The hospitality industry relies on people and the human connection we all crave and get excited by when we dine out at restaurants. All that goodness is a detailed account by operators keeping close tabs on the sales mix, staffing levels, ingredient costs, vendor management, and inventory par levels, to name a few—which are critical to a successful business operation. To take control of current sales and set the business up for future success, there are some financial to-dos all hospitality operators should have on their list.
Partner with a Financial Accountant Experienced in Hospitality
Hiring a financial accountant is more than just keeping track of taxes and business expenses. An experienced hospitality accountant can serve as a strategic partner to operators. This includes working with them on business planning and new concept development, cash flow management and financial budgeting, all of which are key to understanding and managing expenses where needed and planning for the future.
In the hospitality industry, success relies heavily on relationship management; finding a financial accountant proficient in this and operational know-how for restaurants is crucial. A hospitality accountant can help establish the cadence of standard operating procedures from a financial standpoint. An experienced financial professional will also understand how finances impact operations and vice versa.
Strategize to Grow Sales, Reduce Costs
For operators, it’s important to know more than just their expenses and sales. Accountants can not only help to determine these costs but can also put key performance indicators (KPIs) against these numbers and then develop a strategy to either grow sales or reduce costs–two financial goals operators should always seek to achieve.
For sales, it’s how many guests are coming in the door and how to sell more items to the same number of guests. Accountants can work with operators to increase check averages through strategic tactics like menu planning. This may involve adjusting the price of dishes on the menu or even adjusting portion size.
Use Tech That Integrates Your Numbers Seamlessly
Just as operators need an accountant to guide them through the financial side of hospitality, they also need an experienced hospitality technology partner on their side as well. It’s important to partner with technology services that integrate seamlessly into established POS and accounting systems. Today’s technology systems should be automated and not require significant manual effort.
In addition, technology partners should have a team that can provide operators and staff support throughout the relationship. When not used correctly or efficiently, technology can create more labor for teams, defeating its initial purpose of streamlining operations and making tasks easier.
Anytime working with a new system or introducing a new system to a hospitality entity, it’s important to consider the following questions:
- How does the technology work?
- Do you enjoy using it?
- Are you comfortable using it?
- Do you get the right support if there’s a problem?
- Do you have the team in-house to support the new technology?
These questions are important to determine which tech providers will help serve as a guide for operators and provide the support needed to make their business stronger.
Use Innovations to Simplify Inventory
Food costs account for 28-35 percent of restaurant sales. For this reason, it is crucial for businesses to have efficient inventory management solutions in place. For businesses to take control of their inventory costs, operators should be not only knowledgeable of how much order costs are but also how much of the inventory is actually being used.
Keeping track of food waste, spoilage, overproduction, portion controls, and losses such as employee mistakes, spills, and theft is important in order to have full visibility of inventory. Once equipped with that information, operators can work to improve their cost of goods sold (COGs) and maximize profits on each sale.
Past and current inventory insights can help operators make critical decisions in the future to improve their operations. Tracking theoretical vs. actual food cost variation by using real-time reporting can help operators identify patterns over time and increase food costs.
It’s important not only for operators to be aware of where they stand with sales and costs but also to use this data to their advantage. By partnering with an experienced hospitality accountant and technology provider, businesses can streamline their operations, keep track of inventory, sales and costs, and use this information to drive decisions that improve their bottom lines.
Tara Berman, CPA, is the managing partner of TaraPaige Group, an accounting partner of hospitality technology leader Craftable. TaraPaige Group is a leading industry expert on third-party financial management and day-to-day accounting for hospitality enterprises.