Jeremy Harris talks about some apps to make the job easier and how to use Key Performance Indicators in business.
Let’s move to some exciting things about bookkeeping and payroll.
I just want to cover how easy this sort of stuff can be these days.
Probably many of you have heard of Xero, the accounting app. I knew about Xero for a while but thought it was just a noise in the background and something else to learn but as soon as I saw it, I was absolutely hooked. Xero is not the only one. Quick Books online is a good accounting product and MYOB also have an online product in the small business space.
Sometimes when you move up the franchising level these packages may be too small but they are certainly very useful up to a certain size It all depends on the complexity of the business and how many different moving parts there are in it.
What is particularly interesting is a quote from the CEO of IWS Bookkeeping Solution in Melbourne which specialises in franchising. He said Xero is the best accounting package for franchise space. Some of the reasons for that are the ability to plug in different applications that are called add-ons. There are various ways of doing that but if structured correctly, you can see on a day to day basis how your franchisees businesses are going and then make sure the reporting that you are getting is accurate. In fact you can have direct control over the reporting through Xero.
Some of you might have heard of Receipt Bank, one of my favourite add-ons for Xero. It saves a lot of time when it comes to data entry of supplier invoices and tracking of receipts. It’s possible to scan an invoice directly into Receipt Bank. There are different ways to get that information into Receipt Bank. Then through optical character recognition, it will look at the invoice and pull out the data – the date of the invoice, due date, supplier name, amount and the GST amount, in separate fields and also also store an image of the invoice. Once the bookkeeper is satisfied with the data it is pushed into Xero with a click of a button as a supplier invoice, ready to be paid. That saves sitting there and entering in supplier invoices to Xero.
It doesn’t only push the data to Xero, it also pushes the image as well. One of my earliest lecturers said digital files does not exist unless it is in 3 places and that’s been one of the hurdles of cloud accounting and cloud software generally. I can’t touch it or feel it, it’s not on my local hard disk or my server, so there are not 3 versions of it. So with this example there are at least two; we have an image of the supplier invoice in Receipt Bank and an image of it in Xero that has been pushed across from Receipt Bank. So there are two copies of that invoice and if one fails you have the other one and then in different ways it’s possible to create a third copy as well. The tax office is certainly quite happy with electronic copies of invoices these days so there is no need to keep the paper copy especially with a good combinations of systems like this.
The other thing about Receipt Bank is that it’s possible just to take a photo to those little invoices that you gather in your wallet, purse or handbag, whether they are credit card or cash, and put them into Receipt Bank where it gets processed. So, that’s extremely useful from a bookkeeping view.
The other one that’s worth mentioning is Deputy, a staff rostering application. The particular example I love is an ice cream shop needing to roster staff for various shifts. To do this, they need to predict the number of staff they need.
There are 2 aspects to Deputy.
One is that it has a really flexible communication systej for publishing rosters.
I was amazed when one of our kids was working at a couple of local franchised restaurants. With one he would need to phone up at the beginning of each week to find out his shifts. With the other they would send him an email at the beginning of each week. Neither system worked that well.
With something like Deputy the team love it because they receive their roster for the week on the app and if they can’t make a particular shift they will let their manager know by clicking a button on the app which goes straight back to the manager. Deputy then advises that particular person has some unique skills needed for that shift. Maybe they can close the till at the end of the shift. Deputy searches for somone else has those skills and is available, so narrowing down the list of available people based on specific criteria giving the manager the opportunity to choose somebody else to allocate that shift too.
The other thing that Deputy does, if it’s relevant, is keep track of the weather forecast which is why I like the ice cream shop example. Deputy can note that this time last year this is how busy the shop was, the weather forecast for the next week is hot and sunny, so based on that combination of data, Deputy estimates the number of staff you need to be rostered on for that shift next week. So it’s bringing some intuition, some artificial intelligence, into the planning of shifts and rostering.
There are many other applications which are useful in different types of business which connect in with Xero and talk to each other as well.
Key Performance Indicators in business
So related to accounting and bookkeeping, let’s just touch on measuring performance and Key Performance Indicators. Particularly when you move to the franchising space, it’s really important to have a handle on what the benchmark numbers are going to be. You work these out from our own experience of operating the business and then you have measurement benchmarks to apply to franchisees.
I mentioned before, that with something like Xero you have the ability to see how all the franchisees are going.
So using the standard Key Performance Indicators you previously set which set the performance expectations, you can benchmark each location against each other and against on the KPI’s that you choose.
Some other possible KPI’s that are going to be relevant depending on the type of business that you have non-financial KPI’s because it’s not all about the dollars. Sometimes it’s about other things as well and then about combining the dollars and these other measures to get a better picture.
A great example measuring how long customers wait to be served is McDonalds. Most of us have probably seen the timer countdown on the screens in their drive through. This is measured and that data is constantly going back to head office from every different store.
The sales of different products is very important for some. Being able to report product sales from different locations or different franchisees is going to be valuable data.
How many recurring customers are franchises getting and what are the marketing opportunities and how you can capitalize on their return custom.
Measurements such as how much do you pay in wages per dollar of income you earn are very useful in various ways
What you measure you can manage is really important when you looking at these statistics.