The Unique Opportunity For Accounting Firms To Help Restaurants
by Jillian Straw
Few areas of our economy were touched by the Covid-19 pandemic than hospitality. On the heels of losing $240 billion in revenue, more than 10% of restaurants nationwide permanently closed after the first year of pandemic-related restrictions. The restaurants who survived are now in a different mode of operation than they’ve ever experienced: optimistic, yes, but more than a little traumatized.
“The Great Reset” is a term that journalists have been throwing around to give a name to the post-Covid phenomenon of businesses, the workforce, and even governments starting to operate differently after the forced sabbatical we just experienced.
For the restaurant industry, this means looking for new ways to operate creatively and resiliently. They’re in the market for insights and expertise they may have not felt the need for before.
And accounting firms are the specialists who can supply it.
If you’re an accounting firm who has worked with restaurant customers In the past, you may have been hired to provide bookkeeping or other basic tasks. But we know that’s not really your bread and butter: you want to analyze data, not complete administrative tasks. We know it’s the wave of the future. And we know that now, more than ever, the client is receptive.
As offices were closed, you and your colleagues hopefully transitioned to paperless accounts payable processes. It’s extremely likely that your restaurant clients have also considered making changes to ensure the longevity of their business.
This is the opportunity you’ve been waiting for. Add more value to your restaurant clients—and position yourself to charge higher rates for advisory services—by acting as change agents and providing invaluable intelligence that can help them weather the ongoing storm. Here are our ideas for how to best support them and become an indispensable partner.
Digitize the data
If your firm hasn’t gone down the path of AP automation, we strongly recommend starting there to best support your restaurant clients. Take your relationship beyond bookkeeping by using technology to automate manual data entry and General Ledger (GL) coding. With technology that’s specifically designed to reduce errors and increase the efficiency of finance teams, your firm will have more hours available to take on analyses that require more expertise.
Digitized data gives your firm the ability to work with larger quantities of information in a shorter period of time, giving you more flexibility to really dig into the numbers and uncover opportunities for cost savings.
Introduce more efficiency
Businesses bogged down by paper—like restaurants—tend to lose out on opportunities for deep data analysis. When you help them digitize, you’re not only increasing efficiency for your own team, but also uncovering other opportunities where your clients can cut the fat.
Think about labor costs. They account for anywhere between 20-30% of a restaurant’s total sales: a significant amount of spend. With more documentation readily available for both your firm and restaurant owners, you can take a serious look at invoices and determine what is and isn’t worth your staff’s time.
With no end in sight for the pandemic-fueled labor shortage, any opportunity you can offer to businesses who want to better invest their staffing spend might actually be a gold mine.
Offer business intelligence
Proper restaurant invoice management enables your firm and the restaurants you support to control what was once uncontrollable. Labor costs, though significant, should be pretty steady based on what your clients know about their peak hours. Food costs are another story.
Even in pre-pandemic times, the cost of individual ingredients can vary on a daily—or even hourly—basis thanks to seasonality and overall demand. But COVID made food costs even more difficult to estimate, with overall restaurant purchases increasing by 3.4% from 2020 to 2021. The food price index for meat, poultry, and fish rose 4.3% in April 2021 alone. Even ketchup hasn’t been spared from the price creep.
It’s a restaurant industry best practice to engage with vendors and build strong relationships to put owners in a better position to secure contract pricing. Digitizing invoices can help your team identify when food costs have strayed from your client’s contracted prices. Even if it’s just a few pennies above the agreed rate, those variances can add up to a lot of overcharges.
Provide market insights
If your accounting firm serves restaurant businesses, you probably have a fairly good pulse on how that market in your area is doing. Consider how valuable that insight could be across your clientele: by sharing best practices or wins from one client, you can hand a lifeline to your other clients who are having more difficulty weathering the storm.
Plus, if you’ve struggled to upsell to restaurant clients in the past, examples of how you’ve assisted their peers could go a long way in getting the door. You’re stepping beyond white collar knowledge and into their realm, demonstrating that you understand their complicated business with proof points that could help them navigate through the end of the pandemic and beyond. Be the lifejacket they now know they want.
Increase client “IQ”
Plate IQ’s invoice automation, bill pay, and expense management features help your accounting firm go beyond bookkeeping and focus more on analysis instead of administrative work. Our client MCM CPA & Advisors out of Louisville, KY was able to reduce invoice data entry headcount by 50% so they could focus more time on strategic and advisory partnerships.
Ready to take the next step in supporting your restaurant clients? Request a demo of Plate IQ at the button on the top of this page. It’s a simple first step to take in order to grow the depth of your restaurant industry relationships.
Jillian Straw writes for Plate IQ, covering technology in the hospitality industry from a background in restaurants and operations management.
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