Expert Financial Guidance From SME CPAs
It takes more than culinary expertise to be successful in the restaurant industry. For years, SME has been guiding restaurateurs, food franchises, caterers and specialty food stores to success through small business accounting assistance.
Our experienced professionals understand the important role good forecasting and planning plays in the process.
Finding the Right CPA for Your Restaurant or Hospitality Group
We help our clients address the challenges of developing a competitive advantage and growing profitability.
Cash Flow Planning and Budgeting
Compilations and Reviews
Financing Alternatives and Negotiations
Getting Started With Accounting and Tax services for Restaurants
Accounting and tax planning for restaurants and hospitality groups comes with unique challenges. Knowing your field’s financial opportunities, pitfalls, and how to find the right CPA will help you overcome the top challenges businesses like yours are facing today.
Key tax and accounting strategies for restaurants and hospitality businesses
Before you can tackle your business’s finances, you have to pinpoint the accounting strategies best utilized throughout the hospitality industry.
Invest in specific software
These days, there are bookkeeping and POS systems specifically designed for restaurants and hospitality groups. Along with the general must-haves, you can find software that helps track inventory and price menu items.
Know the lingo
Educate yourself on need-to-know restaurant accounting terms like costs of goods sold and fixed vs. variable expenses. You’ll also want to learn important numbers to target in reports, such as food cost percentage and cashier’s summary.
Get the full picture
For the entire financial story, a business owner consults their accounting software, CPA, and front and back of house staff. Make sure everyone is on the same page and routinely reports the information you need.
Pinpoint the right goals
Your financial goals should reflect industry demands. For restaurants and hospitality groups, consider these common goals for improving financial stability:
- Tax reporting
- Expense tracking
- Menu pricing
- Staffing levels
- Cash flow consistency
- Growth strategies
Choose the best accounting method
For restaurants and hospitality groups, there are two common accounting methods, each with pros and cons.
- The cash method is considered easier, but not recommended for businesses above $1 million in revenue. Businesses record income as it is transferred to their bank accounts and expenses as they’re paid. However, tracking income before expenses can give a false impression of higher profits.
- The accrual method tracks transactions as they occur, rather than when payments are made or received. This makes it clear where income and expenses directly come from.
Finding the Right CPA for Your Hospitality Group?
Choosing a CPA is one of your strongest accounting strategies. You want someone who offers the services you need, is easily reachable, AND knows your industry. To make your decision, consider these questions:
Do they have experience with restaurants and hospitality groups? Hiring someone familiar with your field ensures they’ll accurately guide you on tax regulations and industry benchmarks. Ask potential firms who they work with, for how long, and for similar clients you can contact as references.
Fit for You
Are the size, price, and services right? CPA firms come in many sizes and price points. While each firm offers unique benefits, it’s important to find the CPA firm that fits your specific needs at a price point that is sustainable for the season of business you are in.
Are they easy to contact? Your CPA won’t be much help if they’re hard to reach. A firm should be readily available and make you feel comfortable discussing your finances. If you don’t feel that you can have an open dialogue with your CPA about the financial state of your business, it might be time to find a new partner.
The top accounting challenges your restaurant or hospitality group will face
The hospitality industry has improved since the pandemic began, but there is still ground to make up. Be prepared to face these age-old challenges as normalcy slowly returns.
Many companies develop incorrect financial reports without realizing it. If your reports aren’t accurate, your business decisions won’t be either. Automated reporting systems can greatly reduce human error.
Erratic food prices
Balancing quality ingredients and affordable menu prices is a major challenge for any restaurant. With recently fluctuating food prices, evaluate your inventory costs and menu pricing weekly. Use menu engineering to keep prices at an accurate reflection of expenses.
Your staff is a major expense, especially with turnover. Just like your ingredients, you want quality at the right price, so invest in a trustworthy, stable team. Establish an automated payroll system to avoid confusion and stay consistent.
Falling behind on accounts
If your business only reconciles its accounts monthly, you’re losing important information. For restaurants and hospitality groups, sales and expenses fluctuate daily. Make a schedule for frequent short-term reviews to accompany your monthly big-picture monitoring.
SME CPAs knows your accounting and tax planning needs
Accounting information can quickly overwhelm any restaurant or hospitality group. Getting connected with a CPA you can trust and who specializes in the restaurant and hospitality industry will keep you above water. SME CPAs has guided restaurants through tax season and financial planning for years, offering small business accounting services backed by the resources of a larger firm. Our industry experts are available at a moment’s notice. Reach out today!