Restaurant Accounting: The Critical Capabilities Your System is Missing
Restaurant operators and managers face many critical challenges throughout the day. From scheduling employees and ordering inventory to monitoring vendor charges and signing contracts, operators are often bolting on additional systems to their existing technologies in order to achieve specific functionality.
For many restaurateurs, juggling multiple platforms—or even using one generic software that doesn’t quite integrate all the necessary data—can become yet another hurdle in the day-to-day operations of running a successful business. In order to consolidate those processes, forward-thinking operators are implementing restaurant-specific accounting systems, which help to manage the company’s operations through a streamlined system.
“Every business uses an accounting system of some sort, and every dollar should end up there,” says Tony Smith, CEO of Restaurant365. “For a tight-margin business like restaurants, it’s even more critical to account cleanly. For example, if you buy a can of beans, there’s accounting involved. If an employee clocks in—or forgets to clock in—there’s accounting involved. If you hire a musician to entertain customers, there’s accounting involved. It all needs to come back to your books.”
By implementing an accounting system that is specifically designed for restaurants, operators can ensure that managers have access to the information they need to make decisions in real time. In addition, a true all-in-one accounting system is more useful for restaurants because it monitors inventory, pays vendors, reconciles bank statements, tracks fixed assets, forecasts scheduling, and produces financial statements.
“It’s very powerful to have all of those things connecting back to the same system at the end of the day,” Smith says. “Analyzing the profit or loss of a restaurant requires getting every piece of data that has a financial impact into your system and into the hands of unit managers.”
For example, it can be difficult for multi-unit operators using a generic accounting system to see if a certain vendor is billing above the contracted price or pinpoint specific ingredients that might be leaking money due to someone over-portioning a recipe. With a restaurant-specific accounting system such as Restaurant365, however, operators can view this information at a glance—and receive alerts whenever a line item doesn’t add up.
“Restaurants are unique in the way they account for inventory, compared with a business that sells bikes or widgets,” Smith says. “An all-in-one accounting product provides functionality by monitoring inventory in real time.”
According to Smith, most financial accounting systems focus on monthly or fiscal periods which provide a comprehensive breakdown only at the end of a particular cycle. But in restaurants, where the week is so important and sales for a month which has five Saturdays can be drastically different from a month that only has four Saturdays, it’s much more important to compare data on a weekly basis by using an integrated, restaurant-specific software.
“You need systems that tell you in the moment, in the day, what’s happening,” Smith says. “By adding technology that provides better visibility and guidance, operators can greatly increase efficiency and tracking in their restaurants, and also reduce the amount of time employees spend on those tasks—allowing them to focus more on what they do best, which is providing great service to customers.”