Author: Hunter Smith
For restaurants today, financial discipline and technology often go hand in hand.
Restaurant operators make pricing, staffing and purchasing decisions every day, but the financial effects of those decisions aren’t always visible right away. A labor issue may not become apparent until payroll costs increase. Margin erosion may occur as ingredient costs change. Cash flow concerns may not surface until important obligations come due.
But with the right technologies, restaurant operators can monitor these areas more closely and identify issues before they become more expensive to address.
Labor Management Technology
Rising minimum wages, changing tip wage regulations and overtime compliance factors are having a massive effect on labor costs. Labor management software, self-service kiosks and QR code ordering systems can reduce administrative workload and provide better information for scheduling decisions. These tools can help restaurants align staffing levels more closely with demand, monitor labor costs more effectively and identify potential payroll cost issues before they affect margins.
Menu Engineering Software
Volatile ingredient pricing continues to pressure margins and complicate pricing decisions. Menu engineering software combines sales, pricing and inventory data to show which items contribute most to profitability. The information can help operators adjust menu pricing, address waste and spoilage issues, evaluate inventory purchasing decisions and understand which menu items generate the strongest financial return.
Real-Time Cash Flow Dashboards
Restaurants are balancing daily operating expenses, payroll obligations, vendor payments and delays between credit card sales and cash receipts. Small changes in cash flow can have a big effect on purchasing decisions, working capital availability and short-term planning. Real-time dashboards and rolling cash flow forecasts provide a current view of available cash and projected needs, which can help operators identify potential shortfalls earlier and make spending decisions with more lead time.
Cloud-Based Platforms
Many restaurants rely on separate systems for ordering, inventory management, payroll, scheduling and accounting. Cloud-based platforms can automate data flow between systems and reduce manual data entry. They can also improve reporting accuracy. For multilocation operators, this can support profitability analysis at the store level and make it easier to compare financial performance across locations.
POS Analytics
Cash handling, inventory shrinkage, unauthorized discounts and voided transactions can create avoidable financial losses for restaurant operators. POS analytics can identify transaction patterns that warrant further review. The data can help management monitor internal controls, investigate unusual activity, identify potential revenue leakage and reduce avoidable losses.
Technology Supports Better Financial Decisions
Technology can improve access to information for budgeting, forecasting and profitability decisions, but the true value comes from how that information is used.
HUNTER SMITH, CPA
Tax Senior Manager
D 334.260.2329 | F 334.274.1500
105 Tallapoosa St, Suite 300 | Montgomery, AL 36104
[email protected]
Hunter Smith joined Warren Averett in 2016 and is a Senior Manager in the firm’s Tax Division. He has 10 years of public accounting experience. Hunter is a member of the firm’s Real Estate, Construction, and Hospitality, Retail & Restaurants Industry Groups.
