While advancements in technology and accounting software has made it easier for businesses to perform bookkeeping and accounting, many continue to make accounting mistakes that hurt their finances. There are several reasons for the mistakes and errors in accounting and bookkeeping. These include lack of timely reconciliations, errors in data entry, lack of documentation procedures, procrastination, and not seeking professional outside help.
Two processes that can help you in avoiding or limiting the errors and mistakes in accounting and bookkeeping for your franchise restaurant are expense and loan accounting validation for franchise restaurant. With expense validation, you can verify the historic results of your franchise restaurant faster and in a more cost-effective way than a full-fledged audit.
On the other hand, loan accounting validation ensures that the recording of the loan expense reflects changes in outstanding loan balance over the term of the loan. If you want to get the most out of expense and loan accounting validation for franchise restaurants, then you must avoid the following 3 mistakes.
1. Not Performing Timely Reconciliations
For the success of your franchise restaurant, reconciling balance sheet accounts such as bank and credit card accounts is critical. Reconciling is tallying your account balance with your books to ensure they are correct and accurate. With timely reconciliations, you can detect problems before they get ‘too hot to handle’. The benefits of timely reconciliations include, but are not limited to:
- Keeping track of all expenses and revenues
- Catching bank errors
- Preventing fraudulent activity
- Knowing the amount of cash or credit available to you
- Determining if payments by customers have bounced or failed
2. Lack of Documentation Procedures
The failure to document certain business expenses could result in your franchise restaurant losing valuable tax deductions. Unless they are accompanied by supporting documentations, the Internal Revenue Services (IRS) does not consider expense items to be valid. The good news is that you can stay compliant with the following practices:
Establishing Policies—You should have a policy in place that allows expense and reimbursement reports to be paid only when receipts are attached.
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Paying Vendors Only After They Submit a Bill—While vendors expect to be paid for the goods or service provided, you should only pay them and record this after they submit a bill
Go Paperless—Lost or missing paper documents can add to your business costs and cause a lot of unnecessary headaches. You can avoid this by going paperless or moving your accounting/bookkeeping function to the virtual space
3. Not Seeking Outside Help
A franchise restaurant is a growing business and you cannot manage it all by yourself. Get help where you need it. Accounting and bookkeeping such as expense and loan accounting validation for franchise restaurants is one such area. There are many benefits of outsourcing expense and loan accounting validation for your franchise restaurant. These include loan receipt management, interest tracking, loan repayment monitoring, loan compliance monitoring, and full-service reporting.
At Global Shared Services, we have some of the best talent and software in the world for expense and loan accounting validation. With us, you get high-performance, end-to-end expense and loan accounting validation services that you can trust. These services are delivered by a team of experienced professional and tailored to the needs of your restaurant business.
Outsourcing your franchise restaurant’s expense and loan accounting validation to us will provide you with streamlined processes and the ability to scale through operational efficiencies.