Based in Melbourne, Karen and her team of seven provide bookkeeping services to some 150 clients, both franchisees and small business owners across the country. For Karen, it's about the numbers.

“Every job I have done since school has been numbers-based — financial controller, accounts clerk, accounts manager,” Kennedy says. “I’ve worked from small businesses through to larger companies. I was with the Haines Group, then Poolwerx and Raine and Horne Queensland, in accounts and franchise development.”

It was while at Poolwerx HQ that Kennedy identified franchisees’ need for solid financial support. “I learned a lot of people who buy a franchise don’t necessarily have skills on the financial side — bookkeeping, cash flow — the things that are important to ensure their business runs smoothly,” she says. “Debits and credits are the same, but every franchise has its own nuance, whether it be chartered accounts or reporting requirements.”

Franchisees are not given enough accounts training

Karen often sees right across the franchise spectrum, that franchisees are given extensive operational training that can run for weeks, yet often only get a couple of training sessions on bookkeeping. It isn’t enough. Inexperienced franchisees often find it hard to get their heads around the rules of the franchise in relation to accounts.

Karens extensive franchise experience has also shown that unrealistic franchisee expectations can impact severely on the business, and that the franchise structure can impose another level of compliance on the business that adds to the stress.

“You can have a franchise turning over $500,000 a year, but that doesn’t tell you what the profit or bottom line is,” she says. “You may have seasonal jobs, like with pools —you go through winter where people don’t use their pools so much so don’t get them cleaned as often, so your income is going down. But the franchise still wants their fees.”

Hire an expert

Karen says there can be some frustrations for franchisees that independent small businesses don’t have. “ You might want to run this amazing advertising campaign, but the franchise says you can’t because it’s against its marketing guide. Or you’re expected to contribute to a marketing campaign, but it might not work for your area. But if that’s what the franchise has decided you’ve got to go with it.”

With such pros and cons factors to consider, Kennedy believes hiring experts to take care of your bookkeeping so you can concentrate on running the business is a no-brainer. “We want our clients to be growing their franchise, getting their client base up, without having to stress about creditors, payroll or reporting,” she says.

“My franchisees don’t have to worry about having their figures by a certain time each month because we’ve sorted it. And we can warn them that say, next month, it looks like you won’t have the money to pay bills you have to pay — so we need to get some payment plans in place.”

Kennedy says many people make the mistake of thinking if there’s money in the bank then everything’s OK. “What’s in the bank is not necessarily profit when you’ve got GST, PAYG and payroll to pay and especially when you also have your franchise and marketing fees.”

The key - dedicated account managers

Each Bookit client has a dedicated account manager, which is a point of difference the business prides itself on. They tailor a full service package with a fixed monthly rate so the client knows exactly what they’re up for and can budget accordingly. “For the client, having that relationship with someone who fully understands your business needs from a reporting point of view is key,” Karen says.

“We have systems in place so your business ticks over 52 weeks a year. A lot of businesses, if your accountant calls in sick, everything stops — no invoicing gets done, no one’s chasing payments. We don’t only do your BAS or payroll — we take care of your whole accounts department.”

Most of Bookit’s work is done remotely via the cloud, but they try to catch up with their clients in person once every quarter. But if anything crops up and the client wants extra advice, it’s not a problem. “One lady with two JustCuts outlets wants to go through some figures in regard to cash flow because she’s planning to move a salon,” Karen says. “That doesn’t cost her any more because she’s already on a package with us — we just include it.”

Initially, the bulk of Bookit’s clients were people Karen had forged a relationship with during her Poolwerx days. Since then, most of Bookit’s work has come from referrals. 

“Our whole business is word-of-mouth,” she says. “We look after people’s finances and, as corny as it sounds, it’s their hopes and dreams. They’re trying to create a career and a lifestyle for themselves. People don’t just Google ‘bookkeeper’ —  they ask someone they trust for a recommendation. That’s how we got our second Grill’d client. Now we look after several Grill’ds. If we can get more clients within each franchise system it’s easier for us because we already know the system and reporting requirements.

Just today I had a client refer me to someone opening one of those Korean hotdog franchises, Chunkytown, in Melbourne."

Real help for small business clients

Growth has been steady rather than spectacular, and that is deliberate as Karen is cautious not to spread her team too thin. “We had somebody ring today for what we call a ‘rescue job’ — they’re behind in accounts and desperate for help,” she says. “Realistically, we couldn’t help them as it was the end of the financial year and our existing clients take precedence. We’ll continue to recruit our next person well before we need them so we don’t end up with too much work and not enough team.”

Karen recounts several examples of franchise owners Bookit has provided a lifeline to. One was a Minuteman Press franchisee. “When we started with him, he was new in the business and he and his wife had been looking after the financials,” she recalls. “They were working long hours every day, then at night entering data into spreadsheets. As the business grew, it was getting harder to keep up. We took the spreadsheets away, sorted out errors and got them onto Xero. We use Receiptmate to scan their source documents and get their sales figures to head office.” 

She remembers a call from the client four months into their relationship. “He said he and his wife had been out to dinner and taken their kids away for a weekend, something they hadn’t done since getting into the business.That’s exactly why we do what we do. You go into a business to have a lifestyle and you end up losing your lifestyle because you’re at home every night punching figures, adding up receipts and doing payroll.” 

Another client, a Grill’d franchisee, already had a bookkeeper, but found when he opened a second restaurant, things started to fall apart.

His bookkeeper worked alone, entering data manually, and his monthly accounts were taking longer to get done. Bookit stepped in to organise and automate the process. “He was getting closer to deadline every month,” Karen says. “We’ve now got a team scanning and coding all the paperwork so at the end of the month we’ve got all we need to lodge the figures. That brought him peace of mind — he didn’t have to stress about being late — and he’s got a better idea of his figures because he has more access to his data.”

Saving money

Bookit also saved the franchisee money. “She was charging by the hour and manually entering invoices, so now it’s a big saving. On top of that, we can shred the actual paperwork so he’s not drowning in paperwork and filing cabinets!” 

Despite the prevalence of accounting software, Karen cautions against the practice of DIY bookkeeping, saying her clients are focused on growing their businesses and happy to leave their accounts to the experts.

“People who understand they need it done right, understand it’s more than just clicking through a list. It’s not just data entry, it’s account management and there’s a lot of advisory stuff in the relationship. You’ve got FTP (file transfer protocol) requirements and a lot more compliance required.”

Basically, she says, it’s about ensuring the businesses Bookit works with are compliant to give them that peace of mind the ATO won’t be knocking on their door tomorrow. “We keep all the source documents, cite all the invoices and claim everything right,” Karen says. 

“Too many bookkeepers work off a bank feed and don’t get the actual documents. That’s doing the client a disservice. You need to be checking the invoices. We had an example today — a company we work with had a new subcontractor who supplied an ABN. One of my team checked the ABN and it was incorrect; they weren’t registered for GST. We catch lots of things like that, which is fortunate because if we were just coding it, in an audit situation, our client would be in trouble.”

Going forward, Karen says she wants to help grow the franchising sector, but won’t neglect the small business owner. “Franchising is such a massive employer and there isn’t much out there to help with the financial side of it,” she says. “People are paying hundreds of thousands of dollars for these franchises, we don’t want them going out of business in 12 months. A lot of bookkeepers also dabble in things like HR. We don’t. We only do bookkeeping. We’re not accountants, but we have a great network of accountants we can refer people to.” 

Looking for help? Contact Karen HERE