Accounting has always been about translating complexity into clarity.
As a restaurant accounting service, that’s what we do. We take financial data that, unfiltered and disorganized, would make little sense, and help businesses to document it, organize it, and view it in a way that enables better decision-making.
If there ever was a time when it might be helpful to translate complexity into clarity, that time is now.
In the time of coronavirus, we believe that restaurant accounting has a critical role to play within the industry. While the national discussion is beginning to shift toward how to reopen effectively, there are countless details that are still unclear. As your restaurant navigates the decisions, challenges, and opportunities that lie ahead, here’s how we believe restaurant accounting services can help to bring clarity.
Restaurant accounting can help with PPP loan forgiveness.
PPP loans (loans obtained through the Paycheck Protection Program as part of the CARES Act – see our PPP guide) have helped to sustain thousands of businesses during the pandemic – but a key part of the program lies in businesses getting those loans forgiven.
Forgiveness will require proper documentation – which is why effective restaurant accounting can help to make PPP forgiveness much easier.
Here’s some of the documentation you’ll need to provide when you apply for forgiveness:
- Provide a list of all employees on payroll the 24 weeks following the loan with dollar amount of payroll costs. (This was recently updated from 8 weeks, so you now have until the end of 2020).
- Provide evidence that workers were kept on payroll or rehired once the loan was received (the deadline to rehire has been pushed back to December 31, 2020).
- Provide evidence of restoration by June 30, 2020 of pay for anyone whose pay was reduced by 25% or more.
- Provide evidence of payments for mortgage interest, rent, and utilities paid during the 24 weeks following the loan. This may include copies of cancelled checks, bank statements with ACH info, utility bills, mortgage statements, or your lease agreement.
- Provide evidence of payroll costs, utilities, rent payments, and mortgage interest paid before February 15, 2020, to ensure it aligns to what is paid during the weeks following the loan closing. (Note that the amount of loan needed for payroll dropped from 75% to 60%, thus increasing the amount of loan needed for other expenses.)
- Provide evidence you were in business on February 15, 2020, and paid employees or independent contractors.
It seems that PPP forgiveness standards are changing weekly, but the important thing is that, no matter what standards are, restaurant accounting can ensure this data is collected and organized so that it’s easy to present throughout the loan application process.
For more information on what that entails, check out our free PPP Forgiveness Checklist.
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Restaurant accounting can help with cash management.
Restaurant accounting can also help with cash management during this time. While accounting has always enabled businesses to have better visibility into cash flows, the current context dictates that cash management is not a once a month event. It is a daily consideration that needs to be attacked proactively.
Businesses have to be aware of how much cash is on hand, how much cash will be outgoing over the next period, and how much cash can be reasonably expected to flow into the business. When maintaining operations is a day-to-day endeavor, accurate data around these factors is a necessity.
With accurate cash management, you can make decisions confidently and chart a path forward. Without it, you run the risk of running red and spending money you don’t have.
Restaurant Accounting can help you to discuss your business with stakeholders.
During this uncertain and volatile time, many restaurant business owners will need to have high-stakes financial conversations with creditors and decision-makers.
Restaurant owners may need to discuss debt repayment with bank representatives. CEOs may need to communicate to investors what the financial future of the business looks like. CFOs may need to provide business owners with financial insight to guide decisions.
According to McKinsey, here are a few key points that businesses should be ready to clarify:
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- What, exactly, the financial effects of COVID-19 are on your business.
- Specific actions that are being taken to address the situation.
- Whether or not the business has enough liquidity to survive.
- What reasonable financial estimate are going forward.
Of course, the efficacy of any high-stakes financial conversation hinges on having the right data.
Restaurant accounting services can help to document and organize data in a way that makes these conversations clearer. At Global Shared Services, we also go a step further: We can provide CFO consulting to help you navigate decisions during this time, and we can even interface with stakeholders directly to add valuable expertise to critical financial discussions.
Restaurant accounting can help you shift from surviving to thriving.
The effects of coronavirus will be felt in our industry – and in every industry – for years to come. But, as the crisis subsides, restaurants must shift from a mindset of surviving to one of thriving by seeking to capitalize on new opportunities and adopting long-term considerations instead of taking a short-term, reactive stance.
The following are some of the challenges and opportunities that will determine which restaurant businesses win in the years ahead.
There will be greater concern about hygiene and safety. Sanitation will be a significant concern for restaurants and consumers (as outlined in the FDA’s guidelines toward reopening). Contactless delivery and pickup could become standard.
There will be stronger demand for digital and delivery. We’ve already begun to see the consolidation of delivery services; this landscape will change as it becomes the norm, especially in QSR.
There will be new and increased demand for groceries. Some restaurants may launch grocery product lines or expand into new channels like B2B catering.
There will be an increased focus on supply-chain management. The COVID-19 crisis has exposed weak links in supply chains that industry leaders will look to strengthen.
Restaurant accounting can give business owners the data they need to make decisions in each of these key areas – and, ultimately, the confidence to adopt a mindset that views changes as opportunities.
Want to Bring Clarity to Your Accounting Processes?
The world is complex – especially now. But restaurant accounting services can help you to better understand your business so that you can be confident about the decisions you make even in the coronavirus pandemic.
At Global Shared Services, we provide restaurant accounting solutions that are focused on clear and proactive communication, offer comprehensive finance and accounting services tailored to your needs, and provide deep expertise.
We’ll help you to set a firm financial foundation that’ll empower you to strategically build your restaurant business with a finance and accounting team you can trust – and, today, that matters more than ever.
If you’re ready to get started, schedule a free consultation to talk about how we can help your restaurant business move forward.