If you aren’t outsourcing your restaurant’s accounting function, you likely fall into one of two camps.
You may be a restaurant business owner who’s simply used to the traditional mode of accounting. You’ve always relied on an internal employee or a small internal team. If this is true, you may perceive outsourcing as an unnecessary risk, be skeptical of its effectiveness, or view it as a loss of control over the business.
Or, you may be relatively new to the restaurant industry. You haven’t reached the decision point where outsourcing is seriously considered. If this is the case, you’re likely functioning by doing most things yourself or within a small circle – but if you continue to grow your business, you’ll quickly approach a point where this is no longer feasible.
In either scenario, you know that outsourcing your accounting department is a possibility – but when should you make the move and do it?
Here’s our take, based on years of providing outsourced accounting solutions to restaurant businesses. You should outsource restaurant accounting when:
1. You want to scale your business.
We’ve written about this before: Scaling a restaurant business is easier with an outsourced accounting team. When you’re considering opening a new location, you should consider outsourcing your restaurant accounting.
There are several reasons for this. First, outsourced teams tend to be more efficient than internal resources. Internal departments typically require another person per three locations; based on optimized teams, we can service up to four times that bandwidth per person at lower costs.
Second, outsourced accounting grants scalable access to technology. For example, at Global Shared Services, because we function at a larger scale, the costs of our technology solutions are streamlined. If you add technology capability yourself, you’ll pay more.
Finally, outsourcing restaurant accounting grants you access to deeper financial expertise than you could gain through another internal hire. You get access to a team of experts – and the best accounting firms offer access to CFO-level insight and consulting, too.
2. You’re considering selling your business.
Another scenario where outsourcing accounting makes sense is when you’re considering a sale.
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This is true for a few reasons. First, as mentioned above, outsourced restaurant accounting offers access to CFO-level consulting. This can be invaluable as you prepare your business for a sale; you’ll get access to insights and financial guidance that can be beneficial as you walk through the process.
Second, outsourced accounting can generally help you to prepare your books for optimal visibility. Your internal team may not have experience preparing financial statements for an acquisition or merger; or, worse, your books may be convoluted or your finances difficult to ascertain thanks to years of internal work for internal eyes. Getting an objective third-party to facilitate your accounting can ensure that data is organized – which is table stakes for any negotiation.
Third, outsourcing your restaurant accounting can make your business more appealing by reducing the risk of employee turnover. When businesses are sold, employees often leave. If a business is sold and an internal accountant leaves, that could seriously damage the organization’s ability to function profitably. Having an outsourced solution in place reduces this risk.
3. You want to save time.
Outsourced accounting also makes sense if you want to save time.
If you’re just starting out, you may be saving your own time be outsourcing restaurant accounting; you won’t have to function as a bookkeeper or prepare your own documents any longer with an outsourced solution.
If you already have internal resources in place, you can likely supplement their work with an outsourced solution – giving them time to focus on higher-value activities that, in all likelihood, they’ll find more appealing.
4. You want to streamline costs.
It makes sense to outsource your restaurant accounting when you’re looking to streamline costs (which, in 2020, is more appealing than ever).
There are a variety of reasons outsourced accounting solutions tend to be more efficient. First, they don’t require salary and benefits (which can add up, even for entry-level roles).
Second, outsourced solutions negate the risk of employee turnover, which carries a hefty price-tag.
Third, outsourced solutions, as previously mentioned, benefit from economies of scale – both in terms of talent and in terms of access to technology resources.
5. You want to make better decisions.
Here’s the bottom line: it’s worthwhile to consider outsourcing restaurant accounting if you want to make better business decisions.
At the end of the day, all of the previously mentioned reasons for outsourcing point in this direction. A primary purpose of the accounting function is to present accurate data so that decisions can be made intelligently. Outsourcing your accounting enables access to organized and accurate financial data.
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The best firms take this a step further by bringing in high-level expertise gained from serving similar businesses. At Global Shared Services, for example, because we’ve worked with restaurants like yours, we can bring insight into how effective restaurants are structured. This industry knowledge can inform decisions with a layer of strategy that simply isn’t accessible from the vast majority of internal solutions.
Is the time to outsource your restaurant accounting now?
Whether you’re used to relying on an internal solution or you’re only now beginning to consider your options, hopefully, the information presented here has been helpful.
If you’d like to learn more about how outsourced restaurant accounting could help your business – or to discuss your current financial scenario with an expert – get in touch with us today.