Running a franchise network requires alignment of brand, products and services, and systems and processes. One of the most effective ways to manage your franchise network is by using digital software that will not only provide you with the resources you need to effectively run your operations internally from head office, but also help franchisees, some of whom may have not owned a business before, with the structure they need to better manage their stores and stay on top of cash flow.
Consider the volume of B2B transactions in your franchise network
As a franchisor, you likely need to collect a lot of different payments every day. Whether it’s initial franchise fees (training, system support and marketing materials), fit-out fees, ongoing franchise fees or ancillary costs for franchisee’s leases, accounting for all of these transactions can be time consuming for you and all of the franchise owners in your network. Further, if you use manual processes to reconcile your accounts and complete your financial reporting, you may have experienced data-entry errors which can drive inefficiencies across the business.
How better franchise management software can help boost your cash flow
Like any business, franchises may experience their quiet and busy periods. Throughout these times cash flow may decrease and tighten, which can impact the ability of your franchisee’s to meet their payment obligations. If a franchisee is unable to pay their invoices on time, this will eventually affect your cash flow too.
Late payments have a flow-on effect across the economy with many businesses paying their invoices, on average, 11.2 days late. If you already have 30 day payments terms, late can significantly restrict your cash flow and impact your ability to pay their invoices on time. And as late payments are the number one cause of business failure, it emphasises the importance for businesses to get the right systems in place to reduce late payments altogether. For franchise head offices, offering franchisees a range of payment options can help them stay on top of their cash flow, while ensuring you get paid on time.
Let’s take a look at an example for a franchise network:
Provide payment options to your franchisees
One of the most powerful things you can do for franchisees is provide them the systems and processes to improve the way in which they operate and run their stores, and enhance their supplier communications, all while helping to better manage their cash flow — because, after all, if they grow, your business grows too.
Here are a few benefits of how implementing a smart digital payment platform, such as Spenda, in your franchise head office can help accelerate growth across the business.
- Get paid on time, every time which means using the functionality and convenience of B2C payments in the B2B landscape. Think credit card payment options, bank transfers and Buy Now, Pay Later arrangements (like Afterpay but for B2B payments).
- Better bill presentment so your franchisees can view and pay for all of their invoices easily. Franchisees can select what they’ll pay and when and both parties have a clear view of what money is going in and out of their business every month.
- Automation of reconciliation by integrating Spenda with your accounting and financial systems, you’ll enjoy fast reconciliation and full debtor access, giving you all the tools you need to strengthen not only your cash flow, but your franchisee’s cash flow too.
- Improved procurement processes with Spenda’s inventory and purchase management software, which makes it easy for business owners to order exactly what they need from their suppliers at exactly the right time. Automated order reminders based on preset minimum and maximum levels will ensure you never run out of stock again, while eliminating problems such as ageing stock.
- Flexible payments with your suppliers because your franchise network will not only enjoy the ability to easily order from multiple suppliers from the one digital location, but will also benefit from the flexibility of a range of payment options, including pre-agreed instalments and access to third party finance.
Wondering how to provide more payment options in your business?
If you’re looking to provide more payment options in your business, but you’re not sure where to start, download our white paper here and learn how to use smart digital tools and integrated payments that help boost cash flow across the entire supply chain.