In the competitive restaurant world, owners have to understand both the operational and administrative activities of their business. Among the most important administrative activities is restaurant accounting, which involves the collection, reporting, and analyzing of financial data. To meet the rising demands for accuracy in financial information, restaurant accounting software is essential in the running of a modern-day restaurant.
While most people understand the importance of technology in increasing efficiency, not everyone understands how to choose the right technology for their business. This ultimate guide to choosing restaurant accounting software will explain:
- Why you need restaurant accounting software
- The best type of restaurant accounting software
- Popular accounting software for restaurants
- How accounting software makes your work easier
- Key considerations when choosing restaurant accounting software
- Purchasing restaurant accounting software
Why You Need Restaurant Accounting Software
Restaurant accounting software helps restaurant owners and their accountants to stay on the same page. When integrated into a restaurant POS system, the software automates the collection, organization, and reporting of financial data. This means that you can use your accounting software alongside the POS system to keep a close eye on your financial performance at any time. Using a tool like Sourcery, you can easily integrate accounting software with your current restaurant management system (POS). The tool allows the sharing and transfer of data between the two systems for accurate accounting processes.
Good software will eliminate the effort, time, and wide array of errors associated with the manual accounting process. It automatically tracks and manages expenses, income, invoice payments, payrolls, tax information, and other financial data.
The Best Type of Restaurant Accounting Software
The best type of restaurant accounting software to choose for your business is online or cloud-based. Most of the big brand-name products offer specialized modules with special features for restaurant accounting. Such software will help streamline your accounting processes and help your business in the following ways:
- Time and effort saved with automation: Since you can create automatic workflows and reports, your accounting time and effort is greatly saved. You do not have to spend a lot of time keying data manually into the system.
- Improves data accuracy: All the financial information of your business is stored in the same place in an automated process. This way, the software lowers the risk of costly and inherent accounting errors related to manual data entry.
- Easy access to financial data at all times: Cloud-based software provides data that can be accessed anywhere and anytime via the internet. You do not have to stay locked in your office to study your financials.
- Provides real-time data: The data provided by the software is real-time and represents the financial status of your restaurant at any given point in time.
- Improves Collaboration: Since the software is accessible by anyone in the restaurant via web, you can collaborate with your accountant and other staff members for proper financial keeping.
Popular Accounting Software for Restaurants
You can choose accounting software for your restaurant from several vendors offering such services. Some of the most popular accounting software among restaurants include:
- QuickBooks for Restaurants
- Dynamics GP
How Accounting Software Makes Your Work Easier
The role of accounting software is to organize and track your business financial information. When properly integrated into your restaurant, the software allows you to set your financial goals, determine areas with highest expenses, and where you generate most of your income. But how do you choose the right restaurant accounting software?
Key Considerations When Choosing Restaurant Accounting Software
With so many accounting systems to choose from, it is usually challenging trying to choose the one that fits your business needs perfectly. Deciding the right software for your accounting needs is crucial in ensuring your accounting process is accurate and represents the true financial status of your business. Before you choose one software over the others, consider the following crucial steps:
- Conduct Sufficient Research
Most people detest research or spending hours looking for information with no tangible results in the end. No matter how awful research may sound, it is a crucial step in finding the right accounting software. It will answer most of your burning questions and give you a picture of the kind of software available in the market.
Think of the needs of your business, your restaurant considerations, the kind of accounting processes you want the software to accommodate, and just what will work best for you. Try to think about the future, and what installing accounting software will mean to your restaurant. Good research will also allow you to explore the prices of the options available, and the most important features that accounting software should have.
Part of your research should be on what current accounting software users are saying. You can use sites like Better Business Bureau, Complaints.com, TrustRadius, G2Crowd, and ConsumerAffairs to find out what customers are saying about particular accounting software. Any negativity bias in customer reviews can raise eyebrows regarding the usability of the software. Customer reviews can be a powerful tool in determining the reliability of the vendor, any bugs or problems that you are likely to face with the software, and the kind of customer service to expect. You may also find advice and tips on better ways of installing the software..
- Think of the Size of Your Business
The size of your business determines the amount of accounting data to be processed at any given time. It also determines the accounting functions that you need to consider when choosing software. For instance, accounting software with payroll functionality may be ideal for a large business with multiple employees as opposed to a small business. You will also want a software that does not limit the number of customers or transactions that can be entered at any given time.
