Headaches in Franchise Accounting

Posted by Cedric Joshua Martinez
Oct 06, 2016
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Franchise accounting has its fair share of issues that are unavoidable in your accountant’s daily routine. But knowing the hurdles that they need to overcome as a franchise accountant gives them an advantage, a means to prepare a solution - and you, as their employer, a way to help them improve their work efficiency and time management. 


Below is a list of challenges that franchise accountants have to go through, so you can be aware of them and be prepared for each encounter.

Proper training

Having an inexperienced accountant handle issues of this nature can go both ways - either he completely messes up or somehow manages to get things right. Still, why leave your franchise, and millions of dollars in investment and profit, to chance? Your accountants have to undergo proper training in preparation for any complex problems that may arise.


From late payments to overpayments, there are many possible problems that may arise if you don’t take a closer look at the process. This problem multiplies with franchises as you not only have to deal with a larger employee population, but also the physical distance between your branches when or if you expand to multiple locations. There can be mountains of seemingly insurmountable paperwork as more elements come into play.

Download our whitepaper to learn more about Australian payroll.

See this as an opportunity to better your chances of avoiding payroll problems and minimise the damage when they do occur. Examine the current state of your franchise and try to find any weak points in your payroll process.

Buying and Selling

On both ends of the deal, accountants have something to worry about. Franchises will cost you a pretty penny and should be carefully considered before making any final purchase decisions, no matter how sure you may initially be. After purchasing, there are still future costs you need to worry about, such as for ongoing maintenance or planned expansions.

On the other side of the coin, once you feel that you’re ready to leave the franchise business for good and have no plans of passing it down, you might consider selling. Another obstacle presents itself in the form of pre-purchase reviews, where a third party highlights the good and bad of your franchise. This heavily affects your chances of getting the deal that you want.

Franchise Fees and Other Financial Troubles

Franchises, like any other kind of business, don’t always go as well as planned. While prevention is better than the solution, problems will pop up eventually. In cases like these, make sure to address the problem as soon as you have caught sight of it.

One financial problem would be franchise revenue recognition. With so many laws and details surrounding franchising, it is difficult to distinguish your income. Even large companies such as Enron and Cendant have admitted to misstating their income and being unable to properly recognise and classify the revenue they receive. Some of those that commit this mistake are fined, while others are put behind bars for months, even years.


With so many problems, it is never a bad idea to seek expert advice. While problems are inevitable, you can reduce their frequency and severity by learning more about your trade and having sufficient preparation for any problem. You should look for experts who have not just studied the lessons of accounting, but also possess first-hand experience in dealing with these issues.

Need help with your franchise accounting or something specific? We’d be happy to help with any of the accounting, bookkeeping, and even payroll needs of your franchise business. Schedule a free consultation with us today.





Our Outsourcing: How to Make it Work guide explores how you can utilize accounting and finance outsourcing to drive growth to your business and add value to your processes.