Building Stickier Relationships with a Value-Driven Approach to Restaurant Accounting
You have a fortuitous opportunity to become true cornerstone partners for your restaurant clients throughout 2021 and into 2022 — building stronger partnerships and generating more referral business.
It’s critical that operators ramp up to seize reopening momentum and get back on track. Add value to your relationships and help restaurant clients make data-driven decisions by:
- Being their eyes in the numbers
- Going beyond monthly PnL to weekly and daily reporting
- Providing critical analysis on food costs, labor, and other overhead
- Diving into the weeds on recipe management and plate margins
- Recommending profitable discount strategies and events that get butts in seats
These types of touch points and engagements help your restaurant clients know what’s happening with each dollar they’re making and spending. This knowledge can empower them to optimize spending and be intentional with their profitability.
Continue reading to learn how to offer these value-adds, positioning yourself as an invaluable business partner, encouraging retention, and generating referrals. Plus, see how proper systems can help you offer daily reporting and more without putting more work on your plate!
Differentiating with value-driven restaurant accounting
The accounting industry has moved away from an hourly to a value-based pricing model. While that essentially refers to how you price and monetize your services, a value-driven approach to restaurant accounting goes much deeper.
Restaurant operators do not have any time — NONE. They’re stretched thinner than they’ll ever admit. Monitoring restaurant KPIs, such as food costs, plate costs, and vendor fluctuations, is not at the top of their list. That’s why value-driven bookkeeping and accounting is built on bite-size reporting that quickly informs without overwhelming.
You’re not just recording financial transactions at the GL level — you’re digging deep into essential areas many operators struggle to get due to limited time and resources.
For example, you could help operators understand their prime costs, provide key insights into menu items through better recipe management, and send your clients weekly cost trend reports so they can make better pricing and business decisions, such as deciding between suppliers.
By going above and beyond, your clients will begin to see you as more than just a service provider. You can become a trusted partner who cares about their challenges and helping them make profits.
They’ll trust you more, which can generate better relationships, customer retention, more referrals, and new business. This approach ultimately differentiates your accounting services from the competition and builds momentum for ongoing success.
But how exactly do you become this trusted partner?
How to deliver more value for your restaurant clients
Here are five ways to deliver more value to build stronger relationships and differentiate your services.
1. Dig deep into prime costs to help restaurants understand their business
Prime cost (sum of food and labor) calculations are crucial because they represent the biggest restaurant expense, accounting for approximately 60% of operators’ costs.
Better controlling these prime costs is the difference between success and failure in the restaurant industry. However, many operators struggle with these calculations. Others still are unable to make the regular, weekly calculations needed to stay on top of them, identify areas for improvement and make swift changes.
So, why not take the lead?
If you can get to the data and find time to present it, do it. Use the time to inform clients what their prime cost numbers are, what their prime cost ratio is, what they’re spending money on, and how much they’re spending (e.g., itemized breakdowns of food costs). Also, look at why their numbers may be changing (e.g., supplier increases) and why it’s crucial to maintain a certain ratio.
Your clients will appreciate this because you’re getting to those strategic elements of running a restaurant they can’t always get to.
2. Provide more actionable insights to generate more client touchpoints
Instead of only calling about month-end financials, consider providing your clients with “little” bites of information throughout the month. These bites show how committed you are to their business and provide more actionable information to help restaurant clients in the moments they need it.
For example, provide regular reporting to build an understanding of weekly trends. This can include:
- Comparison of performance across multiple locations for multi-lo clients
- Benchmarking for how your client’s numbers compare to the competition
- Food costs analysis to highlight how supplier prices have fluctuated
Before you scoff at the idea of finding time for all this, just know that it’s all easily automated.
Use restaurant management software to generate product price fluctuation reports to quickly identify these vendor price increases. Set up these reports to automatically send to your email so you can forward them to a client with a note. For example: “Hey, the cost of chicken has gone up 10% since your last order. Just wanted to let you know.”
What takes you 15 seconds of work now translates to many more touchpoints with your clients during the month.
3. Perform vendor invoice audits for your clients to stop overcharging
An analysis of over 11,000 invoices from 400 restaurants confirms that overcharging is more common than some think, with at least one overcharge 35% of the time. This is 23% higher than the average for all industries.
An odd mistake here and there is not going to cripple your client’s restaurant. But sometimes these mistakes are substantial (such as a $25K saffron error), meaning your clients are at least tying up critical resources if not completely throwing money away.
There’s no guarantee overcharging is happening or has happened, but why not double-check by performing a vendor invoice audit?
Consider investing in AP automation software that digitizes your invoicing. You can easily and quickly make accurate comparisons between your client’s orders, what they were charged, and what they received. You can also automatically reconcile vendor statements against invoices and resolve issues in a few clicks.
4. Help clients build and track budgets
You can’t manage what you don’t measure. An essential part of this measurement process is budgeting. Budgeting lets your restaurant clients set targets and financial goals. It allows them to be intentional with their decisions, be it menu pricing, specials promos, shifting concepts, or hiring or trimming staff.
They have a benchmark to compare their performance against. If clients are behind sales targets or expenses are too high at any time, they can analyze why and quickly make decisions to improve the situation. But creating realistic budgets takes time—and can be tricky. Sticking to budgets is even harder.
You can help your clients build budgets they can manage constantly instead of once-off and ensure they’re actually staying on budget to meet targets.
You can look back historically and say: “This is how much you spent last year, this is what you’re spending your dollars on, and here’s what you should be targeting if you want to open that next location in 6-months.”
You can do this with restaurant budgeting software that tracks performance in real time by syncing sales and categorizing and subtracting purchases.
5. Carve out tedious, inefficient processes
Your clients and their employees are busy and work late hours. Slow, inefficient processes only add to these hours and can be frustrating after a long day’s work.
Examples may include your clients having to reference illegible notes, transporting paper documents from one location to the next, manually taking stock, and inputting invoice data into an Excel spreadsheet.
Duplication may also be a problem. You and clients might both be inputting the same information as you capture inventory and food costs.
Improve the efficiency of all these processes and reduce manual data input and duplication by putting systems and automatons in place.
For example, free yourself and your clients from the daily flood of paper invoices and never worry about managing, storing, or shipping paper again by using a platform to digitize invoices that both you and your clients can access.
Do more with less for your client with the right technology
Value-driven restaurant accounting is more than just a shift away from an hourly pricing model. It’s a way to deliver more value to restaurant clients that desperately need it while standing out from the competition and generating new business.
The good news is that it’s increasingly more achievable. You don’t have to increase your own costs or charge your clients more. And you certainly don’t have to worry about creating more unnecessary work for yourself.
You just need to use the right strategies and software to implement this data-backed approach.
Dig deep into prime costs for your clients by using software to digitize invoice data and closely monitor ingredient prices. Create more regular touch points by sending weekly reports.
Perform regular vendor audits with a system that easily reconciles vendor statements and notifies you about any order irregularities.
Quickly build realistic and easy-to-track budgets for clients. And, finally, remove duplication and manual data entry by digitizing invoices and storing them centrally.
Achieve all of this and more by implementing restaurant-specific tools that give you easy access to the data you need to empower restaurant owners to succeed.