Many accountants specialize in knowing the ins and outs of franchise systems, making them able to help franchisees who are generally entrepreneurial and operations-oriented, but who may lack financial skills, keep expenses in order, FranchiseKnowHow.com writes.
"A good accountant," said James Layton, CPA, CFE and director of systems support and development for accounting firm Fiducial, "can provide them with the information necessary to make informed decisions and serve as a trusted advisor on financial matters much like an individual's family doctor ... Our family doctor gathers information, such as blood tests, x-rays, etc. and uses that information to advise us on health matters. The accountant in a similar fashion gathers information, such as reviewing costs of goods sold, ratio analysis, etc. and uses that information to advise the business owner on financial matters."
The accountant-franchisee relationship begins prior to purchasing a unit. A franchise accountant should be a crucial part of any buying decision. Potential franchisees may even find this to be the most crucial part of their interactions with a franchise accountant, according to the Web site. During the research process, an accountant helps franchisees with a number of tasks, including reviewing the Uniform Franchise Offering Circular to analyze the franchise's financial strength, determining the profitability of a unit a particular location and deciding whether or not a franchisor's royalty fees are reasonable.
Additionally, a more experienced accountant can help potential franchisees draw up a business plan that best matches their investment resources and goals, as well as identify potential issues and moderate expectations.
While working with an accountant is especially important during the researching process, franchisees should not end their relationship once the ink dries. Current franchisees rely on accountants to help maintain the overall health of a unit. Unit owners should utilize accountants for advice and help in assessing operations. Every month, accountants can provide financial statements and sit down with an owner to ensure they understand the data and can make reasoned decisions.
Franchisees can help themselves become more savvy in the financial department by signing up for accounting courses, many of which specialize in franchising or are offered by a franchise system. Having a solid understanding and knowledge of financial vocabulary will help franchisees when drawing up expense reports, working with accountants and making decisions regarding the future of the unit.
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