Finding Focus for Restaurant Economics
Hospitality Technology (HT) hosted the third meeting of the Restaurant Accounting Innovation Council meeting on April 13, 2018, during the 23rd annual MURTEC (www.murtec.com). Sponsored by Restaurant365, the council focuses on how to provide clarity for operators and improve efficiencies they might not realize are possible with the right accounting support.
“We’re at the beginning stages of restaurants realizing how inefficient current accounting systems are,” notes Scott Gillman, CEO, Mascott Corporation. “Restaurants are founded by people focused on operations, so accounting is often an afterthought.”
Council members agreed that there is a need for education focusing on accounting fundamentals in order for operators to be equipped to make better decisions pertaining to the technology stack. Often restaurants will have five people in a department, where only one might be needed with the proper procedures and support. With anecdotal data that roughly 70% of restaurants start out using QuickBooks, the council voiced incredulity that this practice isn’t abandoned as financials become more complex.
“The last thing owners want to spend money on is accounting,” Bryan Kay, chief financial officer, Vibe Coffee Group, notes. “It’s a battle going from different platforms — invoicing, accounts payable, financial reporting — we’re moving from four or five to one.”
Melissa Haman, controller, Crazy Bowls & Wraps, says inefficiencies in QuickBooks was what drove them to leave canned accounting software to find a solution that fit the company’s needs. “The hardest part is figuring out what data to pull. Since switching to Restaurant365, we leapt ahead 10 years in our use of data.”
As restaurants fell into the trap of relying on QuickBooks, it becomes apparent that since the program isn’t restaurant specific, it cannot accommodate for key things restaurants require to be efficient. This then perpetuates the belief that such things — having multiple checking accounts etc. — aren’t possible.
The council encourages investment in accounting software or outsourcing to a partner that uses restaurant specific tools, because, “People don’t know what they don’t know,” Kay explains. He points out that for restaurants that use a CPA for accounting, nuances of restaurant finances are often foreign. Council members agree that even if a restaurant only uses 30% of the capabilities of a software, the cost of implementation is quickly recouped in the amount of time savings and better information that the operation will be able to access. The first step will be for restaurants to identify fundamentals operations are trying to achieve: entering invoices properly, closing end of month, ensuring the company is never behind in bank reconciliations, etc.
“The cost is justified when something that would take five hours a day — like bank reconciliation — can take two minutes,” Gillman contends. For Bill Valentas, VP finance, Freddy’s Frozen Custard & Steakburgers, added brand value started with giving managers more time to spend with guests. “Our process started that way — get managers out of the back-office, because they just screw it up anyway,” he jokes. The conversation around investing in restaurant accounting must be couched in making departments more efficient and helping ops. Arming managers with the most timely and accurate info is what matters to restaurant leaders and ultimately will improve overall operations.
Scott Gillman, Chairman,
Crazy Bowls & Wraps
Chief Financial Officer,
Kona Grill, Inc.
Chief Financial Officer,
Vibe Coffee Group
Chief Financial Officer, World Famous Fare
Chief Financial Officer, Wolfgang Puck Fine Dining Worldwide
Chief Financial Officer, Wood Ranch BBQ & Grill
Chief Financial Officer, Luke’s Lobster
Vice President of Finance, Freddy’s Frozen
Custard & Steakburgers
VP, Group Brand Director,