Why Moving Accounting to the Cloud Is a Game-Changer for Hospitality Franchises
When you launch and operate your first/only franchise hotel or restaurant, the accounting needs can be relatively straightforward… at first. For most single-location businesses, managing the general ledger, closing the books, and taking care of payroll, AR, and AP – that all happens easily with simple, single-user PC accounting systems.
But when your hospitality franchise grows? That’s when the challenges become exponentially greater. You add a new entity or two and that requires a new instance of your accounting software, new user IDs, and maybe even a separate chart of accounts.
And when you grow to dozens of multi-entities – with different concepts, regions, sizes, and more – those challenges become major headaches as single-user accounting packages are overwhelmed by the requirements.
- You want to manage financials for each unique entity, but don’t want to maintain separate IDs and chart of accounts
- You want to compare the performances of each of your different entities’ locations, concepts, departments, vendors, and more. But each entity has its own chart of accounts, periodicities, and customized nuances and exceptions. Consolidations are complicated, time-consuming tasks that require a pile of fragile Microsoft Excel spreadsheets.
- You can’t automatically perform intercompany eliminations.
- There’s no integration with POS, property management, reservations, or other systems that are crucial to a successful hospitality business.
Finance Becomes a Team Sport
In thriving hospitality organizations, the accounting and finance operation soon grows from a single-user proposition into a team sport – and that requires a multi-user accounting system that can keep pace. In making that transition, the following criteria merit careful consideration.
Support for Multiple Entities
When you have separate locations, concepts, regions, you need to efficiently consolidate and report on their performance. Instead of depending on stacks of cumbersome and unreliable spreadsheets, look for a solution that uses a single chart of accounts across business units with automatic consolidations, intercompany eliminations, and roll-ups across properties, brands, geographies, departments, products/services, and other dimensions. Instead of days or weeks, you can consolidate in minutes to see what’s happening sooner.
Multi-location hospitality organizations need much more than an income statement, cash flows, and a balance sheet. With a multi-user, cloud-based system, you can see all the data across your organization in real-time. And this data can be organized based on roles, so your district manager and see only their own location, but your CFO can see compare and contrast across all. Which locations are seeing more traffic? Which promotions draw more customers? What products are most profitable? What days, times, dates, weeks, and seasons bring greater sales? The right cloud accounting system will show you more insights in minutes so you can respond to competitive threats and capitalize on business opportunities.
Instead of trapping your accounting and finance functions on a single computer operated by a single user, a cloud-based system securely opens up a complete range of accounting functions to the entire finance team to foster greater collaboration, increased accuracy, and faster insights.
- Remote Access – Thanks to a secure network connection, users can easily access data, perform tasks, and create reports – around the corner or around the world – from almost any browser or device at any time.
- Zero Maintenance – It might be easy to assume that a multi-user system requires more resources for maintenance and administration. However, cloud software solutions are less worry when your organization doesn’t have to manage maintenance, operations, backups, updates, and more. You just log in and use the system and sidestep the capital expenses and maintenance worries.
- Better Collaboration – Thanks to the cloud connection, your team can collaborate more easily, share data faster, and eliminate discrepancies and conflicts. You’ll have a “single source of the truth” because there’s only one shared, secure set of data
- Easier Integration – No more disparate systems for your point of sale, reservation management and more. Instead, cloud accounting solutions should have easy integration to the systems that you need to run your business most efficiently.
Following their implementations, most hospitality organizations who leverage multi-entity cloud-based accounting generate significant advantages and benefits. Staffing costs decline or remain unchanged even as the business grows by eliminating duplicative and manual work. AR collections accelerate to improve cash flow. Monthly closings take hours instead of weeks. And companies typically see payback periods of three to nine months. And that’s the kind of value that any hospitality organization can appreciate.
ABOUT THE AUTHOR
As Hospitality lead for Sage Intacct, Susan Casella champions Hospitality customers across restaurants, franchisees, lodging, fitness, gaming, entertainment and more. Susan brings over fifteen years of experience working with fitness and entertainment companies, as well as experience helping showcase customer successes in software companies.