For any business, sustainable growth is always built on increased efficiency.
That’s especially true for multi-unit franchise owners. In a world of often-thin margins and high-volume sales, they’re able to tap into economies of scale in order to reduce costs while maintaining or increasing value. In turn, those efficiencies allow them to grow their businesses.
The lesson: to grow your business, grow your efficiencies.
Outsourced accounting is one of the best opportunities to do that. Yet, many franchise businesses don’t outsource their accounting – or, they do outsource it, but the firm they choose ends up being a poor fit that drags down efficiency instead of enhancing it.
Why? Often, it’s because these businesses have bought into misconceptions.
With that in mind, here are the common myths around outsourced accounting, presented with the intention of helping your multi-unit business to identify and capitalize on true efficiencies by working with the right sort of firm.
Ready to find out where your misconceptions are and where outsourced accounting can help? Let’s get started.
Myth 1: Outsourced accounting services aren’t accurate.
There’s an unfortunate misconception that the average outsourced accounting service tends to be inaccurate.
This may be due to the belief that in-house accountants have more time and context for understanding the business. It may be because outsourced accounting involves a delegation of control that can feel risky. It may be because certain outsourcing companies seem to rely on a lower-skilled workforce.
Yet the reality is that outsourced accounting services can (and should) offer at least comparable levels of accuracy compared to in-house solutions – and the right options offer superior accuracy.
Some of this comes down to experience level. Quality outsourced solutions staff teams that are thoroughly familiar with the intricacies of franchise accounting. These people speak the language of the brand. They understand its franchisee requirements. An internal accountant may not.
Quality assurance processes help here, too. An outsourced solution has a team of highly-skilled accountants that an internal department would be hard-pressed to match. Teams catch errors that individuals might miss.
Myth 2: Great communication is hard to come by.
A second myth around outsourced accounting services is that they don’t communicate well.
Unfortunately, there’s a grain of truth here; some providers really don’t communicate well. While it isn’t always the case, there are two outsourcing scenarios where poor communication may be more likely to happen:
- Off-shore outsourcing firms that struggle to synchronize communication over huge time zone differences. Understandably, in these cases, communication may lag.
- Major outsourcing firms that are built for $500 million accounts and struggle to communicate well to mid-market, multi-unit franchises. In these cases, providers may not consider franchises to be high-priority clients.
People who believe this myth either work with a poor fit and make do with poor communication. Or, they forego outsourcing altogether.
These aren’t the only options, though. At Global Shared Services, we’re built to serve multi-unit franchises with high communication through a reliable point of contact. Our clients are able to consult with a person when questions arise so that they can get full value from the service.
Great communication isn’t ubiquitous across all outsourced accounting solutions. But the best outsourced accounting firms have it.
Myth 3: Businesses of a certain size require an internal accounting function.
Finally, one of the more interesting myths around outsourcing multi-unit franchise accounting is that businesses of a certain size should keep things in-house.
Often, this perception is more based on feeling than on any kind of tangible data. Some franchise businesses believe an internal department allows for more control. Some have existed for 20 years with an internal accounting department and see no reason to change now. Some businesses may even view an internal department as a badge of legitimacy.
The reality, though, is that many multi-unit franchises have an internal accounting department not because it makes more sense than outsourcing, but because, 20 years ago, it was the only option.
It’s not anymore. And, increasingly, an internal department doesn’t offer comparable benefits to outsourcing. Those include:
Scalable technology – At Global Shared Services, for example, we have experience and licenses in the technologies that franchise brands use. And in the absence of existing technology, we can bring solutions ourselves. Because we function at a larger scale, the costs of our technologies are streamlined.
Scalable services – Outsourced capabilities are more scalable. Internal departments typically require another person per three locations; based on optimized teams, we can service up to four times that bandwidth per person at lower costs.
Increased access to expertise – Finally, outsourced accounting services also offer access to increased levels of expertise. There are a broader range of experts involved on an account, for one thing. And an internal accountant likely doesn’t have expertise in mergers or acquisitions, while we can even offer scalable CFO services that can provide direction in high-leverage financial situations as needed.
Ready to Increase Your Multi-Unit Franchise’s Efficiency?
Don’t buy into myths.
The key to scaling your multi-unit franchise business lies in increasing your efficiency. When done well, outsourcing accounting is one of the best ways to make that happen.
To learn how Global Shared Services can help your business create efficiencies at scale while maintaining high levels of service, get in touch with us today for a free consult.
You should have access to experts.
Founded in 2003, we’ve worked with large corporations and small-to-medium businesses alike. Here’s what we’ve learned: access to expert financial and accounting services is a major factor in a business’ ability to succeed and scale. We believe that it shouldn’t be restricted by location or company size. Our mission is to empower restaurants and technology firms with that access.
With GSS, we meet our franchisor requirements on time and with accuracy. The local CPA could not handle our volume. We are so happy to have made the change. GSS knows our business and our franchisor requirements.Multi-unit fast sandwich Owner