Accounting—Better, But Still A Long Way To Go
As we all know, SEI maintains our bookkeeping as part of their contractual obligation to franchisees. For our part, we have to furnish different kinds of cash and credit purchase invoices, receipts and bills for operating expenses, and payroll information to complete the process. Under the Franchise Agreement, storeowners may perform or obtain any additional bookkeeping as they wish, and either party may inspect store operation records prepared or obtained by the other party. While the 7-Eleven process may look good in writing, in reality it requires more improvement.
On a positive note, many changes have been made over the years to speed up the process of sending invoices and other records from the store to regional accounting centers in order to reduce the processing time for all kinds of accounting—a very good step. Pick ups by special courier services and the CDC drivers are now history. EDI invoices and the installation of scanners did eliminate the receiving logs and helped franchisees get faster access to current merchandising reports, but they did not help solve the old problems of wrong retail extensions or other erroneous merchandise-related entries.
Regional zones face different types of accounting mistakes related to payroll and merchandising reports. For example, the factoring of the retail extension of recommended items for a particular vendor for a big difference; improper S-18 corrections; factoring or modifying the custom retail in some cases; the modification of cash purchase retails; and two entries of the same EDI Pepsi invoice during the same day, with the second entry twice the amount of cost and retail. Additionally, in some cases CDC items have the correct case cost and retail, but if you do the shortage adjustment it gives you credit for one unit both in cost and retail.
Audit shortages or overages in the thousands of dollars created by the wrong retail have led franchisees to get special audits done in order to clear the mistake, but it again comes down to wrong entries. In all these situations, the burden falls on franchisees to check and compare the merchandise reports, S-18 reports, payroll registers and store financial summaries. Solutions lie in creating an accounting case online and waiting for the resolution. In some cases, live help from accounting personnel is not very useful because the person is not experienced enough to answer or solve your questions. Many times, franchisees have to speak to several different accounting employees in order to get the right results. To add insult to injury, when an accounting problem is brought to a field consultant’s attention, their common answer is, “I will roll it up to the next level.” Their main defined role, apparently, is only to help you improve sales and make sure you are in compliance with the policies developed by our franchisor.
Perhaps EDI invoices and the installation of new scanners and other related technology have helped SEI reduce the accounting workforce to save money, but it has not helped to eliminate the mistakes that cost franchisees money. A few months back, an accounting seminar was held in my area to help franchisees understand how the department works and what steps we can take to report the paperwork correctly to improve the process. I think it was a good step in the right direction—we need more of that kind of education and awareness to improve our understanding, and our finances.