Stow your laptops and fill your coffee mugs, today’s lesson in runing a restaurant requires a lot of attention. Even though it sounds like a “duh” subject, many restaurants that serve great food and present fine service fail because they got the wrong bean counter. Miss Amy? Go.
“Site selected – check. Permits approved – check. Menu written – check. Wait staff trained – check. Accountant hired – well, not yet. Whoops!”
Operations are, of course, the primary focus of a good restaurant, but being a good business person means taking care of the money, and hiring the right person to help you do it. Vendors and the Taxwoman hate not getting paid on time, and nothing gets around the restaurant community faster than the news that employee checks are bouncing. These events can drain funds, energy, and goodwill from a business. From the correct way to report tips and tax credits on your 1040, a good accountant can save a restaurateur big money. By working out the scope of your needs before opening, you can set your plan and stay in control of your finances throughout the harried, scary, wonderful first months of being open. (Jump for the best part.)
Large restaurants and chains have accounting people on staff, but small restaurants have to juggle. Payroll services ensure your business’ payroll taxes are paid on time, prepares quarterly reports and W-2’s, and handles IRS correspondence. Get one that specializes in restaurants, they can provide you with valuable reports on tips that you will need to send to the IRS annually. Some services can link up to a restaurant’s POS [point of sale] system and allow for a direct download of employee time information, but don’t assume the information sent doesn’t need to be reviewed. A friend used this method, and later learned that her employee overtime hours were being miscalculated (not in her favor)–to the tune of 30 hours per week.
Bookkeeping companies can perform duties that an owner does not have time or experience to tackle but need to be done. Bills and taxes must be paid, credit card inquiries responded to, bank accounts reconciled, financial statements prepared–you can farm out as much or as little as you want. I do our business’ bookkeeping using a popular, inexpensive accounting software, it’s easy to use and our CPA also uses the same so data transfers are sent via email. But if you’re opening a restaurant and you aren’t familiar with the software or procedures of bill paying, don’t trust it to an employee who doesn’t know what to do, contract it out to someone who does until the rhythm of your business settles down.
Accountants are trained to “read the numbers”, helping spot problems that an owner might miss; gradually increasing credit card fees, product costs, irregularities with inventories. Even better, he/she can save you taxes by knowing the intricacies of income, franchise, sales, property, payroll and gross receipts taxes.
And if you’re not someone who tackles your personal checking account with vigor each month, you really should have an outside party review your business’, even if you have an in-house person handling the money. More than one business owner has skipped this step, only to find out that their “trusted” employee (or partner) has been living an enhanced lifestyle at their expense.
None of these services relieve an owner from seeing that the everyday financial events are handled correctly at the restaurant. Clock punches should be reviewed daily, as should sales reports and credit card settlement statements. Service staff will expect their tips each day, so buy a safe and keep petty cash and the checkbook in it. Regardless of who is handling disbursements, you are the final reviewer when you sign each check–take a moment to make sure it’s correct.
Financial mistakes will happen, like an employee forgetting to punch the clock, or accidentally paying an invoice twice, but the goal is to have a system that catches and corrects those mistakes. And making these steps a daily habit will save an owner time and money.
“Bank accounts opened – check. Checks ordered – check. Safe installed – check. Petty cash counted – check. Good accounting system – check plus.”