An Essential Guide for Multi-Location Business Reporting

Multi-Location Business Reporting


The average franchise has around five locations. Even though having a number of locations is a sign of a financially strong operation, each office or branch comes with its own accounting challenges. On top of that, consolidating information from a variety of sources introduces even more complications. By using the right software solution, you can unify your business reporting system, saving time, energy, and funds.

This white paper will break down:

  • Some of the most important challenges associated with multi-location business reporting
  • How advanced software enables more accurate and official business reporting for franchises
  • The kinds of insights that business owners should prioritize when generating multiple reports


How Outdated Tracking Methods Can Disrupt Productivity and Workflow


Productivity depends upon several factors, and tracking the production of each franchise location can have a significant impact. This is particularly true because each franchise essentially has to act as its own independent entity. While optimizing the performance of the franchise itself is your ultimate goal, you can’t get there unless you keep close tabs on how each location is doing. This is why it’s crucial that you use the right tracking methods.

But businesses often have to wrangle with outdated tracking systems, either because the franchise came with a pre-designed accounting system or because the owners haven’t had the time to identify a better one. This can result in disparate, disjointed accounts, disorganized receipts, and incongruous reporting methods.


Disparate, Disjointed Accounts

Even though it’s often prudent to allow each location’s manager the leeway they need to adapt to local conditions and adjust their practices as needed, when it comes to business reporting, consistency should be the primary objective. Otherwise, it may be difficult and time-consuming to reconcile all of the accounts across the organization.

To illustrate, suppose a window installation franchise gets the majority of its revenue from performing window installations, but some locations occasionally rent out installation equipment to other professionals. Because this isn’t common across all locations, those that do it may be tempted to lump this income in with the rest of their revenue and report it as one figure.

When it comes time to compare the performance of each location against the others, this disparity can result in inaccurate numbers and confusion. For example, if the revenue generated from renting equipment equaled 8% of overall receipts, from the perspective of an apples-to-apples comparison of installation proceeds, it may look like that location performed 8% better than it actually did. This could result in owners missing performance issues that could’ve been addressed and remedied.


Disorganized Receipts

When it comes to recording and organizing receipts, you have a range of options. Even though it’s good to have choices, this can also present issues—particularly if different locations use different methods.

For example, some people may be more inclined to include a greater amount of information with each receipt, while others may prefer to keep it as simple as possible. In many situations, particularly with only one or two locations, the difference may be simply a matter of preference. But as the number of locations grows, so does the need for a unified receipt system.

For instance, if one location consistently identifies the type of account a receipt applies to but another doesn’t when it comes time to consolidate accounts, the owners may have significantly more work on their hands. If, for example, a franchisee gets paid by customers who make purchases on the spot but also frequently receives cash that gets applied to accounts receivable, these need to be differentiated accordingly. It may save one franchise location manager time in the short run to group all receipts in the same category, but the time it takes to parse them out later can easily erase any short-term benefits.

On the other hand, if you use centralized accounting software across every location, you can achieve consistency. This can save you time and money in both the short- and long-term.


Different Business Reporting Methods Between Locations

Allowing different locations to use different reporting methods is perhaps the fastest road to a disorganized accounting system. Even though there are several valid and effective methods of reporting, they often don’t play well together within a single organization.

For example, suppose an automotive accessories franchise has eight locations, and half of them use the sales-basis method of reporting revenue, and the other half uses the completed-contract method. With the sales-basis method, revenue is recognized the moment to make a sale. The completed-contract method is different in that you don’t recognize revenue until the contract has been fulfilled.

A location that uses the completed-contract message has a contract with a local auto dealership to install certain accessories on a number of vehicles over the course of six months, starting in November. A different location, one that uses the sales-basis method, doesn’t have any long-term contracts like this and simply records each transaction as it happens.

At the turn of the year, when each location reports its revenue, there may be a significant discrepancy between their performances. Even though the location that has the six-month contract with the dealership has earned significant revenue, because they chose the completed-contract method, they may not report it out until four months later, in April. In comparison, the other location looks like it’s generating more revenue for the business when that may not be the case. In this situation, different reporting methods lead to an inaccurate representation of business performance.

By using the same accounting software across the entire organization, you can prevent these kinds of discrepancies.


How Advanced Software Enables Better Business Reporting for Franchisees


Advanced software paves the way for superior Business reporting for franchises in a few different ways:

  • You get seamless consolidated reports
  • You have the ability to generate custom reports while still maintaining consistency
  • You can identify key drivers to fine-tune performance
  • You can compare one location to another using consistent benchmarks


Consolidated Reports Save Time and Effort

By consolidating reports, you save time and energy because you cut down on miscommunications and reduce the time you have to invest in making each report comparable. For example, with a consolidated reporting system, you can have the same conceptual, perceptual, and semantic standards for every franchise location.


