Franchising is becoming popular by the day. It helps franchisees to start and manage their businesses more effectively than when they would have started without the franchising agreement. One of the most helpful services that franchisees get from their franchisors is accounting direction and assistance. The certified accountants oversee the business’s normal financial operations and provide useful advice reading money operations. If you are considering running a franchise operation, or if your current business is not doing well, you probably need an accountant. The accountant will not be a liability to your firm, but rather, they will be a valuable asset if you choose the most educated accountant.
Here are the leading roles that the accountant will help you in:
Disclosing Financial Statements
Disclosure laws require the offering prospectus to include the franchisors’ financial statements. These financial statements include the balance sheet, an audited profit and loss account, and so on. The disclosure document must include audited statements for the preceding years. The accounting specialists help in preparing these documents and disclosing them to the franchisor when needed. Besides preparing the reports, the accounting experts explain the financial records to the organization’s various stakeholders and clarify the documents’ information.
Preparing tax records
Every state requires the businesses to file their tax returns, and the franchisees are not exempted. The tax statements should be compiled and sent to the relevant authorities on time. Failure to do so can attract many penalties and other financial repercussions. A reliable accountant can prepare those tax records; explain the tax legislation, and find new strategies to reduce tax obligations. All you have to do is find an experienced accountant who understands the various tax laws so that your business can remain tax compliant.
Annual Update and Renewal
The franchisors offering circular must be updated annually. The updates must be error-free and accurate, and that’s why it’s imperative to have an accountant. For timely updates and renewals, the account uses a reminder system to ensure that annual audits are promptly done to avoid delay renewing the franchise registration. The accountant may also assist the franchisor in selecting a time during the year when it will be convenient to make the annual filing.
Fraud Control
Accountants control fraud by checking the ledgers’ information, addressing, eliminating the identified risk, formulating, and implementing processes to monitor and report the threat. All organizations should develop a fraud risk assessment process to mitigate the risk of fraud. Nevertheless, regardless of the internal controls, you have established in your company, your fraud management initiatives’ success largely depends on your corporate culture. Accountants promote the value of healthy, ethical behavior from the top to bottom of the organization and also strictly implement all established anti-fraud policies and procedures.
Error Control
Errors in a company’s accounting records can damage relationships with customers, vendors, and employees and ultimately result in loss of income. It is the role of an accountant through the internal controls to prevent and identify the errors. Automation of processes and controls and proper review levels can prevent errors from entering into the accounting system that could damage a company’s reputation.
Capital Budgeting
Capital budgeting is an accounting principle that the business financial decision-makers use to determine which projects they should pursue. Because the franchise has a limited amount of resources and capital to put forward new projects, they must carefully consider the capital investments a project requires and the amount of value they expect to receive from the project to determine whether it is worth pursuing. It provides a means of evaluating and measuring a project’s cost throughout the life of the project. It is also useful when assessing and ranking the value of projects or investments that require a large capital. A good accountant can help in the capital budgeting evaluation to help you protect your assets.
Cost Control
Cost control is a process in which we focus on controlling the total cost through competitive analysis. It is a practice that works to align the actual value in agreement with the established norms. It ensures that the expenditure incurred on production should not go beyond the predetermined cost. Cost control involves a chain of various activities that starts with preparing the budget in relation to production. A great accountant can help you with the cost control processes in your organization.
The role of an accountant in a franchise operation cannot be underestimated. The expert ensures that you remain tax compliant; you observe your financial obligations, and that’s every financial aspect okay. So, find a reputable accountant expert to hire in your organization today and see a difference in your firm.
