If you want to keep your own books to stay connected to where your money is going, that is completely understandable, but you should try not to lose site of the big picture. Below are a few signs that you may need to seek help with your accounting, and some suggestions of where you might turn.
You don’t know where to start. Sometimes, just getting started is the hardest part. If you value complete confidence that you are starting on solid ground, then hire an accountant to set up your accounting method, your bank accounts, and your chart of accounts.
You are spending too much time on accounting. Quality and customer service are often the first things to suffer at the hands of this sometimes-daunting task. If you are spending more time in the back office than running your business, it may be time to seek help.
You have fallen behind. Staying on top of your books is vital to your business, and it is difficult to catch up once you have slipped behind. Entering your purchases in a timely manner will help you know exactly where you stand each week, allowing you to tweak your spending accordingly. This is vital in maintaining a healthy cash flow in such a low-margin industry, where you may have a profit one week and an overdraft the next.
Your numbers don’t make sense. Perhaps your sales look great but you aren’t making a profit, and you can’t figure out why. Some accountants will work with you as a consultant to find areas in which you are overspending, and to help you find ways to reduce those costs. Of course, you should be sure that you work with someone with restaurant accounting experience.
You are facing an audit. Working with the IRS can be intimidating – did you know that agents are trained on specific industries and issues? This means that each type of business has to wade through a river of different forms. An accountant with restaurant specific experience can help reduce the stress while you navigate through the audit process – and maybe even find you some tax breaks that you did not know you were entitled to.
If you can’t afford an accountant, there are some tips and alternatives.
Only use the accountant for specific projects. Many accountants perform contract work, and will take specific tasks off your plate. If tax is not your thing, then just outsource your taxes. Perhaps you need a business strategy from a financial expert, or someone to verify vendor invoices. Hiring an accountant does not have to be an “all or nothing” deal. They can cost anywhere from $100-$400 per hour, * depending on the type of work provided, their background, if they work for a firm or are independent, etc., so be sure to look around for one that fits your needs and budget.
Consider a bookkeeper. Accountants and bookkeepers are sometimes confused with one another. While many of their tasks do overlap, there is a difference in the level of involvement they have in your business, as well as in the fees that they charge. A bookkeeper typically costs less; approximately $30-50 per hour* (depending on various factors named above). They can help with the day-to-day tasks to keep you caught up, such as payroll, accounts payable, processing invoices, reconciling accounts, etc.
Farm out the easy, time consuming tasks. If you simply cannot keep up with entering invoice line items while running a shift, ask someone you trust if they could key items for a few hours each week before you get too far behind and can’t dig your way out. You most likely have a manager or shift leader that understands your business, or perhaps a college student eager to get more hours.