The decision for a restaurant group to transition its accounting function from an outsourced provider back to an in-house team, while simultaneously upgrading its accounting technology, represents a strategic undertaking, and while some may find these simultaneous tasks daunting, with partners like Tablespoon, the transition can actually happen rather seamlessly.
This whitepaper outlines the essential phases of this process, from initial strategic planning and team building to technology implementation and post-implementation optimization. By carefully navigating these steps, any restaurant group can achieve greater control over its financial operations, potentially realize long-term cost efficiencies, and leverage best-in-class restaurant-specific technology to enhance efficiency and gain deeper financial insights.
Defining the Rationale and Objectives for Insourcing: The decision to bring accounting in-house is often driven by a confluence of strategic factors. A primary motivation for many restaurant groups is the desire for greater control over their financial data and processes. This heightened control allows for more direct oversight and potentially quicker responses to financial discrepancies or the need for tailored reporting.
Furthermore, some organizations anticipate potential long-term cost savings by establishing an internal accounting team, although this requires careful consideration of the fixed costs associated with salaries, benefits, and technology infrastructure. The ability to implement more customized financial strategies that align closely with the restaurant group's specific operational nuances is another compelling reason to in-source. Enhanced communication and collaboration between the accounting team and other operational departments, such as sales, human resources, and purchasing, can also be significantly improved with an in-house model.
Lastly, concerns over the security and confidentiality of sensitive financial data often lead restaurant groups to favor the greater control offered by an internal team. To ensure the success of this transition, it is crucial to establish specific, measurable, achievable, relevant, and time-bound (SMART) objectives. These objectives might include reducing the month-end close cycle time, improving the accuracy of financial statements, gaining real-time visibility into critical key performance indicators (KPIs) such as Cost of Goods Sold (COGS), prime cost, and revenue per guest, or achieving a more seamless integration of financial data with point-of-sale (POS) and inventory management systems - all of which are possible and attainable with best-in-class accounting systems like Sage Intacct, coupled with marketplace back-office tools like Cogswell, Craftable, OneDataSource, Factura.ai, and many others.
A critical step in preparing for the transition is to conduct a thorough assessment of the current accounting landscape. This involves documenting existing accounting processes presently managed by the outsourced provider. This documentation should cover areas such as day-to-day bookkeeping tasks, the processing of accounts payable and accounts receivable, payroll administration, tax compliance procedures, the preparation of financial reports, and any industry-specific hospitality accounting practices like inventory valuation for perishable goods and tip reporting.
In addition, an evaluation of the current outsourced provider's performance is also an opportunity to identify pain points, limitations in service, or areas where improvements can be applied with either better processes, talent, technology or integrations.
Documenting the technology stack (accounting, operations, AP, payroll, etc.) utilized by the outsourced provider is equally important. This requires identifying the specific software platforms in use, any integrations with other business systems, and the formats in which financial data is stored, exchanged, shared, etc. Further analyzing or noting any limitations of the current technology in meeting the anticipated future needs of the restaurant group, such as advanced analytics or real-time reporting capabilities, will help inform the selection of any new technology stack.
Finally, the restaurant group should assess its internal resources and existing capabilities related to accounting. This involves identifying any current staff members who possess accounting experience or those who demonstrate the potential to be upskilled and trained to support the in-house accounting function. This internal assessment will provide a clearer picture of the resources available to build the new in-house team.
A detailed understanding of the current state is fundamental to a successful transition. By identifying the limitations of the existing outsourced model, the restaurant group can establish clear requirements for its in-house team and the upgraded technology stack, ensuring that the transition addresses the specific needs and goals of the organization.
Building upon the strategic objectives and the assessment of the current state, the restaurant group must define the specific accounting functions that will be brought in-house initially, as well as any functions that might be considered for a later phase of the transition. Determining the desired level of control and oversight for each of these accounting functions is also crucial. The restaurant group should clearly outline its reporting requirements and the key performance indicators (KPIs) that the in-house accounting team will be responsible for tracking and analyzing. These should include industry-specific metrics relevant to restaurants, such as the Cost of Goods Sold (COGS), prime cost (the sum of COGS and labor costs), earnings before interest, taxes, depreciation, and amortization (EBITDA), and revenue per head or average ticket size.
Defining the desired capabilities of the upgraded accounting technology stack is paramount. This includes specifying the need for seamless integration with existing point-of-sale (POS) systems to automate sales data capture, inventory management systems to track stock levels and food costs, payroll systems to manage employee wages and tips, and other relevant operational platforms. This is where Tablespoon and Sage Intacct come into play.
