Restaurant accounting is more than adding up receipts and subtracting expenses. Restaurant accounting provides restaurant managers with prompt information to make better decisions and necessary adjustments, whether it is staff scheduling, pricing or ordering inventory. It reveals problems such as theft or employee mistakes. Accounting software, whether integrated into a POS system or not, speeds up the process so that a restaurant manager sees what is happening as it happens.
Restaurant accounting software helps to simplify and expedite many common restaurant management functions, and these accounting programs can work seamlessly with point-of-sale systems or provide alternatives to them for budget-minded owners and managers. Some POS software offers only limited accounting benefits, which critics might compare to souped-up cash registers. Some restaurants only need the basic figures because they hire payroll services, tax accountants and other consultants to make sense of the data. Some entrepreneurs with backgrounds in accounting and finance can handle their own accounting through specialized programs. Enterprising restaurateurs can even design their own spreadsheets for keeping records.
If you’re like most owners, you’d prefer to run when anyone mentions accounting, forms and records. The restaurant business is a hands-on, sociable enterprise, and very few owners or managers enjoy sitting behind a desk. Fortunately, specialized restaurant accounting software provides intuitive features for busy managers, kitchen staff and payroll-keeping personnel by taking on such diverse tasks as generating automatic costing analyses, managing inventory, updating wholesale prices and providing information that helps you with other tasks, such as making work schedules, menu engineering and changing suppliers.
All restaurants function in two worlds: first as arbiters of good taste, culinary trends and social interaction. The second and most critical function of restaurants is to make money, survive and grow. Restaurant accounting systems help to reduce losses, cut waste, control cash flow and enable accurate reporting to government agencies.
Owners need access to key real-time accounting information. Sales and expenses are critical to profit and survival because most restaurants run on thin profit margins. Managers and owners need to recognize negative trends quickly and address the underlying problems to stay afloat.
Similarly, longer term financial assessments guide bigger picture decisions. High food costs, excessive payrolls and business retrenchments could kill a company’s chances for success. Estimating operating capital is a complex guessing game, but restaurant accounting software helps management recognize business patterns and make good guesses. Good accounting not only identifies problems but also helps to increase profits by rooting out waste, theft and inefficient practices.
Restaurants managers bear heightened responsibility for handling cash transactions and reporting income honestly, accurately and responsibly. Identifying employees who might be pocketing extra cash presents genuine problems for many restaurants. Software helps to identify irregularities and keeps accurate records of all expenses, inventory additions, credit-card sales and cash transactions.
There are many ways that accounting software crunches data. Advanced accounting systems can handle timekeeping, payroll, report-generation tasks and tax-compliance issues.Your accounting system can detect errors and prevent routine audits and fines.
Accounting software streamlines reporting and increases accuracy. Restaurants with shareholders have fiduciary responsibilities to report all financial information in regular profit-and-loss statements, so a strong accounting system is mandatory. Various reports get filed with local, state and federal taxing authorities, insurance companies, city health departments and unemployment agencies. Any of these organizations could order audits of the books at any time, especially if the reports contain calculation inaccuracies.
Many brands of software help to empower restaurant operations by working seamlessly with POS systems, managing dining-room flow and automating inventory and ordering tasks. Specialized ERP software handles many common restaurant functions. Popular brands of ERP software include Made2Manage, LogiXML, VAI Enterprise, SYSPRO ERP, Consona Corporation software, Epicor Software Corporation and others. Microsoft and Quickbooks offer restaurant accounting software that works for medium-size restaurants, but many people find Quickbooks POS systems difficult to learn.
Your accounting system doesn’t operate in a vacuum, so you should choose a system that integrates with your other systems and pulls data directly from them. That way there’s no risk of human error when transferring figures. You save time and money when everything generates automatically, just like orders in your polished server/kitchen staff interface. Your system should at least offer the following capabilities:
You can choose from hundreds of software manufacturers and use almost any accounting program to improve restaurant operations, but custom restaurant accounting software offers more intuitive tools that manage common restaurant tasks efficiently so that you don’t need to make adjustments.
Regardless of your choice, you should hire an experienced accountant to handle your taxes because he or she can offer tax-strategy advice, take advantage of tax incentives, provide investment assessments and identify unique business opportunities. Software and reports need human scrutiny and auditing to identify problems caused by inaccurate input or deliberate efforts to mislead. Accounting software can play a crucial role of helping an owner manage a restaurant, making the business run more smoothly and efficiently.