As a restaurant owner, you must be aware that handling a diner is not a straightforward job. Reports show that nearly 60% of new dine-ins close within a year of launch, while 80% often shut down in five years. Even though there are a bunch of reasons behind restaurant failure, one major reason that cannot be ignored is poor cash management.
Most restaurant owners may not be financing experts, making it difficult to track profits and income flow. This leads to losses and causes owners to shut down their restaurants eventually. In-house accounting can be expensive, so most owners are now focusing on restaurant accounting services. Below, we explore outsourced bookkeeping and whether it’s worth the investment.
What Does Restaurant Accounting Cover?
Restaurant accounting covers financial data interpretation, analysis, and recording. A professional accountant is responsible for the following:
- Recording all financial transactions in a master ledger
- Categorizing all transaction types
- Analyzing entries and the ledger thoroughly
- Keeping track of accounts payable, which includes paying vendors and processing invoices
- Handling financial statements, cash flow statements, income statements, balance sheets, and bank statement reconciliation
- Setting a budget
- Tracking performance and ensuring goals are met
- Creating benchmarks KPIs like Cost of Goods Sold (COGS), and prime costs
- Auditing and offering financial help
- Helping with tax returns and filing
A good accountant will ensure your restaurant’s financial health by keeping track of profits, losses, statements, and related metrics. With their help, a restaurant owner will have the proper cash flow to cover restaurant, labor and food expenses without going into loss.
Why Invest in Restaurant Accounting Services?
1. Helps Save Time
Accounting services offer professional restaurant accountants that can help you save a good amount of hours spent on bookkeeping each week. They accomplish this in the following ways:
- Professional accountants are trained to effectively bookkeep and record menus, staff, and finances in a shorter time than an untrained restaurant owner.
- Accountants use digital software and tools instead of manual methods to track payments, invoices, and other expenses. This also reduces tracking time.
- Updated books and professional records can help generate insights, graphs, and charts that help owners make the right business decisions. This eventually saves time, energy, and added costs.
2. Work With Experts
Outsourcing bookkeeping services means working with experts that a company has selected and properly trained. These professionals have years of experience and have often worked with businesses similar to yours, which makes them an apt choice.
By working with them, you not only get foolproof financial advice, but these accountants will help refine the financial information of your restaurant to make it more insightful. They will organize bookkeeping, track records, manage taxes, digitalize the process, and, most importantly, help your restaurant flourish.
3. Ease Tax Management
Depending on the services you pick, your outsourced accountant may or may not interfere with tax preparation. However, what they surely do is keep detailed records which makes filing taxes much easier when the time arrives. The best part is that they also follow the Generally Accepted Accounting Principles (GAAP), which will ensure fewer mistakes and errors during tax filing.
4. Prevent Fraud
Since most restaurants are cash-heavy businesses, it is quite likely for them to come face to face with fraud. Hiring an accountant that you do not trust or one who seems sketchy is a bad idea since they will have access to your cash flow and financial information.
Outsourcing bookkeeping services from a reputable organization eradicates all these issues. Most will also be willing to back you up if there is a mistake on their part. A professional accountant will not only be easier to trust, but they will also look out for fraudulent activity by keeping a check on rivers and vendors. They will immediately bring risks to a restaurant owner’s notice, so restaurant growth remains unhindered.
5. Smarter Payroll Management
Payroll management is a huge hassle for businesses, and several taxes and deductions can make the entire process even more complicated. A professional accountant can help you ease payroll management by embedding it into accounting software to automate the entire process. Also, they will double-check all entries to reduce errors and save time.
6. Detailed Insights
Outsourcing bookkeeping does not just mean enjoying a professional’s expertise, but you also get to familiarize yourself with tons of accounting tools that simplify financial tasks. These tools provide daily financial reports enabling a business owner to make the right decisions. You can track profits/losses, manage balance sheets, view cash flow history, and more. An accountant can help you learn and understand these tools better so you can keep track of your financial situation a lot better than before.
- You can pick one out of several accounting packages provided by an accounting company that fits your restaurant’s needs
- You can upgrade the package as your business grows
- You will not have to train or hire new employees at any time to handle your financial situation
- You can obtain insightful information from your accountant that will allow your business to keep growing exponentially
Outsourcing accounting is not only a great choice for several reasons, but it also provides restaurant owners the security and surety they need to keep moving forward. The best part is that owners can pick their own budget, requirements, and package; they can also upgrade these as their business grows over time.