At this stage, the solutions consultants at Tablespoon can start to map out the implementation plan (and advanced scoping details) of what an ideal Sage Intacct environment and function should look like for your organization, and then our team can effectively help your leaders (COO, CFO, CEO) implement your new, restaurant-specific instance of Sage Intacct so that you new in-house team is able to function with maximal efficiency from day #1. Our team will train up your [new] accounting staff in Sage Intacct, and we may even recommend other integrated products with Sage Intacct to benefit back-office or AP functions that are typically integrated with the accounting data within the Sage Intacct reports and dashboards that we custom-configure for our hospitality clientele.
The Sage Intacct accounting system upgrade via Tablespoon should therefore focus on facilitating seamless integrations and automations to significantly enhance efficiencies and accuracies in the critical areas previously identified by management.
Managing the transition from an outsourced accounting provider requires consideration for the existing relationship. The restaurant group should begin by thoroughly reviewing the current contract with the provider and make sure their termination or out clause terms aren’t being breached at the time of their desired transition.
Establishing a clear and professional communication plan with the outsourced provider is essential to facilitate a smooth transition and migration of data. This plan should outline how/when the transition process occurs, how financial data will be securely handed over to the new in-house team (or to Tablespoon during the data migration process when implementing Sage Intacct), and how knowledge transfer regarding current accounting processes will occur. Maintaining a collaborative and respectful approach throughout this communication will help ensure a positive and efficient handover.
Establishing clear points of contact for different aspects of the transition, such as data migration, process documentation, and system access, will help streamline communication and ensure that the in-house team knows who to reach out to for specific needs.
A well-managed departure from the outsourced accounting arrangement is critical to minimizing any potential disruptions to the restaurant group's financial operations and ensuring a successful transition to the in-house model, and Tablespoon can help make this transition as painless as possible in the event you partner with our firm to handle your new accounting system migration/setup.
Defining the Organizational Structure and Roles within the New Accounting Department: The development of an effective in-house accounting department begins with defining the optimal organizational structure. This structure should be tailored to the specific size and complexity of the restaurant group's operations.
For smaller to medium-sized groups, this might involve an Accounting Manager overseeing Staff Accountants with specialized responsibilities in areas such as accounts payable (managing vendor invoices and payments), accounts receivable (handling customer invoicing and collections), payroll processing (managing employee wages, taxes, and benefits), and inventory accounting (tracking the cost and movement of food and beverage supplies). Larger restaurant groups may require a more hierarchical structure, potentially including a Controller or even a Vice President of Accounting to oversee the entire function and contribute to strategic financial planning.
Clearly defining the roles and responsibilities for each position within the accounting department is essential for operational efficiency and accountability. This includes outlining the specific tasks, duties, and reporting requirements for each role. Furthermore, establishing a clear segregation of duties among different accounting personnel is a critical aspect of maintaining strong internal controls and minimizing the risk of errors or fraudulent activities.30
For instance, the individual responsible for processing payments should ideally not be the same person who reconciles the bank accounts.
The organizational structure should also clearly define the reporting lines within the accounting department and how the team will interact and collaborate with other departments across the restaurant group. Effective communication and collaboration with departments such as operations (regarding sales data and inventory counts), purchasing (concerning vendor invoices and payment terms), and human resources (related to payroll information and employee benefits) are vital for the smooth functioning of the entire organization.
The design of the in-house accounting team's structure should directly support the restaurant group's operational needs and facilitate accurate and timely financial reporting. By carefully considering the necessary roles, responsibilities, and reporting relationships, the restaurant group can build a robust and efficient internal accounting function.
Researching and Evaluating Restaurant-Specific Accounting Software Solutions: The selection of the right accounting software is a critical decision in this transition, and Tablespoon’s expert solutions consultants can help steer you in the right direction during your vetting stages.
To make an informed decision, a restaurant group can request detailed technical software demonstrations from Tablespoon, as well as Tablespoon’s list of vetted & preferred vendors that integrate well with Sage Intacct - our preferred accounting system of record.
Choosing accounting software that is specifically tailored to the restaurant industry is of paramount importance, and it’s even more critical to find an implementation partner who is familiar with the restaurant-specific configuration requirements and settings. Sage Intacct is designed to handle the sector's unique financial complexities, such as integrations with point-of-sale (POS) systems for accurate sales data capture and robust inventory management capabilities to track perishable goods and calculate the cost of goods sold (COGS) effectively.