Consistent Conceptual Standards

By having the same conceptual rules, your reporting has a unified organizational structure. For instance, the categories you use are the same, as is the order in which they’re presented. If all locations report their accounts payable, accounts receivable, and weekly, quarterly, and yearly revenue the same, juxtaposing one against the other makes it easy to compare performance.

Taking it a step further, if the same business intelligence tools are used at each location, you get both comparable data and analytics. This can result in useful ratios, such as operating margin and gross margin, that reveal a lot about each location’s strengths and weaknesses.


Consistent Perceptual Standards

Because advanced software also unifies your perceptual standards, you can enjoy consistent visual representations of location performance. Even if you use two identical data sets to produce different charts or graphs, the kind of visualization you use can make it far easier to understand—and use—one or the other. While it may seem like a minor issue, if management has to switch gears every time they take a look at performance visualizations, you can be wasting time while also creating opportunities for confusion.

By using advanced software, you can prevent these kinds of issues from hampering your decision-making process. For example, if each metric is represented using the same kind of graph, such as a bar graph, it’s easy to spot discrepancies between locations from one time period to another. Similarly, if all locations use the same kind of line graph, you can spot differences in sales trends in a matter of moments—before even digging into the underlying data.


Consistent Semantic Standards

The expression “it’s all semantics” is used to dismiss differences in expression, but while these differences may be negligible in casual conversation, they can be detrimental when analyzing the performance of a franchise. Consistent semantic rules standardize communication across your business, and incorporating them into your accounting and reporting software brings unity to your organization.

For instance, suppose there’s a fast-food restaurant, and each location has its own reporting system. Each manager decides to label their menu items according to the categories they come up with. On the surface, this may seem like a small issue but in the context of a reporting infrastructure, it could result in serious problems.

For example, if one location uses the term “appetizers” in their reporting for both side salads and chicken tenders, but another categorizes salads as a meal and chicken tenders as an appetizer, their numbers will be incongruent and misleading. But by using the same software application and deciding how each item will be categorized, these types of semantic discrepancies—and the confusion they create—can be eliminated.


Generate Custom Reports While Maintaining Consistency

Consistency and uniformity are two different things. Individual franchisee locations can make their reporting consistent without having to emulate every detail of the other locations’ reporting mechanism. This gives each manager the freedom to create reports that focus on their individual strengths and weaknesses without creating confusion within the overall franchise’s system.

For example, while reporting performance successes, one location can produce a section that emphasizes how sales have grown over the last quarter, highlighting this by putting it at the top of their report. Another location may want to highlight the number of sales they achieved, even though it was only marginally higher than the previous quarter.

With advanced software, each location can create these kinds of metrics and the visualizations used to present them without creating inconsistencies in the overall reporting system. For example, even though they choose to highlight these metrics at the outset of their report, the rest can be uniform, making it easier to make side-by-side comparisons of each location.


Identify Key Drivers to Fine-Tune Performance

Even though the performance of each franchise location may depend on slightly different factors, in most franchises, the key drivers are generally the same. For example, two locations of an equipment rental franchise may both need to focus on balancing long-term rentals with short-term ones in order to maximize revenue. On the other hand, a restaurant franchise may have to focus on keeping payroll overhead low—regardless of the location—to maintain adequate profitability.

By using a centralized software solution, you can:

  1. Identify the key drivers your franchise needs to focus on in order to maximize success across locations.
  2. Design metrics that surface how well each location is doing in these areas.
  3. Pull these metrics up to get a snapshot of how each one is doing.
  4. Use this information to present to managers and decision-makers so they can strategize ways of improving performance.


Compare One Location to Another Using Consistent Benchmarks

One of the biggest benefits of a unified advanced software system is the way it gives you the ability to compare one location to another. Without accurate and consistent reporting standards, it can be easy to incorrectly label one location as the “weakest link” in your franchise’s chain. At the same time, it can be equally easy to misidentify another location as the flagship performer. With the right software solution, however, all locations can be put on an equal plane.

Effective software also streamlines the process of setting up consistent benchmarks that each location can strive to achieve. In this way, you simplify the management of the franchise, giving everyone the same set of standards and objectives. This empowers your managers because it gives them tangible goals to shoot for. They don’t have the freedom to use their creativity and work ethic to meet your organization’s objectives.


Optimize Your Multi-Location Reporting with PathQuest


PathQuest BI can help eliminate the miscommunications and inconsistencies between locations that can hamper a franchise’s performance. With PathQuest, you get a comprehensive software solution that enables you to:

  • Set up a seamless consolidated reporting system
  • Generate custom reports without sacrificing consistency
  • identify key drivers you can use to improve performance
  • compare one location to another and set up consistent benchmarks


To learn more about how PathQuest can simplify and automate your franchise’s accounting, or book a demo.


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