Outsourced Accounting for Restaurants: The Secret Ingredient for Success

Improved cash flow management, forecasting, and operational efficiency are among the advantages outsourcing their accounting and finance functions offers to restaurant operators.

Under an outsourced accounting arrangement, a restaurant company gains the experience and knowledge of a professional finance team without having to invest in full-time staffers or spending time learning specialized software platforms.

The outsourced team takes on the company’s daily finance and accounting tasks such as:

Outsourced accounting allows management to tap into professionals with restaurant-specific experience who can unlock insights hidden in performance data.

This professional help allows restaurant operators to focus on running their stores, building their business, and concentrating on the hospitality-related tasks they enjoy most.

Many growing restaurant companies quickly recognize the importance of effective financial management—as well as the challenges of trying to do it yourself or with the help of a well-intentioned friend or family member.

In addition to understanding how much cash flows into and out of a restaurant, operators also need to monitor critical factors including labor and ingredient costs, and other important performance metrics.

Outsourced accounting is more cost-effective than spending money on fulltime staffers that, even for an operator with two or three locations, you don’t need. Rather than paying fulltime salaries and benefits, you can purchase the right level of accounting talent for your company today, freeing up vital cash for other areas of your business.

Managing cash flow effectively is a common challenge for restaurant operators for several reasons. For instance, each location receives almost-daily deliveries of ingredients, linens, and other essentials. Many of these deliveries come with two- or three-day payment terms. The operator needs the ability to understand how much cash is coming in and the agility to make payments quickly.

A professional finance team can also support the restaurant with accounting software that makes forecasting and reporting much easier than would be possible with spreadsheets or general-purpose small-business software. Financial management software can improve efficiency and streamline operations by automating account reconciliations and identifying transactions that may indicate financial fraud.

To learn ways to improve your accounting software, read our article “Assembling a High-Performance Restaurant Tech Stack”.

The outsourced accounting team will be able to analyze your restaurants’ performance data to help you understand the factors driving performance. It’s one thing to know you can pay tomorrow’s bills, but it takes operators to a different level when you know details such as the percentage of your expenses devoted to ingredients, or how your front-of-house labor costs compare with those in the back of the house. Understanding these details help operators identify issues and make necessary adjustments to course correct before issues become problems.

In many cases, restaurant operators are collecting data from their point-of-sale (POS) systems and invoices. Unless their finance team analyzes that data, valuable insights that can unlock performance improvements will go unnoticed and management will rely primarily on instinct.

Accounting professionals can also help with detailed forecasting and trend analysis to better understand how costs and profitability can vary by location, day and time, season, and other factors. Your outsourced finance team can go beyond reviewing actual spend to develop budgets and forecasts. Management can also compare the likely outcomes of different scenarios, such as adjusting staffing levels, launching promotions, or increasing menu prices to obtain desired revenue and profitability

To learn more about the performance and profitability benefits outsourced accounting can provide restaurant operators, contact us.