Removing roadblocks to restaurant efficiency can be an ongoing process. Whether it is improving tracking measures, investing in a POS, modernizing vendor payments, or something else, taking away the inefficiencies can help owners and managers exceed industry benchmarks, free up focus for customers and growth, and create an easier path to sell when it’s time.
The greatest roadblock to restaurant efficiency is lack of tracking. We know this can seem daunting to owners who prefer to focus on food and customers, not numbers. Also, many successful restaurant owners and managers are rightly focused on sales and may feel they don’t have the time or budget to set up a tracking system.
Another roadblock used to be the cost of point of sale (POS) systems, which could run hundreds of thousands of dollars. Now these solutions cost a fraction of that and can often be implemented for a monthly subscription cost. However, owners and managers are often unclear about the hidden costs in the current systems they use and can’t see the justification for a POS system.
Just consider: anyone who is still paying bills by writing checks by hand may not realize this can cost $5-8 per check. Frequently, people forget to factor in some of these elements:
- Time to write each check
- Time to process it
- Paying for a stamp and envelope
- Time to file the record
Check writing and more can be done in seconds with an online solution. A tool like Bill.com allows owners and managers to quickly see the status of their books and pay bills from any location. Time spent with a cumbersome bill paying system could be better spent optimizing processes, creating new dishes or delighting customers with personal attention.
We also see restaurant owners who have a good POS system, but are not leveraging the report capabilities of that system — or have not integrated with an accounting solution. Working with a restaurant accountant can give you access to people who know the kinds of restaurant accounting software that easily integrate with popular POS systems. Some firms will even set it up for you.
Lastly for startups, a major roadblock to efficiency is the potential debt to bling out the restaurant and make it attractive to potential customers. It looks great, but monthly rent or depreciation can go through the roof. Instead, project sales per square foot in order to select a right-sized location and budget for build-out, fixtures and décor.
Advances in computing support efficient restaurants
These days it’s easy for restaurants to be set up with cloud computing solutions 
that support paperless reporting. Historically, owners and managers couldn’t see the whole inventory at any point in time, but this is now possible. With cloud solutions and current POS systems, you can know exactly how much inventory has been used and what should be on hand. In addition to reducing food waste, this can be a key indicator for spotting theft. (See our article “Protect Your Restaurant from Employee Embezzlement” if this is a concern for you.)
A powerful accounting software solution promotes a streamlined back office, which enables owners and managers to be customer facing. This takes away the worry about end-of-shift backlogs of paperwork. You can check in with staff and customers and get a pulse for satisfaction or improvements. Restaurant accounting systems should be designed to help improve, not hinder success. They should make it easy to review the entire financial picture every month.
Multiple locations and selling a restaurant
The better the accounting and corporate governance of any restaurant, the stronger position it’s in for expansion or selling. For restaurant owners using a system in which POS and accounting are linked and automated, they’ll find accounting to be much more timely and therefore cost-effective. When there are many locations and different investors for each location, this kind of system can easily produce K-1 forms and other necessary information for each investor.
A restaurant is worth what the buyer is willing to pay for it. If records are being kept on paper and must be pieced together to provide information to a buyer, this bogs down the sales process and makes it hard to show the real value of the restaurant. If there is an automated system in place, however, it’s a much quicker process to show potential buyers the numbers in ways that are clear and easy to understand. This helps tremendously with all steps in a sale, from getting a buyer interested to the final transfer of the restaurant to new ownership.
Restaurant accountants know the techniques that help restaurants be more efficient. We know the benchmarks discussed here and we’ve helped other restaurants reach them. If you have a serious interest in making your restaurant more efficient, talk to the accounting team at Cornwell Jackson. You’ll be surprised what a difference it can make in your efficiency, bottom line and peace of mind.
Restaurant accountants know the techniques that help restaurants be more efficient. We know the benchmarks discussed here and we’ve helped other restaurants reach them. If you have a serious interest in making your restaurant more efficient, talk to the accounting team at Cornwell Jackson. You’ll be surprised what a difference it can make in your efficiency, bottom line and peace of mind.
Scott Bates, CPA, is a partner in Cornwell Jackson’s audit practice and leads the Cornwell Jackson business services practice, including outsourced accounting, bookkeeping, and payroll services. He is an expert for clients in restaurants, healthcare, real estate, auto and transportation, technology, service, construction, retail, and manufacturing and distribution industries.
