Version 1.0 Oct 20261
Accountant’s Guide Partnering with G.J. Gardner Homes: Important Financial Management & Integration Guidelines
G.J. Gardner Franchise Owner Succession & Exit Playbook
Expertise, Support & Guidance At G.J. Gardner Homes, we deeply value the expertise, support, and guidance you provide to our franchise owners. We see ourselves as direct partners in their success, and we know that strong, accurate financial management is critical to helping their businesses thrive. Our partnership with our franchise owners is also a legally binding agreement which holds obligations to both parties. Accurate financial information is a core part of this agreement. To ensure our franchisees receive seamless reporting and true visibility into their profitability, our financial setup relies on a direct integration between Xero and our Job Management System (G.J. Software). Because these systems sync continuously, there are several core touchpoints that must be respected when managing or adjusting financial records: • • • •
Contract Names Job Numbers Cost Centres General Ledger / Chart of Accounts (COA) Numbers
Modifying, remapping, or manually altering these specific elements directly in Xero can break the data link with G.J. Software, leading to reporting discrepancies and unexpected syncing errors for the franchisee. Most transactions won’t affect the integration, however if you are in doubt, our Franchise Finance Team is here to help. We can guide you on the correct workflow or assist in making those changes directly so the integration remains completely aligned. We appreciate your cooperation in protecting these integrated workflows, and we look forward to working closely alongside you to support our mutual clients. Please don’t hesitate to reach out to our team whenever you have questions or need assistance.
Accountant’s Guide to G.J. Gardner Homes
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Contents Master Chart of Accounts (MCOA)
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Shareholder Loans
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Integration Workflow - Income and COGS
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End-of-Financial-Year (EOFY) Adjusting Entry
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WIP / Accrued (Unearned) Income
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Subcontractor Compliance (Taxable Payments Annual Report / TPAR)
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Finalising Jobs
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WorkCover
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Incompatibility
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Key Performance Indicators (KPIs)
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Australian Tax Office Integrated Client Account (ICA) and Income Tax Account (ITA)
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Home Warranty Insurance
10
External Funding
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Display and Spec Homes
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Accountant’s Guide to G.J. Gardner Homes
Master Chart of Accounts (MCOA)
Integration Workflow Income and COGS
The Chart of Accounts used by G.J. Gardner Homes Franchise Offices is based on a MCOA developed and maintained by the Franchisor Finance Team. The benefits of having a consist MCOA allows for:
G.J. Software is the dominant system. All changes to contacts must be made within G.J. Software. These changes will reflect in Xero following a synchronization. Claims for jobs must also be raised in G.J. Software, not Xero. Once a contract claim stage or progress claim is raised, a claim invoice is automatically created in Xero for payment reconciliation. Payment status is updated in G.J. Software once payments are allocated in Xero.
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Meaningful benchmarking between franchise offices
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Streamlined reporting and aggregation
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Simplified onboarding and training
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Targeted support for underperforming offices
To maintain consistency, please contact the Franchise Finance team before making any adjustments to this MCOA, specifically within the Profit and Loss section. We understand the Balance Sheet will need to be adjusted for movements and changes. Particularly around Asset purchases and associated liabilities.
Accountant’s Guide to G.J. Gardner Homes
From a job cost point of view, budgets and purchase orders are created in G.J. Software. These are not visible in Xero. Xero transactional data is pulled into G.J. Software using two tracking categories: Job Number and Cost Centre. When transactions are coded to accounts 5-1010 Subcontractors and Suppliers, 5-1015 Materials, or 5-1060 Sales Commissions and assigned both a cost centre and job number, the value is applied to that specific job’s budget.
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WIP / Accrued (Unearned) Income At G.J. Gardner, Work in Progress (WIP) is calculated in accordance with local revenue recognition standards (AASB 15). WIP is determined by taking the costs incurred to date, subtracting revenue claimed, and adding the budgeted profit multiplied by the completion percentage (percentage of costs received to date of the budgeted amount). This report and associated journal is done within our Job Management system, G.J. Software and the journal transferred to Xero as a manual journal.
Journaling The WIP adjustment being processed in G.J. Software results in the journals below. The debit and credit will depend on whether there is a positive WIP (income to accrue) or a Negative WIP (unearned revenue): •
End of month: Accrued/(Unearned) Income; Closing WIP Adjustment.
As WIP is at a point in time the journal is reversed the next day.
This calculation applies to each job that has reached at least the Deposit Pending Preliminaries (DPP) stage.
