Operating a restaurant group is unlike running any other type of business. There are a lot of moving parts and in today’s economy having access to real-time data is critical to knowing the financial health of your organization. Measuring key financial metrics can help you understand trends, stay competitive, and enable strategic planning. Slim margins are notorious in the restaurant industry, so whatever you can do to increase revenue and profitability is essential.
Many new businesses rely on QuickBooks to manage their finance and accounting. QuickBooks is a popular choice for small businesses because it is easy to use. However, as your restaurant grows, you get to a point where you outgrow it.
If you are experiencing any of the following symptoms it might be time to look for a more robust finance and accounting platform:
- You are consistently using other programs to build reports
- Your restaurant group has multiple entities and reporting is a nightmare
- Entering transactions, creating bills, pulling reports, etc., takes too long
- There is a lack of financial visibility needed to make timely business decisions
- Excessive manual processes are turning out to be costly and error prone
If any of the above strike a nerve, then the following challenges might just send you running towards a more robust solution.
Reporting Challenge #1: Restaurant Groups With Multiple Entities
Your restaurant group is growing and that’s extremely exciting. With more entities comes bigger challenges on the accounting and operations side of the house. Managing multiple entities in QuickBooks can be challenging. Consolidating and comparing finances amongst your entities is not easy. You have to export data into Excel and manually compare. Manual processes can expose your organization to avoidable errors.
Reporting Challenge #2: 13 Week Accounting Period: 4-4-5 Calendar
The 4–4–5 calendar is a method of managing accounting periods that’s common in many restaurants. It divides a year into four quarters of 13 weeks grouped into two 4-week "months" and one 5-week "month". The grouping of 13 weeks may also be set up as 5–4–4 weeks or 4–5–4.
In the restaurant industry everything lives and dies on holidays and weekends. If you are working off a calendar month, it can be misleading. You must compare apples-to-apples (or weekend days-to-weekend days) to gauge your restaurant’s financial performance.
Comparing financial data isn’t the only reason why moving to a 4-4-5 calendar might be a good idea – it also helps with inventory. Instead of having to do inventory on your busiest days, you can now do it on your slowest. Food cost is one of the most important figures for you to consider as a restaurant owner.
If you’re now thinking about moving to a 4-4-5 calendar and have your finances on QuickBooks, you might have to seek an alternative platform. Having a custom calendar native to your accounting system streamlines the reporting.
Reporting Challenge #3: Chart of Accounts
Creating a chart of accounts is essential to maintaining organized restaurant finances. A chart of accounts is a list of the names of all accounts used. Its main purpose is to serve as a “list of ingredients” when entering transactions into accounting records.
Not all chart of accounts is created equally. Having a well-structured chart of accounts is the foundation of a healthy general ledger. Sage Intacct is intentionally set-up with a more structured chart of accounts. Without controls anyone could accidentally (or deliberately) add and/or edit accounts that shouldn’t be included. In addition to a well-structured chart of accounts, Sage Intacct’s dimensions capability leverages a best-in-class chart of accounts to enhance your reporting.
When you are transitioning between accounting systems (for example, QuickBooks to Sage Intacct) you have the opportunity to redesign your chart of accounts that aligns better with your industry. Think of it in the same light as reopening a restaurant – for example, a reopening is the perfect time to redesign the menu. So, implementing a new accounting platform is a perfect time to redesign your chart of accounts. This foundation will set your restaurant group up for success.
Bonus: Time Savings With Real-Time Data
By moving to a cloud-based accounting platform such as Sage Intacct can save you time and money. Restaurant managers can look up their own financial metrics in real-time without the assistance of accounting. Eliminating pivot tables and formula errors in your reporting process increases productivity and ownership by promoting collaboration.
If you are looking to make a switch, now is the time. Schedule a consultation >