Accounting Software Lightens Administrative Load

And while letting technology, such as accounting software, do the work may get you by, understanding the tasks that are being automated will help further your knowledge of how the business is run and what it takes to better it.

Because of an accounting system's ability to analyze and report on financial information fed into it from your operation, it is a key component to many aspects of your business. Accounting software provides basic financial reports that every business needs such as a profit and loss statement, a cash flow report, an income statement and a balance sheet statement. There are accounting software packages available, however, that offer more than 100 different types of reports — deciding which ones are needed for your operation is something you can do during the set up.

Accounting software can also help you organize your purchasing system. Purchasing products from vendors on the large scale that the restaurant industry demands can become very confusing when using a paper/pencil method, and too prone to human error for comfort. Bill Oleksinski, president and systems analyst for Restar Inc., says, "If you don't pay your vendors, they don't provide you with product, and you don't stay in business very long. Information between the store and vendors should be communicated in a way that doesn't entail talking on the phone — it should all be automated. For example, check stubs should clearly list all the invoices that are being paid for with that check. That kind of documentation prevents a lot of misunderstandings between vendors and the store."

You can even manage payroll tracking through your accounting software. There are software programs available, according to Kellie Jones, product manager for Peachtree Software Inc., that have a "payroll module that can capture tips and meals and allow for many different pay rates. This becomes important in the restaurant industry because some restaurants have flexible employees who might be a bus boy today and a waiter tomorrow."

Accounting systems account for your operation's

money, and can be an ongoing aid when it comes time to do the taxes for your restaurant. Jones says accounting software can offer "good reporting information and one of the ways it does that is by running a taxable exempt sales report so it can help [restaurant owners/operators/managers] fill out their sales tax return."

This report is not specialized to the tax season and can be run anytime to find out where your sales tax stands.

Oleksinski says that accounting software also helps with all the information that is included in the property tax reports that have to be done at the end of the year.

Karyl Toms, director of sales and marketing for Eatec Corp., says that "if an accounting system is used solely as a financial reporting tool, it can do the following for an operation:

• "Generate a daily flash report (revenue and cost of sale);
• "Income statement and balance sheet for their respective financial periods (usually monthly); and
• "Accounts payable reports (accounts receivable if also applicable)."

Toms also points out that "most companies are looking for an accounting system that will give them all their information, not just financial.That would include a system that provides operational data (inventory usage, physical inventory variation)."

Some accounting software packages that are available are designed specifically for the foodservice industry. According to Oleksinski, however, it is not necessary for a restaurant to use this type of software as most of the massmarket products can be set up and customized to work very nicely for the restaurant industry. Oleksinski adds that "getting involved with the process of setting up and customizing your system is generally the key to success with this software."

When deciding on an accounting system, it is critical to know if your operation has any plans for future expansion in order to choose a system that fits. Restaraunts looking to expand should find accounting packages that will accommodate growth.

The cost of accounting systems varies greatly, ranging from $200/unit for a low-end product with minimum to no implementation costs, to $100,000/unit for a high-end, highly customized product with implementation costs of $700 - $1,000/day. Training/implementation time is typically estimated at approximately one day per module sold. Finding an accounting system that is right for you should involve educating yourself on what is available. Oleksinski suggests several ways to go about doing this:

• Talk to your accountant or whoever gives you financial advice. Even if they are not aware of the products available, they should be able to give some kind of background;
• Go to the Web sites of accounting software companies and look at their products;
• Talk to other restaurant owner/operators to find out what they're using, what they like and don't like; and
• Attend a computer show or the NRA (National Restaurant Association) Show to check out the accounting software on the market. (See page two of this newsletter for upcoming events through March — the NRA show is May 1922 in Chicago, IL. For more information call (312) 853-2525.)

If a restaurant manager knows how to run an efficient kitchen and front-of-the house, but is uncertain about the details of running a business, there is a good chance that restaurant won't be around very long. Restaurant managers need to know the foodservice industry and have a good sense of business. Therefore, it is important that your operation's accounting software isn't being used as only a means of running reports to be handed to your accountant, but that the on-site manager knows how to read and analyze them. This gives the manager the great advantage of knowing what his/her next move should be and where the restaurant stands financially. Oleksinski says, "You need a tool in the stores that will make the managers think like business people."

Although most accounting software is designed so that the user doesn't need to know a lot about accounting, Oleksinski encourages users to learn more so the reports that are generated can make sense: "If you know how to read a financial report, you can sit down and know if you are operating a profitable operation within a few minutes. You can see sales, percentages, controlled expenses and overhead costs, and you can run a report to show percentages and comparisons. You can type in budget numbers then run a report that compares actual to budget. You can do your data entry with an accounting program, then run a report to check your data entry before it becomes permanent, which offers major advantages in accuracy and consistency."

FISR
Copyright © 2001 Cynterpubs
ISSN 1523-8644

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