As a restaurant owner, your fortè is most likely not related in any way to bookkeeping. Additionally, employing someone is pricey and comes with other costs besides a salary. From health benefits to unemployment taxes, keeping a full-time in-house bookkeeper equals more than you want to spend.
Conversely, financial accountability is the most important aspect of ensuring your restaurant is always secure and in compliance. So, how do you meet your busy restaurant's needs and keep up with the ever-changing, all-consuming tasks of bookkeeping?
What Needs to Be Done?
According to the U.S. Small Business Administration, around 50% of small businesses close within five years, and poor financial management is the number one cause. It is overwhelming and time-consuming to track restaurant expenses, income, inventory, payroll, etc. This often results in falling behind and making mistakes. The IRS frowns on both of these. Here is a list of tasks that must be done daily, weekly, or monthly to stay up-to-date on your restaurant's bookkeeping
- Track daily sales through cash and credit transactions. While this can be done manually, there are many ways to streamline this process through integration.
- Paying and tracking vendor costs is also easier when using an automated method.
- Inventory is vital to knowing your company's expenses and meeting the needs promptly. Nothing is more frustrating and possibly damaging than running out of what you need. Customers are not patient when it comes to food!
- Effective and efficient payroll processing is essential to attracting and keeping good employees. Additionally, this is another place you don't want to make mistakes or not pay your taxes on time, as steep fees and penalties add up quickly.
- Monthly bank and credit card reconciliations help to identify how much money is available and prevent unidentified errors from snowballing.
What is Outsourcing?
The short answer is that you switch the vast majority of the financial responsibilities to an expert employed by someone else. You can choose how much responsibility goes to someone else and how much responsibility you keep.
If you are strapped for time or don't know much about bookkeeping or bookkeeping software, outsourcing allows you to regain your time and provides a much safer way to maintain your company's books.
How Outsourcing Saves Time and Money
Outside of the obvious time recouped by someone else doing the books, there are other ways that restaurant owners experience a savings of money and additional time savings. A few of these include the following:
- Trained and experienced bookkeepers will catch eligible expenses for tax write-offs that you, as an owner, might miss. Tax time is much less stressful and you can rest assured that all your financials are ready when needed.
- Outsourcing means your books are always up to date, so no late fees, penalties, or interest charges occur.
- Payroll taxes are confusing and tax laws randomly change. Outsourcing payroll means no more worries about getting it wrong or missing new laws. It is also helpful with mandatory withholding like garnishments, which is sometimes a complicated but necessary evil.
- Access to reports that assist with understanding what is working and what isn't in your business is essential to growing and improving. Outsourcing gives you a better picture of where you are at any given time so you make good business decisions.
- Fraud is a damaging and costly part of the cash-heavy restaurant industry. The more in-house employees you have handing the funds, the more chance you will miss fraudulent activity. Outsourced companies hire only the best and perform extensive background checks to provide the services you need safely and honestly.
- Outsourced employees are familiar with the best accounting practices, so your company is in compliance with current standards. This is especially helpful when applying for a loan or seeking investors.