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Formula: Accrued/(Unearned) Income = ⅀ A - B + C * D
Note: These journals automatically reverse themselves. Please avoid making manual adjustments via edit in Xero to these specific transactions. If adjustments to WIP values are required, which is not recommended, these should be processed within the G.J. Software in conjunction with the franchise owner or as a separate journal, which must be reversed on the first day of the following month.
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A: $ Costs incurred to date (ex GST) (referred to as invoices to date $ in G.J. Software)
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B: $ Revenue claimed to date (ex GST ) (referred to as claimed to date $ in G.J. Software)
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C: $ Budgeted Profit (ex GST)
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D: % of budgeted costs incurred (referred to as invoices to date % in G.J. Software)
First day of the following month: Closing WIP Adjustment; Accrued/ (Unearned) Income.
Balance Sheet The accrued/(unearned) income amount is reflected on the Balance Sheet as a current asset or as a negative current asset if it represents unearned revenue. Profit & Loss The Profit and Loss statement converts the closing WIP on the final day of the financial year to the Opening WIP on the first day of the next financial year. During the year, the movement is recorded on the closing WIP in the Income section of the Profit and Loss. The Closing WIP value is adjusted month-to-month to match the WIP report balance in G.J Software. The Profit and loss closing WIP figure records the movement to the closing work in progress amount, the YTD closing WIP value should always match the most recent WIP run.
Accountant’s Guide to G.J. Gardner Homes
Finalising Jobs
Incompatibility
Three months after a job is handed over, jobs must be finalised within the G.J. software. It is up to the franchise owner to ensure all costs and claims are raised and entered prior to finalising.
G.J. Software and Xero have multiple touchpoints. To maintain integration integrity, do not use the following features within Xero:
Once finalised, costs must no longer be assigned to the accounts 5-1010 Subcontractors and Suppliers, 5-1015 Materials, or 5-1060 Sales Commissions or given a cost centre/job number. Instead, all future maintenance costs should be assigned to 5-3000 Maintenance on Finalised Jobs with no tracking codes; please note the relevant job number in the description.
Accountant’s Guide to G.J. Gardner Homes
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Contact Merging
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Contact Archiving (this should be done in G.J. Software and will auto archive in xero)
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Xero Entity Name Changes
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Addition of or editing of tracking categories
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Changes to access levels for G.J. Gardner domain email addresses •
bi@gjgardner.com.au
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xero@gjgardner.com.au
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finance@gjgardner.com.au
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xero_support@gjgardner.com.au,
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Any CTB accounts
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Australian Tax Office - Integrated Client Account and Income Tax Account
Shareholder Loans
The franchise owner is responsible for ensuring the ATO Integrated Client Account (ICA) is regularly reconciled to the relevant Xero accounts on a cadence that matches their statutory submissions.
Monitoring shareholder loan balances is critical to maintaining clean accounts and accurate balance sheet reporting across all franchise locations. While the primary responsibility for day-to-day coding lies with the franchise owner, accountants play an essential oversight role in ensuring transactions are recorded correctly and in providing guidance on the implications of withdrawing funds through shareholder loans.
As their accountant, you are accountable for overseeing this process and ensuring the records are entirely accurate. If the franchise owner is actively performing this reconciliation, please ensure they have full visibility into the necessary accounts (i.e. provide the running balance or ensure they have access via the business portal), while you maintain oversight to guarantee the integrity of the data.
External Funding Some franchises may maintain funds outside the primary trading entity. While we prefer these balances to be reflected in the entity’s Xero file, if this is not possible, we encourage franchise owners to notify the Franchisor of these balances for accurate Balance Sheet KPI reporting. We will request these balances twice a year, but please encourage your client to notify us immediately if a significant change in balance occurs.
Accountant’s Guide to G.J. Gardner Homes
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It is vital to educate franchise owners on the potential pitfalls of relying on shareholder loan drawings to fund personal expenses. Unmanaged or unaddressed drawdowns can distort the business’s true working capital position and create severe tax risks, particularly under Division 7A rules. From a high-level perspective, un-cleared shareholder loans treated as division 7A loans may lead to un-franked dividend assessments, required compliance loan agreements, or minimum benchmark interest repayments. Accountants should advise franchise owners proactively on managing drawdowns, establishing proper salary or dividend strategies, and resolving outstanding loan balances prior to end-of-year finalisation.
