In my last post, I wrote about a study that predicts increases in the minimum wage will lead to significantly more restaurant closures. Clearly, many restaurants and bars are unable (or failed) to raise their prices in response to increases in the minimum wage, resulting in their ultimate demise. Continue reading “How Much will Minimum Wage Hikes Affect Your Prices?”
I’m almost finished with Groupon articles! I’ve got two more, then, I think we’re done. I’ve been writing these articles, because there is a lot of confusion surrounding the accounting for Groupon certificates and how to enter them in QuickBooks. The resources for learning about these areas are poor (and often contradictory), but that’s nothing compared with the confusing, and often downright incorrect, information that has been written about the tax implications of using Groupon! I hope these articles will help accountants, bookkeepers and restaurant owners set up their books and account for these transactions properly.
Today’s article explains how to account for a restaurant’s Groupon transactions in QuickBooks. Previous articles have covered the POS system set up for Groupon transactions, accounting for Groupon transactions (in general), and the very important tax implications of using Groupon in a restaurant.
Continue reading “QuickBooks Accounting for Groupon”
This is the second article in a series about Groupon coupons for restaurants. The first article covered accounting for Groupon transactions. This piece covers how to set up your Point of Sale (POS) system to record redemptions of coupons. Failing to do so properly could result in the restaurant being on the hook for a lot of sales tax, penalties and interest!
In the first article, we learned that HST applies to the “promotional value” of the Groupon coupon. In our example, the coupon was worth $100 of meals, and the customer purchased it for $50, which was paid directly to Groupon. The promotional value of the coupon is the $50, even though the restaurant does not receive this amount from Groupon. So, when the customer orders $100 worth of meals and drinks at a restaurant, she will have to pay tax on $50, but she will receive a credit for $100 (face value of the coupon).
Restaurants that use Groupon (or other similar programs) may need to update their POS systems to properly account for these transactions. Many POS systems can be easily modified by the user to make these changes, but some require programming by the developer (which can take time). Here are the changes you will need.
Continue reading “Groupon POS Implications”
While I’m not a fan of Groupon coupons, at least for restaurants, I felt compelled to write a few articles about it. Today’s piece covers accounting for Groupon coupons, because I’ve seen some really weird accounting recommendations and far-from-best-practices. As far as I know, none of the more unusual accounting has been suggested by real accountants!
Future articles will cover how to generate the proper entries in QuickBooks, how to set up your Point of Sale (POS) system to properly account for redemptions of Groupon certificates, and why you may be in for a huge shock when the tax man comes a knocking.
For what it’s worth, if you really, really think you need to use Groupon (or Living Social) coupons at your restaurant, at least get the accounting right. There are four types of entries that need to be made in your accounting system, which are:
Continue reading “Accounting for Groupon Coupons”
The majority of the cost of most entrées comes from the “protein” component – meat or fish. Chefs try to maintain a consistent portion size, usually based on weight. Despite consistent portions, the cost will fluctuate depending on the raw purchase cost and the butchering yield. Even if you don’t have recipes fully documented and costed for every menu item, as a bare minimum, you should know the portion cost of the protein component of every plate. Also, you need to track the number of portions in inventory at all times. This will allow you to identify major cost problems that may be occurring.
Continue reading “Make Butchered Inventory Perpetual”
Rest assured, today’s post is not about tax evasion. But, it does have a very important implications. If your food recipes use any alcohol, it’s important to account for it properly.
Your food cost of sales should include all of the costs that are incurred in preparing the food menu items. Sometimes, restaurants forget to include the costs of liquor, wine and beer that are used in food dishes. Food costs are understated and alcohol costs are overstated. No big deal to the bottom-line, but it does affect the margins for each category, which are considered in your decision-making.
But there is a far more important reason.
Continue reading “Cooking the Books”
I’ve purchased several POS systems for my restaurants over the years. As an accountant and restaurant owner, I think I can give you a bit of practical advice when it comes to implementing a POS system in your restaurant. I visited a few web sites to see whether this topic had been adequately covered and found that there are still a few useful things to say. This article fills in a few of the missing details you should know about.
Most advice is written by people associated with a particular POS developer or a firm that implements such systems. Do you think they might be biased? I do. Based on my experience and research, all of the leading POS systems have very similar capabilities. Many provide the usual management capabilities in the standard package. Others provide functions commonly employed in a basic bistro style operation, and require you to purchase additional modules, if needed, such as inventory control (ingredients), menu engineering (recipes and costing), labour scheduling and time control, reservations, delivery, pool table rentals, etc…
Continue reading “POS for Thought”
I confess, the title of today’s post was the best I could come up with to try and make internal controls sound interesting. Truth is, the mere mention of internal controls makes most accountants’ eyes glaze over. While they may not be “fun”, they certainly are profitable. I’ll be writing extensively on the topic in the future, because the lack of effective internal controls will eventually destroy otherwise sound businesses. It’s a tough task, but I will try to keep the discussions practical and avoid theoretical, technical details.
Internal controls are the backbone of your operations. They help ensure that things get done the way they are supposed to and help ensure the accuracy of your financial reports. They include both preventive and detective controls. Whether you know it or not, you already have some internal controls in your restaurant. The question is how good are they?
Continue reading “Internal Controls for Fun & Profit”
When the economy went into a tailspin, a lot of restaurants experienced an alarming drop in sales. Not only were guests spending less, fewer were dining out and those that were, dined out less often. Pretty much every restaurant that I knew saw their sales drop by a minimum of 20% – some as much as 40%. Understandably, this put severe pressure on the bottom-lines of a lot of restaurants.
Restaurateurs were willing to do just about anything to bring a customer in the door. Many began offering coupons, some for the first time. Done properly, coupons and other discounts can be a valuable marketing tool, but too often they seriously harm the restaurant’s brand. Today’s article is not about whether they are useful. Instead, I want to talk about how we account for discounts and what it means to our analysis of costs.
Continue reading “Coupon Accounting”