooks provide retail networks with a complete accounting and online system service.

Multi-site retailers are set to benefit from a recent affiliation between two established market leaders, CounterBooks and d&t Chartered Accountants. Providing a tailored retail accounting service and online system for each site within a network allows the head office to benchmark to better assign support to those who are underperforming against the network averages.

By putting all sites in a network on the same system ensures compliance whilst reduces the costs associated with the system, training and support. Examples of brands who have already benefited from CounterBooks include; the Post Office, Esso, BP, Shell, Esquires Coffee Houses and Scottish & Newcastle. d&t have been appointed as the network accountants by over 75 UK franchisors, with brands including; Café2U, MacTools, Snack in the Box and Dyno (Dyno-Rod).

Carl Reader, director at d&t commented, “We have created a modular approach that allows each network to have the right package of accounting and bookkeeping services for their franchisees or outlets. The services are bundled into a fixed monthly fee with a 100% satisfaction money back guarantee.”

The transition of a retail multi-site or franchise network to a shared system for both their accounting and bookkeeping can take a mix of time and careful presentation. Because the business models are already templated it makes perfect sense for all the systems to be shared by the network as well. Integrating new sites is the most simple as they can be setup with the network approved system. Established sites with a mix of providers and systems often need more convincing of the benefits, although this is an area the teams are used to dealing with and they find education and demonstration to the be the best solution.

“Both organisations have worked informally together for years so it made complete sense to work more closely and provide a joined up accounting and systems solution for multi-site retailers and franchise networks,” commented Alex King CounterBooks Commercial Director.

 

Infographic: It’s an SaaS world

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Cloud-Computing-SaaS-Infographic


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Lessons from a seasoned franchisor – build your franchise on solid technological foundations

Franchise FoundationsTime and time again, I speak with soon-to-be franchisors in the early stages of setting up and not investing in the right technology. In the mid 2000s, with the help of a great team, we built a franchise network from conception to national brand within 4 years, we introduced many initiatives and the toughest ones, without a doubt, were IT projects.

It is absolute critical from the outset to have a robust and scalable technology platform prior to recruiting franchisees. Maybe 10 years ago, franchisors could argue that the costs involved in IT projects were prohibitive, however with the availability of cloud deployed technology – there is no excuse. Cloud deployed software is highly scalable due to the pay-as-you-go subscription model (typically per user or per company) and requires minimal capex/upfront investment.

In my humble opinion, executives very often get caught up in the more exciting aspects of franchising, recruitment, marketing and attending franchisees launches. Those of you which have written a full Request for Proposal (RFP), can probably relate, it is a horrendous task.

However it can have profound implications on the franchise system if the appropriate systems and processes are not in place from conception.

Here are some reasons why, now is better than tomorrow (or even three to five years time) to introduce the right systems:-

1.    Changing later is a pain

Every time a franchisor recruits a franchisee without the right systems, they are compounding the complications which lay ahead. People rarely like change, and introducing a new IT system even less. Newly launched franchisees should be focused on building their business, not have their time and attention being diverted for the launch of a new IT system – this can have repercussions which can lead to conflict and difficulties early on within the honeymoon period of the franchise relationship.

A new IT project will present the franchisee with additional costs. They might be at the early stages of their growth and might not yet see or understand the logic for the project as they are yet to experience the “challenge” the new system intends to solve – therefore making it more challenging to introduce the system.

Introducing new systems in a wholly owned company can be awkward, when introducing a new system in a franchise network, it presents an additional layer of complexity. You will need to engage with the franchise network, explain the issues, consult with the network as a whole (and/or the franchise council), draft a specification, engage again with the franchise network for user acceptance testing, arrange training, and ensure effective roll out. All of which can be avoided.

So all in, it costs more, consumes time from the franchisee and franchisor and can be a challenge which will involve project management and change management skills.

 2.    Helps control and manage innovation in the early stages of growth

Many IT projects are reactive, they are intended to solve a problem which has already presented itself and the business has “felt the pain”. For example, if there is an increase in the franchisee failure rate, this is because the franchisor has an inadequate management information system to effectively monitor franchise performance.

With hindsight, had the franchisor introduced a cloud based “Management Information System” at the early stages of growth, they would have potentially avoided the failure of those franchisees, whilst having the opportunity to monitor franchisees through this critical growth stage to refine the model and provide better support.

 3.    Provides competitive advantage

Having technological competencies can deliver dual competitive advantage. A highly automated accounting back office can deliver competitive advantages through reduced costs and time, therefore allowing the franchisee to focus on delivering a better service and invest in the business. This competitive advantage provides the franchisor with an improved customer experience which can attract talented franchisees.

So prior to developing a franchise channel, a franchisor should give consideration to the three points below:-

  1. Are all systems suitable for franchisees?
  2. What other systems will be required to support the franchise management team and the franchisees?
  3. Can the systems scale in line with your growth objectives?


We would love for you to share some of your experiences, good and bad.


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The benefits of the Cloud to Retail Franchises

cloud benefits

The cloud is a delivery model in which software and the associated data are hosted centrally on the internet. An increasing number of retail franchises are making the move to the cloud but why? What are the benefits?

There are numerous benefits to retail franchises in using the cloud. These include:

  1. It’s accessible anytime, anywhere. As it’s an online system, retail franchises can access the system at anytime via a mobile phone, tablet or laptop.
  2. There is no need for hardware as the cloud is online.  This means that hardware costs will be zero.
  3. It’s scalable. New users can easily be added to the system and it can be scaled up or down according to the franchises needs.
  4. Updates. The franchisee and franchisor will always have access to the latest version of the system as all updated are carried out by the host server.

The cloud can be used in many ways including customer relationship management (CRM), Back of Office (BOS), inventory or stock management as well as accounting.

Doing accounting in the cloud can be very beneficial to retail franchises and here’s why:

  1. Gives access to real time data. Accounting in the cloud means that the franchisor or franchisee can access financial information immediately which is really helpful in the managing of both the network and the retail store.
  2. Manage risk. Having a full set of financial reports online means that franchisors can have an overview of the financial standing of stores within the network. This means that franchisors can easily identify if any franchisees are struggling and put measures in place to help them.
  3. Drive Performance. It allows for extensive reports to be available to head office including historical/budget/actual variance reports. This means that the franchisor can have a better view of the business and therefore drive it forward.
  4. Comparative. Using one system in the cloud means that comparative reporting can take place; this can then be used for benchmarking within the franchise.

 

Are you using the cloud for accounting? What would you say the benefits are?