Most restaurant owners will tell you that their main focus is their customers, plain and simple. Without customers, restaurants have no purpose.
This can be said for almost any business, and like all businesses, owners can’t forget about the “back of the house” duties. For restaurants, this involves things like payroll, inventory, ordering, and of course, financial reporting.
Owners know financial reporting is important, but it can become a headache since they have to decide to work on reporting while the restaurant is open (taking them away from customers) or wait until after hours, which is usually not what owners want to do after working a long shift on their feet.
If you are at this crossroads, there are two main options to consider. One option is to hire a staff accountant to handle the books. The other option is to hire an accounting firm to handle your financial reporting on your behalf.
There are benefits and drawbacks to both. Let’s look at each option to help you determine the best route for you and your restaurant.
For some owners, having someone on your team where you can walk over and ask questions or clarify details on the spot gives them a sense of comfort and control. You still have an overview of processes and can tailor reports to your liking.
If you’re lucky, you can find someone who has previous experience with restaurant accounting. This person will understand the nuances of your daily sales, tip reporting, vendor relationships, and inventory challenges.
Finding someone who has experience with restaurant accounting and is a cultural fit with your business would be a win-win situation. This combination could align with your vision and values and potentially turn this person into a strategic financial advisor for your restaurant.
Adding an experienced full-time accountant can be expensive. When you add up their salary, the cost of their benefits, any training needed, and overhead associated, this cost can be significant.
Knowing the type of person you want to hire and finding that person can be two very different things, especially if you are looking for someone with experience in restaurant accounting. Throw in a competitive labor market and you may find yourself looking for that needle in the haystack.
Depending on the size and/or number of your restaurants, one person may struggle to handle all the various duties. Even if they can, how long can they do it? The restaurant industry has many ebbs and flows, and if you are thinking of expanding in the future, you may find yourself looking to add to your accounting department, which will be costly.
Many accounting firms specialize in various industries, so when researching firms, make sure you look at ones that say they specialize in the hospitality industry. This specialization brings a deep knowledge of industry trends, financial strategies, tax laws, and compliance. This extensive knowledge allows them to spot issues before they become problems.
If you are thinking of growing and expanding your restaurant business, most accounting firms can seamlessly scale as your business grows. Whether your business needs are basic bookkeeping or advanced financial reporting, an outside firm has a team of accountants to help you where and when you need it.
When outsourcing your accounting, you only pay for the services you need. No need to pay for benefits packages, office space, or downtime if your in-house accountant is sick or on vacation, just the support you need from a team of professionals.
Outsourced firms often provide access to modern accounting platforms and real-time dashboards without requiring you to license and manage the software yourself. They can also make suggestions regarding upgrades to your current systems or adding a POS system to improve your restaurant’s efficiency.
If you are an owner who likes to have instantaneous access for questions about your financials, outsourcing may not be a good fit for you. While cloud tools and communication apps help bridge the gap, you won’t have the same on-site presence or immediate access that an in-house team member provides.
It may take time to align workflows and reporting formats to your specific needs, especially if you’ve been doing things a certain way. This is also true if you hire in-house as you will have to train that person on how you like things done or specific reports or data you want presented.
Miscommunication can happen whether you have an in-house accountant or use an outside firm, but as with any external relationship, setting clear expectations and maintaining open lines of communication is key to success.
You’ve read through the pros and cons of hiring an in-house accountant and using an outside accounting firm. When you are ready, sit down and consider these questions:
If you are a restaurant focused on growth or struggling with the complexity of financial reporting, outsourcing can often offer faster relief and better accuracy. As your restaurant grows, whether in size or number of locations, an accounting firm can grow with you and be able to offer additional services that will be needed to cope with expansion.
For those who prefer close control and can afford the cost, hiring in-house may be the right call.
If you are still unsure which option is best for you and your business, a hybrid approach may be a good way to start. A hybrid approach typically involves outsourcing the bulk of your accounting while keeping a trusted staff member to oversee operations and communication.
You get the expertise and manpower that an accounting firm can provide while still having someone on the “inside” who can be a direct link for you to the firm.
Every restaurant’s situation is unique. If you want to find out more about how an accounting firm can help with your accounting functions and how the process would work, reach out to one of our professionals.
Finding the right financial partner can help get you back to where you want to be, out on the floor with your customers.
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