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Two years ago I wrote an article about “Running Your Business in Your Pajamas with Technology.” We researched available technology tools for restaurant operators and planted the seed in that article identifying what was possible: (See article at www.pmq.com/mag/2005september-october/rasmussen.php).
You turn on your computer, enter the prior day’s vendor checks, download your daily sales from the night before, verify the deposit to the banks made by your manager the day prior, access your banking and credit card balances, download and approve your employee time cards for processing later in the day, and make a phone call to your opening store manager all before your morning coffee is made at home.
Banks and credit card companies, along with most taxing agencies, have embraced the electronic revolution in moving data quickly and securely, and removing paper from the process. The IRS continues to be the leader, forcing state agencies to follow, as identified in their strategic plan goals:
Improve Taxpayer Service: Help people understand their tax obligations, making it easier for them to participate in the tax system.
Enhance Enforcement of the Tax Law: Ensure taxpayers meet their tax obligations, so that when
Americans pay their taxes, they can be confident their neighbors and competitors are also doing the same.
Modernize the IRS through its People, Processes and Technology: Strategically manage resources, associated business processes and technology systems to effectively and efficiently meet service and enforcement strategic goals.
The FY 2008 President’s Budget request for the IRS increases funding as part of a strategy to improve compliance by: Investing in technology to reverse infrastructure deterioration, accelerate modernization, and improve the productivity of existing resources.
Why Should You Care?
Why should you care about all of this technology and modernization when you use a cash register and Z tapes to operate your restaurant? The answer is that these tools will put profit in your wallet. For example, assume your monthly sales are $30,000 per month. By tracking inventory and performing weekly inventory counts, a half percent savings in food costs will generate $150 per month of available dollars to pay for the basic technology that will allow you to start monitoring your results and provide information to your outside accountants and advisors. Here are 10 technology tips you can use to simplify your life today:
Download Banking Transactions
Most banks are now offering the ability to download transactions over the Internet in a format that integrates into your POS or accounting software. This process allows the operator to verify the daily bank deposit the following business day. The night shift completes the close out sheets and faxes via email the expected bank deposit for the operator to confirm. Some banks are charging for this ability, others offer the service free.
Download Credit Card Transactions
Similar to the banking service, credit card companies are continuing to duplicate the banks with the ability to download transactions into accounting software. However, this process is complicated by the merchant fees involved and you must identify how exactly you are being charged your merchant fees. In a perfect world the settlement amount on the Z tape should match the amount the bank receives on a daily basis. Normally, a two to three day float occurs from the time the credit card machine is settled and when the bank credits the operator’s account with the cash.
Automated Payroll Services
The most efficient payroll services provide the operator the ability to enter employee hours into a website and print out checks on demand using blank check stock without having to contact the bookkeeper or payroll service. Most offer the ability to auto-deposit the net pay to the employee’s bank account. All taxes and form filings should be processed electronically through an arrangement with the payroll service so that the operator only focuses on employee hours. Be sure your service allows you to pay an employee on demand due to termination or to make adjustments to a check amount for incorrect hours. This is crucial for employee satisfaction and compliance with labor laws.
Export Daily Restaurant Operation Data to
Accounting Software
Most POS systems are moving towards the ability to export their data to accounting software packages. What this means is that daily sales can be sent to the accountant via the Internet and entered automatically into the accounting software, which will then provide the information to generate various reports and match up transactions that are being downloaded from the Banks, Credit Card, and Payroll processing companies.
Online Filing of Sales and
Personal Property Taxes
If the restaurant accounting data is being exported to the accountant software package timely and accurately, the preparation of the monthly and quarterly sales tax returns is more efficient. Plus, timely data means timely filing, which saves the operator from late payment penalties. More states are automating the process of filing and paying sales tax online. Similarly, the annual personal property tax returns are becoming available to prepare and pay online versus the paper statements we are so used to.
Receiving Vendor Invoices directly into
POS or Accounting Software
Operators are requesting the transfer of vendor purchase data directly to the operators’ POS or accounting software within 24 hours of placing an order with a distributor. This transfer of information reduces the burden of data entry at the operator level and will notify the operator of missed product that will not be arriving on the delivery truck later in the day, allowing for alternative arrangements for the product if needed. This service is gaining momentum as independent operators are demanding the information more timely.
99.9% System Works
All operators are mandating that a system can not be down, especially during prime time hours. Built in back up procedures are becoming as important as the normal working POS and credit card systems. Being as familiar with the back up manual process is critical; responsible staff or managers must be properly trained. From a power failure to natural disasters, an operator must be open for business.
Upgrade your Internet Connection
DSL or High Speed connections are being deployed to all remote areas where independent operators exist. I am amazed at how many restaurants I walk in to using a cash register and in their small back office I will find two to three fully decked out computers running high speed Internet with more than four emails. We have all been forced to utilize the Internet in our personal lives; it’s time to transfer those skills to our restaurants. Again, if you think the IRS or other taxing agencies are not gathering your information from other electronic sources to prove sales or purchase figures or determine how many employees you use, your thinking is outdated and a surprise awaits you.
Access an Internet Storage Site
for Restaurant Data
Now that you have all of this electronic data how do you save it safely and have the ability to retrieve it 24/7? Some more progressive accountants provide solutions for offsite data storage as an additional service. If your accountant doesn’t offer this, you should contract out to a company who provides Internet Data Storage. Do not engage any service that does not use “https” security encryption along with a username and password to retrieve your information.
System of Confirming Electronic Payments
How many times have you had to prove to some taxing agency that a payment had in fact been made and the error was not your doing? The IRS offers an E-Services program where your accountant can apply for a business power of attorney status and act on behalf of your company to gather information. For example, transcripts can be retrieved from the IRS that identify electronic tax payments made by your payroll processor. There are services that allow accountants to stay ahead of the game and confirm payments as you do business in a real time fashion.
At Rasmussen Tax Group, we have continued to push the envelope on technology to simplify the life of a restaurant operator. The bar has been set such that the ultimate accounting and reporting system for restaurant operations should be a system where information is gathered behind the scenes efficiently and securely, and available 24/7 from anywhere. We have created a blog at www.rasmussentaxgroup.com to report the tools and results other operators are using in their restaurants as we visit them weekly seeking ways to simplify their life – tips from real life operators who are willing to share the ideas and programs that make their restaurants successful. Make sure your accountant has the tools to help take your restaurant from Cash Register to Cash Rich!