Financial diligence is critical for restaurants navigating tight margins and high hourly labor costs. Implement robust accounting checks, tight inventory control, optimized staff scheduling, tax credits, and more to improve your bottom line.
Implement Layered Accounting Checks
Build redundancy into financial transactions to prevent errors and fraud. Separate transaction approval from recording so no single employee handles the entire process. For example, servers enter orders into the point-of-sale system, but managers handle voiding items.
Set up protocols for routinely verifying reported sales match deposits, reviewing for duplicate vendor invoices, and scanning for suspicious transactions. Monitor inventory usage closely for unusual spikes that may indicate theft.
Conduct flash financial audits at random intervals throughout the year, where you analyze documentation like invoices, inventory records, and expense reports. Look for discrepancies suggesting flawed procedures or misconduct needing to be addressed.
According to restaurant accounting experts, layers of validation and accountability discourage fraud and reinforce diligent reporting. Employees should understand processes are designed to protect them from suspicion as much as protect the restaurant. Streamline redundancy using restaurant-specific POS technology, automating approvals and exception reporting.
Maintain Tight Inventory Management
With razor-thin margins, restaurants cannot afford significant inventory loss or waste. Right-size purchasing levels through careful analysis of historical sales, seasons, menus, and weeks in stock on hand. Order only what you need based on accurate data versus guesswork.
Closely track inventory usage and current stock through restaurant management software synced to your POS system. Set up automatic reorder points so you don’t run out of top-selling items. But also monitor for excessive overstock of slower-moving ingredients.
Prevent loss through stringent receiving, storage, and counting procedures. Immediately log all deliveries into inventory software. Store items appropriately first in, first out (FIFO) to minimize spoilage. Use the oldest inventory first to keep stock fresh.
Design inventory controls securing items from restaurant entry to table presentation. Lock storage areas and limit access only to authorized staff. Conduct regular inventory counts checking for unauthorized depletion.
Monitoring usage patterns helps optimize menus and purchasing. Identify faster turning menu items to push while scaling back poorer performers. Minute cost differences among vendors add up when buying high volumes. Scrutinize invoices.
Leverage Restaurant-Specific Accounting Software
Sophisticated restaurant-focused accounting systems streamline financial management and provide visibility into sales, costs, and labor in real-time. Integrate your point-of-sale solution with inventory management, food cost tracking, scheduling, reporting, and accounting for one unified picture.
Choose software allowing online ordering and delivery tracking to easily manage off-premise revenue channels growing in importance. Mobile payment and contactless acceptance enabled tablets simplify tableturn and checkout without servers leaving guests.
Robust reporting provides sales totals, tax liabilities, popular menu items, server performance, overtime incidence, and other key operational insights on demand. Modern systems automate tedious processes like payroll, invoicing, and reminders, improving compliance.
Advanced restaurant tools produce financial impact modeling you can leverage to optimize everything from menu design to staff schedules. See how raising prices affects sales based on your customer demographics. Forecast whether extending hours warrants higher labor costs. Become a data-led organization.
According to industry experts, purpose-built accounting technology pays for itself through tighter controls and revenue lift generated from its use. But institute training and have a point person on staff to leverage features fully.
Optimize Hourly Staffing Levels
Carefully engineered schedules aligned to your sales forecasts ensure minimal labor waste while preventing short staffing. Excess employees during slow times drag down profitability. However, too few leads to poor guest experiences and lower customer volumes.
Analyze historical sales trends by day, time, and season. Factor in variables like promotions and holidays, driving traffic spikes. Accurately projecting volume using past data minimizes the guesswork and setting staff levels. Develop schedules around your busiest hours first, then fill in other shifts according to expected demand.
Work with your point-of-sale system to develop a sales-based labor model guiding staff needs. If each server can handle four tables on average, schedule 1 server per every four projected table turnovers. Add hosts, bus staff, cooks, and dishwashers into the model.
Refine schedules continuously based on actual volumes and customer feedback. Keep a small buffer of servers available to account for unanticipated delays. Optimize the mix between high-performing veterans and lower-cost trainees to balance productivity and wage liability.
Reduce excess labor through steps like pre-prepping ingredients during slow hours to enable skeleton night crews to power through rushes. Avoid overstaffing just to be safe – the cost certainty outweighs the potential risks from understaffing.
Take Advantage of Tax Credits
Tax credits provide valuable savings opportunities for restaurants hiring hourly workers. The Work Opportunity Tax Credit offers up to $9,600 back over two years for new hires that meet eligibility criteria – from veterans to food stamp recipients to ex-felons. The credit incentivizes giving those with barriers to employment a chance.
Claim tip credits to reduce your payroll tax burdens. Allocate tip-eligible hours to Tip Wages Paid accounting. Track employees’ daily tips to calculate your FICA tip credit each quarter. Stay on top of changing IRS tip vs service charge rules.
Deduct employee training costs, uniforms, health insurance contributions, and other eligible business expenses impacting your hourly workforce. Work with a specialist to identify often missed deductions around hiring, development, and benefits unique to hourly employers.
Prudent, annual tax planning looks at your whole picture – payroll, inventory, facilities, and other costs and liabilities. An expert restaurant accountant finds combinations of credits and deductions adding up to significant bottom-line savings. But don’t let credits incentivize unprofitable operating decisions just for marginal tax relief.
Smart financial management combining robust controls, optimized labor, and tax minimization reduces costs and boosts margins for restaurants managing hourly workforces. Make savvy finance strategies a competitive advantage.