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End-of-Financial-Year (EOFY) Adjusting Entry To ensure the Franchisor and Franchise owner has access to accurate data and to support consistent network reporting, please ensure all end-of-year adjusting journals are entered into Xero for both the Profit & Loss and Balance Sheet. This should be done once the financial year has been finalised. We would like to draw your attention to those accounts that should not have adjustments done directly to the account. •
System Generated WIP journals - these should not be voided or edited
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Accounts Receivable
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Accounts Payable
Income & Cost of goods sold integrated accounts The below chart of accounts numbers are directly linked to G.J. Software, changing transactions in these accounts can impact contract reconciliation’s and job estimate budget actuals. Any changes to individual job income or expenses should be done with consultation of franchise owners to preserve job financial data. •
Contract House Sales
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Subcontractors & Suppliers
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Materials
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Sales Commissions
Accountant’s Guide to G.J. Gardner Homes
When end of year adjustment are done the benefit to all parties include: •
Elevates the quality of the data for everyone
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Allows the franchisor finance team to provide them with targeted support to help grow their bottom line during the year with your assistance
Once complete, please ask your client (franchise owner) to provide a copy of your signed end-of-year (EOY) financial statements to the Franchisor to help us confirm reconciliation. If EOY financials are prepared and published in Xero, sending a copy of the statements is not required; however, we ask that you notify us that the financial statements have been prepared, signed by the franchise owner, and published in Xero
Subcontractor Compliance (Taxable Payments Annual Report / TPAR)
WorkCover
G.J. Gardner Homes franchise entities operating within building and construction services must ensure full compliance with Australian Taxation Office (ATO) Taxable Payments Annual Report (TPAR) reporting obligations. Payments made to subcontractors for building and construction services need to be accurately recorded and reported annually by 28 August.
WorkCover obligations are state-based and ultimately the responsibility of the franchise owner. However, accountants play a vital oversight role by ensuring that:
The responsibility of this report generally sits with the franchise owner. We recommend the following to maintain seamless TPAR reporting in Xero: •
Ensure all subcontractor contact records in Xero have valid ABNs, business addresses, and TPAR inclusion checkboxes enabled.
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Do not bypass G.J. Software purchase orders when processing subcontractor invoices, ensuring cost centre tracking remains consistent between systems.
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Reconcile TPAR reports in Xero prior to lodgement to verify gross payments and GST amounts against General Ledger account 5-1010 Subcontractors and Suppliers.
Accountant’s Guide to G.J. Gardner Homes
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Wages are accurately reported and fully reconciled against financial records.
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Single Touch Payroll (STP) finalisation is completed correctly at year-end.
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WorkCover declarations and premium adjustments are submitted accurately and on time.
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Key Performance Indicators (KPIs)
Home Warranty Insurance
The Franchisor assesses the following primary financial KPIs:
Accountants need to be aware of home warranty insurance financial reporting obligations. While these vary from country to country, state to state, accurate financial data plays a crucial role in achieving insurance, increasing insurance coverage, and meeting annual reporting obligations.
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Finalised Job Gross Profit Margin (%): Calculated as the total revenue claimed on a job, less costs attributed to that job using a cost centre and job number in Xero at the time of finalisation, divided by the total amount claimed. Target Range: 19%-25% (unless special circumstances apply, such as display homes).
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Gross Profit Margin (%): Revenue (claims revenue plus WIP adjustments) less direct costs (COGS), divided by revenue. Target: Maintain 19% -25%
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Opex % of Revenue (%): Operating expenses (excluding depreciation and interest) divided by revenue. Target: 10% - 12%.
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EBITDA Margin (%): EBITDA divided by revenue. Target: 8%-10%.
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Working Capital Ratio: (Cash + Accrued/Unearned Income + Accounts Receivable + External Funds) / Total Current Liabilities. Target: At least 1:1 ratio.
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Fixed Opex Cash Cover: (Cash + Accounts Receivable - Accounts Payable + External Funds) / (Last quarter’s operating expenses / 3). Target: 6 months of cash cover.
This is a vital part of running a building company and should be incorporated into the regular review process with the franchise builder. The accountant must be an active part of this process, working alongside the builder to evaluate outcomes and plan for current and future insurance requirements.
Display and Spec Homes Display and spec homes involve specific financial treatments, including monthly cost capitalisation, tracking construction costs, and asset reclassification. Please refer to the Display and Spec home guide Finance Support Details Email: ft_ finance@gjgardner.com.au Australia Support: +61 7 5208 9181
Accountant’s Guide to G.J. Gardner Homes
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