The restaurant industry is one of the most fast-paced, with endless to-do lists. While it may be exciting to own a restaurant and serve your customers, some vital tasks like doing accounts may be quite challenging. With all the factors that go into consideration, doing your accounts can be overwhelming. Even if you have a professional accountant, you still need to ensure the accuracy of the record and accessibility of such information at any time. This is where accounting software comes in to streamline and simplify the work. Let’s have a look at some of the reasons why a restaurant accounting software is good for your business:
- Eliminates Data Entry Redundancy
Entering financial data manually is a hectic affair. Not only does it take a lot of time, but it also increases the risk of human error. You will probably enter some figures twice or omit others without knowing. Restaurant accounting software eliminates the possibility of such redundancies, ensuring data entered is correct and accurate. This gives you more confidence in the financial reports generated. It also gives you the ability to troubleshoot any potential problem.
With proper organization of data, accounting software allows you to keep track of your customers. It puts all customer financial data including transactional records, credit limits, and promotions in a single location. You can also use a tool like Sourcery to derive and process data from your POS system. This means you can always access the information at any time, and even incorporate customized fields to track the performance of your business in all areas.
- Saves Administrative Time and Effort
One of the major advantages of using accounting software in your restaurant business is saving both the time and effort used in accounting processes. The manual bookkeeping process requires a lot of time and effort to ensure that every record is entered and processed in the right way. With the automation that comes with accounting software, the accounting process takes a shorter time to complete.
Both your front of the house (FOH) and back of the house (BOH) transactions are recorded simultaneously. Within the same transaction, you can write checks, create invoices, and prepare bank deposits. You can also collaborate with other staff to ensure all the needed records are available for each transaction recording. This type of automation expedites the entire accounting process.
- Ensures Accuracy of Financial Data
When restaurant accounting software is integrated into your restaurant POS system, it puts all the operational and accounting information in a single database. This means that your financial and operational data will be kept in balance, and can be retrieved at any time. You no longer have to wait for the accountant to prepare financial reports at the end of the period. The software allows you to generate reports for yourself and analyze the performance of your restaurant. Since the accounting information is readily available, you do not have to keep on going to the accounting department to ask how the business is doing.
- Helps in Setting Competitive Prices
Menu engineering is a tactic that involves balancing your revenues and costs. You need to consider the cost incurred in purchasing ingredients, paying labor, and other overheads. To be competitive in the market, set a price that is small enough to attract customers but big enough for better profit margins. As part of your restaurant accounting process, the set prices should generate adequate revenue to cover both the costs incurred and the desired profit.
With accounting software in place, the process of setting competitive prices is made easier. You can generate automatic reports with the software, and estimate the impact that different pricing levels will have on your profitability. This allows you to choose the most appropriate prices to run a profitable business.
- Provides a Faster and Simpler Way to Reconcile Your Data
In standard accounting practices, you are required to reconcile your POS data and manually post it to General Ledger. While this is a cumbersome and time-consuming process, a restaurant accounting system can automate it. Once integrated into the back-of-house system, accounting software automatically pools cash and sales data from the POS system onto the reporting module or Daily Sales balancing for reconciliation. Within minutes, this data is posted to the General ledger and the bank account, with the debit and credit entries.
The restaurant accounting software also allows you to keep more accurate estimates of inventory. If you are running a small restaurant business, taking inventory may involve someone going to the stockroom to check whether supplies are still available. As your restaurant grows and you start to sell more items, this approach may no longer be effective. A POS system helps in keeping a better track of your inventory. Accounting software, on the other hand, gives you a way of accurately tracking this information and integrating it into your accounting process.
- Gives You a Flexible Back-End System
Restaurant accounting software considers the dynamic nature of your back-end operations. What makes restaurants unique from other types of businesses is that most of the activities occur outside the conventional working hours. You could be having the highest sales during lunchtime, evenings, holiday, or weekends. This can have a great impact on your payroll and other restaurant costs.
A fully integrated accounting system will consider shifts, employee tips, and staff turnover as they occur. Such features are normally unavailable in other types of accounting software.
Restaurant accounting software provides the benefit of accessing data fast whenever you need it. In fact, the ability to access and retrieve data at-will is among the salient features of accounting software. You do not have to go through layers and rows of a spreadsheet to find out where your business stands financially. All you have to do is key-in what you want to find out and generate insightful reports. You can analyze and compare reports for various periods on the dashboard to get a clear picture of the business’ financial status. This allows you to make speedy financial decisions for the betterment of the business.
- Simplifies Auditing
Fully integrated restaurant accounting software will capture and report information from the POS system. This information is then reconciled and posted to both the banking account and General Ledger within minutes. A complete audit trail is provided from the source of information to the destination.
If you are looking at a profit and loss item, you can move along the audit trail to confirm its accuracy in the original POS transaction. This means auditing is not only simplified by the software but also expedited for faster results.
- Improves Restaurant Administration Efficiency
Since restaurant accounting software improves the flow of information, the administrative requirements and hours spent on accounting are reduced. The timeliness of accounting information is improved and the accuracy increased. You can reduce labor costs by reducing the number of staff or expand operations by hiring more staff in other departments. With a fully integrated accounting system, you do not have to hire extra staff to work on data entry tasks or confirming the accuracy of the data.
As the restaurant grows, you will face more challenges in managing the financial details of your staff. Accounting application simplifies the process making it easy to maintain a record of paychecks, taxes, and deductions of everyone in the team. The software keeps every single detail of your employees in one place, making it easy to process payroll and control labor costs. You can easily track labor costs by looking at the working hours or generating charts that show changes in the cost of labor.
The benefits of restaurant accounting software to a business can never be overlooked. Apart from automating most of the accounting processes, it also ensures that the data is accurate and reports can be accessed in real-time. It saves you time and money, offering you an appropriate and valuable way of running your restaurant business. It guarantees automation of tasks, generation of detailed reports, speedy processes, simplified data entry and processing, and reduced chances of errors.
A restaurant accounting software is without a doubt an essential part of running a successful restaurant business. To keep your business running, you need to stay up to date with your bookkeeping and accounting game. Instead of struggling to enter all the data manually in an Excel template, why don’t you invest in good accounting software to make the work easier.