People love food, and if you’ve found a way to convert that passion into a career as a restaurant owner, congratulations! You bring joy to people every day, and that’s a rewarding feeling. But we know that what customers see out front is a far cry from the chaos in the back. Managing the finances for restaurants can get complicated and put a damper on your love for the business. Not to mention, that if you’re not working with an accountant trouble may be looming. The good news is that accounting services for restaurants in Minneapolis can help you stay on track.
Restaurant Management Challenges
Restaurants have many unique challenges to overcome if they want to stay in business.
Small Profit Margins
The restaurant industry is known for enticing customers with prices and promotions to get them in the door and away from competition around the corner, leaving them with razor-thin profit margins. You need calculated precision in all levels of management to make any money at all.
Do you monitor the kitchen trash? Do you run out of specials on certain days? Monitoring daily inventory, reordering appropriate quantities, and reducing waste are especially important for restaurants.
Labor Scheduling & Costs
Scheduling hours so that tables are full, customers receive great service, and staff aren’t standing around is a never-ending headache. Short-staff to cut costs and you risk poor service, bad reviews and fewer customers to follow. Over-staff to compensate and you’ll be out of business even faster.
Health Care Expenses
The Affordable Care Act has been around for awhile now, but it doesn’t make it any less challenging. If you have 50 or more full-time equivalent employees you need to offer health care in compliance with the law. Part-time staff count as a fraction of one, so get your calculator out and start counting.
Payroll For Tipped Employees
Tips are most prevalent in the restaurant industry, and thus are watched closely by the IRS. Tips must be reported and added to an employee’s income, and employers receive a tip credit incentivizing them to report. A restaurant without a proper system may miss cash slipping out the door.
Cash Flow Fluctuations
Thanks to small margins, constant inventory turnover, and large payroll, restaurants are always at risk of a bad month ruining their year. Consistent customers are no guarantee, and eating out is often one of the first expenses people cut when money gets tight. Owners need a plan of action when revenue drops, including establishing lines of credit in advance, reducing menu options, and laying off staff.
Accounting Services for Restaurants
Restaurant owners need tailored financial statements to dig into precise details. Restaurants with multiple locations need both consolidated and location-specific financial statements to monitor the business as a whole and dig into details.
Food and liquor margins are a big deal. They should be informing major decisions, such as what items you feature, how much you charge, and how often you restock. Without actual results to analyze you may be losing money on your favorite items. An accountant can help you categorize these costs and consult with you as you grow, offering advice such as, “Do you need to carry 10 different brands of Vodka?” or “Have you thought about raising the price of your special 5% to compensate for your rising food costs?”
Accountants love setting up organized systems. You need all locations producing the same data that can be compiled and compared. With standardized reporting, delegable tasks, and expert advice, you have the power to make informed decisions on a company-wide or location-specific basis.
Outsource the headaches of payroll to the pros, and never worry about rates, withholdings, and garnishments again. With possibly hundreds of full and part-time staff, the job is too recurring and complicated for an owner tasked with running the whole company. Utilize a payroll service‘s 24/7 online employee access and remove yourself from paystub and W-2 requests too!
Tax Planning & Preparation
Restaurant owners have a complicated job before considering the complexities of the tax law and all of the opportunities available to them. Work with an accountant that’s considerate of your cash flow concerns and plans ahead so you know your potential tax liability six months before the April 15th deadline. Discuss future plans and purchases, and consider special depreciation to reduce your taxes now!
Working with Haworth & Company, Ltd.
We love food, and we love working with restaurants! If you own a restaurant in Minnesota, especially in Minneapolis & St. Paul where the laws only get trickier, check out our services and give us a call. Outsource your accounting and payroll responsibilities, build a relationship with your very own personal business advisor and tax expert, and implement systems to control the chaos and save money! We’ve worked with every kind of operation, from ice cream stands to multi-location franchises, and would love to help you succeed too.