Franchises are big businesses in Australia that contributed about $181.8 billion to the economy in 2018.
It’s no wonder that the franchise concept attracts first-time business owners since it is akin to buying a ‘business in a box.’ Buying a franchise entails using an already established brand name along with its system, processes, and marketing collateral.
However, running a successful franchisee is not as easy as it sounds to be. It’s vital to seek professional advice and support from the best franchise accounting services, especially for novice entrepreneurs who are taking a plunge with their first franchise venture.
It’s vital to work with your accountant before buying into anything to understand the complicated jargon, fees, and other costs of running a franchise.
Here are five ways how a specialised franchise accountant can come to your rescue to help you get started with your brand new franchise journey:
1. Pre-Purchase Review
If you’re buying a franchise, it’s essential to check the numbers to make sure they stack up before getting into an agreement. If the numbers don’t look like they work, there is little chance that you get started on the right foot. That’s why you need a franchise accountant to help you assess the feasibility of the business opportunity.
2. Understand Your Franchising Agreement
With an eagerness to get started, most first-time franchisee owners fail to understand the complete details of the franchising agreement. However, buying a franchise is a big decision that needs careful consideration of going through the contract’s fine print.
This is where franchise accountants can help you review your agreement to know the complete franchise costs apart from the upfront joining fee.
3. Knowledge of Accounting Regulations
When you buy into a franchise, you concur to run your business according to the specific franchisor rules. Regulations may range from the type of suppliers you can use to disclosing your sales information.
There are also certain procedures for reporting your accounts and specific tax implications for your franchise fees.
Experienced accountants who provide specialised franchise accounting services know the ins and outs of franchising, which will help you comply with your obligations as a franchisee. Otherwise, you could be faced with harsh penalties for late or inaccurate reporting. So it’s worth making sure you stay on top of things.
4. Forecast Cash Flow
Managing the cash flow of your business is vital right at the start of your journey. It’s essential to have a long-term vision with a cash flow projection to know where you can expect money to come in and go out.
This will enable to highlight any shortfalls and develop a plan to bridge any gaps. Availing qualified franchise accounting services can help you prepare these tricky reports, putting all the pieces together.
5. Paperwork and Company Registrations
As a first-time owner, it may be cumbersome to navigate through all the paperwork and relevant registrations to get you started for long-term growth. They can also take care of all the necessary paperwork and company registrations with the Australian Taxation Office and ASIC.
Thinking of Buying a Franchise?
To sum up, there are numerous issues to consider when buying into a franchise operation. There is no substitute for professional-grade legal and taxation advice.
So seek the help of professional franchise accounting services to make an informed business decision.