If you are running a small restaurant, you also need to think about scalability and whether the software selected will still be effective with a growing business. You want software that will grow with you and provide smooth operations, even with an increase in activities. Look at the additional features and subscription options to ensure that the package you choose is scalable.
- Consider the Features Your Restaurant Needs
Functionality is a critical deciding factor when choosing restaurant accounting software. Apart from thinking about the size of your business, you also need to figure out what accounting elements you want to automate. In other words, who do you want the software to do for you? Some of the features that you may consider before purchasing include:
- Supplier Invoicing
- Tax capabilities
- Bank recollection
- Financial reports
- Inventory Management
- Sales tax capabilities
- Multi-currency functions
As you consider these factors, think of what your restaurant cannot do without. You will want to have accounting software that covers all the necessary aspects of your accounting processes.
- Your Accounting Software Budget
Your budget for buying restaurant accounting software will probably be the first thing you consider, especially if you own a small business. You need to determine the amount of money you are willing and able to spend to purchase the software and pay for a monthly subscription. If you have a big restaurant business, you will need software with more features. This means that you will have to spend more to get all the features that you desire. Your budget should guide you into choosing which features you can overlook, and how much you are willing to lose to acquire the right accounting software.
- Your Restaurant Accounting Method
When choosing restaurant accounting software, select one that matches the accounting method that your business uses. While most restaurants use an accrual accounting method, you could be using a cash-based method. This is where accounting records are made when a product or service is paid for. On the other hand, accrual accounting method involves recording accounting information when transactions occur rather than when payment is made. Therefore, consider the method that your business is using and choose a software that aligns with the method.
- Your Familiarity with Accounting Concepts
How familiar you are with accounting concepts is a key consideration when searching for restaurant accounting software. Even if you choose a software that saves you huge amounts of money, it may not be doing you any good if you will be wasting hours trying to make sense of the reports provided by the software.
If you are fairly knowledgeable about accounting, you may consider purchasing advanced software. Make sure you choose software that uses the accounting terms that you understand and are used to. However, if you are a novice, starting with basic software with scalability may be good. Your main concerns may include whether the interface is simple, the language is understandable even by a layman, and it has all the necessary tools and resources to help you understand the accounting language.
- Integration with Your Restaurant POS System
Apart from making sure that accounting software you choose is cloud-based, also ensure it integrates seamlessly with your POS system. The software should work perfectly with your POS allowing easy transfer of data between the two systems. Also look into the add-ons provided by the vendor like inventory management, payment integrations, and connections with the back accounts.
- Data Security Guarantee
The accounting software that you choose for your restaurant business should provide data security. Since your data will be easily accessible on the cloud, the software should have a way of protecting it from unscrupulous parties. Features such as automatic backup, Secure Socket Layer (SSL) encryption, and secure data-housing facilities are critical in ensuring data security.
- Provision of a Mobile App
The provision of a mobile app may be your deal breaker if you are looking for accounting software that you can access at anytime from anywhere. A mobile app means that you can access the cloud-based software anytime you want to review your restaurant’s financial status. Check the Google Play Store and iTunes to find out about subscription fees and reviews about usability. Restaurant accounting software that comes with an app will provide you with more flexibility in your accounting processes.
- Presence of Customer Support
Customer support is important in making sure that the software is fully implemented in your restaurant. It can also be helpful to those who lack accounting knowledge or experience to ensure they understand how the system works. Consider whether the vendor provides phone, email, or live chat support. Find out whether the software comes with guides or tutorial videos to guide you through the process of setting up the software or explaining the features. A vendor with an active Facebook page or Twitter Account may also demonstrate that they provide fast support services to their customers.
Purchasing Restaurant Accounting Software
Once you have considered all the important factors, it is now time to make a choice. Your choice should be based on the idea of the type of accounting software that will suit your business needs. With all the results that one gets when they search for accounting software, you may not understand where to start. You can use several approaches to ensure the software that you choose is the ideal one for your business.
First, check out restaurant accounting software reviews to find out what others are saying about the software. Second, talk to other restaurant owners and managers to find out what they are using and how effective it is in meeting their business needs. Third, talk to your accountant to find out which software they recommend or what they think about your software choice.
Only after you are confident enough about your restaurant accounting software choice should you go ahead with the purchase. As you choose a software, consider its downsides and how you will deal with them.