A primary focus during the software selection process should be on identifying solutions that offer seamless integration with the restaurant group's existing point-of-sale (POS) systems, and for clients who choose TBSP + Sage Intacct, we ensure the daily sales are coming into the accounting system on an automatic, integrated cadence of at least 1x per day. This integration is crucial for generating the DSR’s (daily sales reports) within the accounting system, eliminating the need for manual data entry and reducing the potential for errors.
Sage Intacct allows for data integration between so many different systems like POS, payroll, back-office, RMS (restaurant management solutions), inventory tools, AP automation tools, lease accounting systems, budgeting & so many more. The ability of the accounting software to integrate seamlessly with the restaurant group's existing operational systems is not just a matter of convenience; it is a critical factor in automating data entry, minimizing the risk of errors, and providing a comprehensive and real-time view of the organization's overall financial performance. This holistic integration, spearheaded by TBSP during the implementation & setup processes, will empower the in-house accounting team to generate more accurate and insightful financial reports, ultimately supporting better business decisions.
This is where Tablespoon SHINES and steps in to spearhead your entire accounting system setup/configuration from start to finish (or go-live). We’ll put together a detailed schedule, training playbook and playbook for setting up your restaurant group on Sage Intacct, and we will typically complete the project within 30-120 days.
A critical component of the technology upgrade is the development and execution of a comprehensive data migration strategy. This strategy will detail how historical financial data will be securely and accurately transferred from the outsourced provider's existing system to the restaurant group's new in-house accounting software. Tablespoon will typically bring over current + prior year of data into Sage Intacct for you, and if additional years are needed then we can simply add that to the implementation plan/scope upfront!
The successful adoption and utilization of the new accounting technology and processes hinge on the provision of comprehensive training programs for the in-house accounting team. These programs should be carefully designed to cover all aspects of the new software, including its core functionalities, reporting capabilities, integration features, and any customized workflows specific to the restaurant group.
The restaurant group should also plan for ongoing training and the provision of readily accessible support resources to address any questions that may arise after the initial training period and to ensure continued proficiency as the team gains more experience with the new system. Luckily for groups that partner with Tablespoon, we offer ongoing annual customer success plans, which include continued help in system, training courses, webinars, troubleshooting user permissions/roles, dashboard/report tweaks/fixes, etc.
Once all of your historical data has been pulled in, your COA is finalized, multi-entity structure & reporting/dashboard configurations have been customized as desired, user types/permission settings have been created, dimensions have been set up, etc. etc. and all of your new staff is fully training in Sage Intacct, we will switch your site from the test environment to a live environment, and then Tablespoon will work with your team in the new site for the first full month-end close process to troubleshoot any problems/questions in real-time alongside your new in-house team.
Setting a realistic and well-communicated timeline for the full transition to the in-house accounting function is essential for managing expectations and ensuring a coordinated effort. This timeline should take into careful consideration the complexity of the restaurant group's operations, the readiness of the in-house accounting team (including the completion of hiring and training), and the successful completion of the data migration process. A specific go-live date should be clearly defined, marking the point at which the outsourced provider will cease handling the accounting functions and the in-house team will assume full responsibility. This date should be strategically chosen to minimize disruption to the restaurant group's financial reporting cycles and operational peaks.
Once the timeline and go-live date are established, it is crucial to communicate this information clearly and proactively to all relevant stakeholders within the restaurant group, including the accounting team, operational managers, and senior leadership. Regular updates on the progress towards the go-live date will help to keep everyone informed and prepared for the change. A well-defined and communicated timeline provides a framework for the entire transition process, ensuring that all necessary steps are completed in a timely and coordinated manner, ultimately leading to a successful handover of the accounting function.
Monitoring Key Performance Indicators (KPIs) and Evaluating the Success of the Transition: Following the go-live of the in-house accounting function, it is essential to establish key performance indicators (KPIs) to monitor its ongoing performance and evaluate the overall success of the transition. These KPIs should align with the specific objectives that were established during the initial strategic planning phase. Examples of relevant KPIs might include the time taken to complete the month-end close process, the accuracy rate of financial reports, the efficiency of accounts payable and receivable processing, and any cost savings realized compared to the previous outsourced arrangement.
The in-house accounting team should regularly track and analyze these KPIs to identify any areas where improvements can be made and to ensure that the insourcing initiative is indeed meeting its intended goals. Conducting periodic post-implementation reviews will provide valuable insights. These reviews should involve gathering feedback from the in-house accounting team members, as well as from other stakeholders within the restaurant group who interact with the accounting function. This feedback can highlight what is working well, identify any remaining challenges or areas for optimization, and inform future adjustments to processes or technology utilization. Continuous monitoring and evaluation are crucial for ensuring that the in-house accounting function operates effectively and contributes positively to the restaurant group's financial performance.