Does My Franchised Business Need a CPA? Here are 4 Signs You’re Ready
With expertise stretching beyond tax matters, CPAs are a valuable resource for franchisees, especially during critical start-up and growth phases. Here are four signs your franchised business is ready for one.
In the midst of running (or launching) your franchised restaurant, retail, service, or related business, it can be tempting to put your business accounting on autopilot. Maybe you’ve set up your business accounting software and engaged a tax professional for your annual review. While both are great practices, they could be falling short if you’re missing a key ingredient: a certified public accountant, or CPA.
With expertise stretching beyond tax matters, a CPA can shoulder some of the critical support your business needs during start-up and growth. Here are four signs it’s time to bring one to your team.
1.) You’re feeling overwhelmed by the start-up process.
Getting into a franchised business can be taxing, especially when it comes to the financial side of things. As a franchisee, if you don’t fully have to time to completely vet or fully understand the financial aspects of the franchise agreement, you could be headed for trouble. An experienced, professional CPA can help. From determining if a franchise represents a viable business opportunity to negotiating the franchise agreement, the right CPA can be a valuable advisor at this critical stage. A CPA, who is well versed in the franchise world, can also connect you to other trusted professionals (e.g., banking, payroll, HR, legal, and administrative experts) to assist in getting your business off the ground.
2.) The manager you hired three weeks ago just found a new job.
Finding and retaining skilled management staff is one of the most difficult challenges of being a franchisee. If you’re falling short in this area, consider consulting with your CPA. In addition to developing compensation and bonus structures that make sense for you and your staff, your CPA can help you craft a strategy for recruiting top talent.
3.) You’re experiencing cash flow and/or time constraints.
While this can be caused by a high staff turnover rate, it can also be the result of an accounting solution that focuses only on your cash accounts. If you’re not also looking at metrics such as your key performance indicators, ratio analysis, and cash flow analysis, you may have a hard time gauging your organization’s strength. And this can be dangerous: without knowing where you are, it’s nearly impossible to get ahead. Bringing a CPA on board not only takes this responsibility off of your plate but also ensures you’re getting the right information.
4.) You plan to grow your business.
If you see big things in your future, consider hiring a CPA to handle both the accounting and bookkeeping for your franchised business. It’s a solution that meshes your day-to-day operations with higher-level business and tax planning—both of which are essential for a growing business. And if you were to seek additional lending, your CPA can help you provide materials such as financial statements, ratios, and performance projections to meet a bank’s requirements.
The right franchisee and CPA partnership can propel your business ahead.
Owning a franchised business can be a fulfilling, invigorating experience—and even more so when your accounting isn’t keeping you up at night. If you’re unsure of the next step, experiencing staff turnover or burnout, or planning for growth, hiring the right CPA advisor and support team could be the ticket to your success.