The franchisees role in franchise financial and accounting
Financial and Accounting Responsibilities
When investigating the best franchises, be sure you understand the obligations as to these responsibilities.
Proper accounting systems, records and analysis are vital to the success of your franchise. Not only do they help you to secure financing for start-up, they also allow you to monitor your franchise and minimize both business and personal taxes that are payable.
While good software can perform many bookkeeping tasks, and accounting professionals are available to help, the least one should know is how to read and assess a balance sheet, along with income and cash flow statements.
Income statement: This monthly document summarizes your profit or loss based on your expenses and monthly sales.
Cash flow statement: The cash flow statement compares your cash inflow (revenue) to your cash outflow (disbursements), including specifics as to when revenue is collected or expenses paid, and is a reflection of how much money your business has at a particular time and the company's ability to stay in business.
Balance sheet: The balance sheet outlines your assets, liabilities and equity. It's also an indication of how much money you could receive if you were to sell the business and pay your bills.
Managing your business' financial health
Part of your job must be managing your business' financial health which includes bookkeeping, preparing financial reports and managing cash flow.
The onus is on you to determine your obligations
You need to be comfortable with the responsibilities you'll be required to take.
Having a basic understanding of business accounting will most definitely prove to be an important asset in reducing your risk of failure.
Buying a Franchise
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