Consolidated financial statements, reports, and analytics are an important management tools for franchise business owners with multiple locations. To consolidate means to merge a number of items into single, more effective whole. So with consolidated financial reporting, you are combining the financial statements of separate entities or locations to gain an overall view of your enterprise’s financial situation. Recent developments in financial consolidation software enable users to do more than just consolidated financial reporting. Software providers, such as Qvinci, allow multi-location owners to do more with the consolidated financials. Features such as ranking reports, benchmarking, vertical analysis, and email alerts turn modern financial consolidation software platforms into invaluable business management tools.

Why Consolidate?

Consolidated financial reporting is the best way to get the full picture of how all of your businesses are performing, in total. Of course it is necessary to look at the financial reports for individual franchise units to assess their performance on their own, but by comparing the across companies or locations, you‘ll be able to see which of your investments are providing the biggest return. From a management perspective, seeing all independent locations in a single view is helpful in identifying what is working for best performers and using those top performers as a model to make changes to and improve the profitability of lower-performing units. Consolidated financial reporting gives you the opportunity to both get a full financial view of your entire enterprise and gain insights by comparing and analyzing the individual units side-by-side – ensuring continued success and growth across your entire franchise portfolio.

Tips for Consolidated Financial Reporting

To get the ‘big picture’ when it comes to your franchise investments, look to consolidated reporting and financial consolidation software to make understanding, analyzing, and managing your businesses easier. These tips will make the financial consolidation process and more successful.

1.) Automate the Financial Reporting Process

Owners of even one franchise, and their accountants, spend a great deal of time preparing monthly, quarterly, and yearly financial reports – both for their own use and to meet franchise reporting requirements. When there’s more than one location, the burden more than doubles because you have to prepare each location, plus a consolidated view. Doing things manually is time consuming and expensive. Your alternative? Automate with financial consolidation software.

In terms of consolidated financial reporting, you should look to automate the collection and reporting processes. Modern systems can automatically retrieve information from QuickBooks or other accounting software, map information to a Standard Chart of Accounts, and produce standard reports such as a P&L, Balance Sheet, and Statement of Cash Flows. An additional of automation is that it can increase compliance, catch errors early, and reduce the likelihood of fraud. Since you’ll have access to consolidated numbers on a daily basis, you’ll be able to actively monitor and control your franchises’ financials much more effectively.

2.) Coordinate and Collaborate to make the Best Use of the Information

Consolidated financial reporting promotes a high level of collaboration across and within your individual locations. Having an up-to-date overall picture of the company’s financial health along with data regarding how each unit is positively or negatively impacting the whole, management is able foster an environment of sharing, cooperation, and “winning together”. Understanding the relative strengths and weaknesses of each unit encourages the adoption of best practices and allows the business to become more streamlined, by sharing expenses, harnessing group purchasing power, and not repeating the same mistakes.

With consolidated financial reporting, everyone will be on the same page, using the same data, and understanding and interpreting that data in the same way. This level of coordination will ultimately save you time and money, freeing up resources to focus on growth and profitability.

3.) Choose the Right Financial Consolidation Software

While there are several financial consolidation software options on the market, they are not all created equal. You’ll find that the best systems are automated, easy to use, and flexible – with the high quality reporting, error checking, account mapping, and analysis capabilities. Since not all financial consolidation software works in the same way, here are some things you should look for:

  • Room to Grow – Financial consolidation software solutions will vary based on the number of accounting files they can consolidate and how quickly they can complete the consolidation and generate reports. Make sure that your reporting solution can handle your current number of franchise locations and allows room for you to grow in the future.
  • Standard and Custom Reports – Each software solution varies based on the type of financial consolidation summary reports offered. Typical consolidation reports include the Profit & Lost Statement, Balance Sheet, Statement of Cash Flows, Accounts Payable and Accounts Receivable. Franchise financial consolidation reporting software should also provide the user with some sort of graphical dashboard and the ability to drill down to view details. Advanced offerings in the marketplace will let users toggle reports between viewing with native account names or a standardized chart of accounts.
  • Non- Financial Filters – Franchise financial management software should accommodate consolidation and reporting by relevant non-financial properties such as region, population within x miles, years in business, staff size, square footage, services offered, etc. Having the ability to view reports in logical groups allows management to compare, contrast, and otherwise analyze performance between these groups to discover best practices and identify failing strategies.

Consolidated financial reporting is essential to effective franchise management and plays in important role in protecting your franchise investments. For the best results, be sure to choose the right financial consolidation software – one that takes advantage of automation and promotes collaboration.