10 Ways QuickBooks Is Blocking Your Restaurant’s Growth – Part 2
In Part 1, we looked at the first five reasons that relying on inadequate financial software is holding back your company’s growth potential.
To recap, here are the first five reasons that you should look for an alternative to QuickBooks:
- Not Restaurant Specific
- Manual Manipulation
- Multiple Entity Support
- Food & Beverage Costing & Analysis
- Accounts Payable Inefficiency
Let’s look at the next five reasons:
- Monthly Reporting Inefficiency
Successful operators depend on accurate and timely financials. If you are using QuickBooks, you’re probably not getting timely and relevant information. Successful operators also look for financial trends in their business. Comparing financials monthly does not make sense for restaurant operators.
For example, you will find it difficult to analyze sales performance if you are comparing based on calendar months. Because February has fewer days than January you would expect for sales to be lower but by how much? Comparing to calendar months of previous years also doesn’t always yield clear results, as you may have had an extra Saturday or Friday this year and the data is skewed.
In addition, QuickBooks does not support reporting on non-accounting data, such as guest counts, average check, table turns and other insights that operators depend on. If you track this data, your accounting or operations teams probably do it manually, outside of your accounting system.
- Payroll Reporting
QuickBooks offers limited reporting capabilities to analyze labor cost in a way that is meaningful to operations, and there is no multi-entity support.
Typically, labor data originates in the point of sale system with job codes, so employees can clock in/out of the appropriate job. Then the data flows to the payroll system for processing before it can be populated in the accounting system. In QuickBooks, the labor data is usually posted manually or in a best-case scenario you can use a general ledger interface through your payroll provider to create a file that then can be manipulated in Excel and imported in QuickBooks. Because QuickBooks does not support multiple entities, the process must be repeated for each entity.
By contrast, Sage Intacct’s dimensions and multi-entity capabilities allow for analysis and reporting of labor costs across multiple store locations, concepts, and entities. Sage Intacct provides integration flexibility with various payroll companies such as ADP, Paychex, Proliant and many others, to allow for direct transfer of payroll data into Sage Intacct’s GL, eliminating manual data entry.
- Inventory Management
Taking inventory is time-consuming and, frankly, no fun. As a result, most restaurants don’t take inventory often enough, which leaves operators without the data they need to adjust ordering and menu costing. We recommend using restaurant back-office management software to streamline the inventory management process and produce timely, accurate food cost reporting.
- Accounting Period Reports
Most restaurants have shifted to weekly reporting periods including a 13 four-week period, a 4-4-5 or a 5-4-4 rather than 12 calendar months for better financial management. QuickBooks does not support custom accounting periods. You can work around that by running reports on a specific date range, but the date range has to be keyed in every time you run the report. QuickBooks also won’t let you close the books based on anything other than calendar year-end. Upgrading to a best-in-class solution such as Sage Intacct, will allow your business to use accounting period calendars more suitable for restaurants.
You also can’t run period over period comparisons in QuickBooks (using custom accounting periods) or a trailing 13-period financial report. To get this reporting, data must be exported from QuickBooks and populated into Excel spreadsheets. Sage Intacct’s easy-to-use financial report writer enables customized financial reporting and online dashboards based on the restaurant’s actual accounting period.
- Unknown ROI
Using QuickBooks in your restaurant could be costing you profitability through lack of timely reporting capability, manual manipulation, and staff productivity. If you’re still using QuickBooks, you’re likely looking at outdated and stale financial results that may or may not be accurate. Making strategic decisions based on unreliable and outdated information is a recipe for disaster.
Transitioning to an ERP like Sage Intacct will deliver a long-term return on investment by unleashing the growth potential of your company.
For example, S&L Companies, the largest franchisee in the Culver’s restaurant chain, grew from 11 stores to 30 locations in four states in just five years, according to this Sage Intacct case study.
Since the S&L Companies adopted Sage Intacct, the company has seen amazing results:
- Improved finance team efficiency by 50%
- Reduced time needed for financial close by 25%
- Scaled easily amid 134% growth
- Began capturing ROI in just five months
The accounting staff handles twice the workload with the same headcount, and managers have real-time information to help them make decisions that drive profitability. The accounting staff can concentrate on monthly close and financial reviews.
Ready to grow?
Do you feel like your reporting is accurate and timely? Do you have the information to make sound tactical and strategic decisions for your operation? If you’re still using QuickBooks, the answer is most likely, “No.”
Don’t let your financial software limit your growth. Talk to us about making the switch to Sage Intacct and positioning your company for the future.