Get Your Numbers in Order: The Importance of Hiring an Accountant in the Restaurant Startup Phase

Many new restaurants fail because of inadequate financial controls and projections. It is essential to spend serious time looking at and talking about dollars and numbers with a professional, who can also help you develop the best tax strategy, especially if you are purchasing an existing operation. Generally, most people drawn to the restaurant business love to cook and entertain, but unfortunately, these people are usually not the type who can get their heads around numbers.

Similarly, many people envision a huge cost associated with hiring professional guidance in the legal and financial arenas. That is not necessarily so, particularly when the restaurateur can effectively communicate their wants and needs clearly and concisely. Here are some tips for getting started with a restaurant accountant.

First, determine if you need a restaurant accountant or a CPA.An accountant is an individual who usually has a two or four-year degree in bookkeeping and/or accounting and is familiar with general accounting principles. A certified public accountant (CPA) is a certified professional who participates in ongoing professional development and is considered an expert in general accounting principles. A CPA is going to cost you more money but can provide a greater range of services from tax planning to investments and more. A CPA who understands the restaurant accounting business is the gold standard for independent operators.

Don't ever let your business get ahead of the financial side of your business. Accounting, accounting, accounting. Know your numbers.
– Tilman J. Fertitta

Determine what you want the accountant to do for you. Do you want your restaurant accountant to provide monthly ongoing services, such as bookkeeping, invoicing, and paychecks? Many small-business owners are comfortable with handling such daily or weekly chores themselves, but others become easily frustrated and bored with tasks that take them away from the dining room or kitchen, the places of action in the restaurant.

You might save some money by doing this yourself, but if it generates frustration or takes away from your greater contributions to other elements of running a restaurant, perhaps you want to consider having a professional handle this. You may wish to consider an accounting firm that offers non-certified accountants to handle the ongoing work, which may be billed at a lower rate than the larger, more comprehensive services of a CPA when those services may be necessary.

The good news for those who choose to do the monthly ongoing services themselves is that it is a lot easier than it used to be. RestaurantOwner.com offers a variety of downloadable forms and programs that simply walk you through the process. Other business financial accounting programs, such as QuickBooks make restaurant accounting services much simpler and less time-consuming than ever before.

Whatever you do, do not ask your Uncle Bob or Cousin Mary to do the accounting for you.You should work with an accountant who understands the restaurant business and someone who will not hesitate to offer constructive criticism or point out problem areas for you. While employing the services of a friend or family member might seem like a good idea, following best practices in restaurant operations means always hiring the best person for the job – and it’s likely not your pal Steve. In addition, a CPA is also in a better position to work with an attorney on legal issues and make recommendations on the intricacies and structure of your business, particularly in the startup phase.

Looking for more expert restaurant accounting resources? Read How to Select an Accountant, Attorney, and Startup Consultant for Your Restaurant and Your Path to Better Numbers: Why You Should Be Using the NRA's Uniform System of Accounts for Restaurants to get a handle on your restaurant finances.

Have a profitable week!

The RestaurantOwner.com Team