So, who’s been naughty or nice to their accountant this year?
So, who’s been naughty or nice to their accountant this year? As an accountancy firm, the one thing that makes our team at d&t literally ‘cry or pout’, is where franchisees or franchise networks are not up to date with their bookkeeping! It causes a whole host of problems which if not addressed by the end of the year or end of the quarter, means you won’t be compliant with Making Tax Digital (MTD). These are HMRC’s new rules aimed at bringing the tax system into the digital age. Non-compliance could result in some pretty serious repercussions and we’re not just talking about missing the Secret Santa!
From a franchisor’s point of view, if franchisees are not keeping up with their accounts, they have no visibility on overall business performance. It’s limiting an effective tool, as well frustrating your franchisor by not supplying timely and accurate data which they can use to benchmark the network. If only a couple of franchisees don’t update them on a weekly or even monthly basis, it means that the franchisor is unable to compare like for like figures.
Best practice is to keep up with bookkeeping every week. We find it is often the creative, focussed business managers who are brilliant at their day job, are sometimes the ones who let the admin relating to the financial side of the business slip. The good news is that now with cloud accounting software like ‘QuickBooks Online’ or ‘Xero’ which link to your bank feed, you can reconcile invoices, check transactions and stay up-to-date in seconds.
For organisations with a high number of transactions such as retail stores or man-in-a-van franchises where the franchisee is out on the road, it may be more difficult to keep up. Larger businesses tend to hire an employee for bookkeeping and to reconcile invoices. However, outsourcing can be a cheaper alternative. For example at d&t we offer a bookkeeping service for clients for just £25/h. This helps businesses stay current, while they concentrate on the day-to-day work.
For franchises with a reasonable number of transactions, franchises do need to get to know QuickBooks Online or Xero. These applications have their own support teams available 24/7 and do demos and webinars regularly so if you don’t know how to use these systems already, it’s worth making a New Year’s resolution now to learn! It will save you hours of admin time and ensure your bookkeeping is always up-to-date.
For our clients at d&t we also do remote training on these applications to make sure franchisees know how to link bank feeds, raise invoices, do reconciliation and create a P&L. In addition, we have FAQ documents available as part of ongoing client support packages.
With MTD coming into play in April 2020 for all organisations (up until now it’s only been relevant for those turning over more than £85k/year), your franchisor and accountant will be making a list and checking it twice, to see who’s been naughty or nice to their accountant! So, be good for goodness sake and get those finances wrapped up well in time for Christmas!