The Bun Also Rises* started as a quick-service concept restaurant in Allston.
They recently opened a second location in Somerville and have plans to open additional units in the near future. Their growing business means they need to streamline day-to-day administrative functions, install systems that keep the owners informed when they no longer personally do all the bookkeeping, and manage cash flow to enable their growth.
*The name and specifics have been changed to respect the privacy of the business owner
- Review and Refine
With the increased time-demands of the new locations, the owners delegated some bookkeeping responsibility to the managers, who performed the tasks inconsistently in comparison with the original location. The second location put a strain on cash flow and required vigilant attention to bills coming in and being paid. Finally, with the on-boarding of new locations, they needed to have the books between the multiple units aligned for better reporting and comparisons.
The owner believed that there were no deficiencies in the current system, but rather needed help creating the back office infrastructure to grow the business efficiently and effectively.
In order to create a more streamlined system, we conducted a thorough review of the QuickBooks files, associated documentation and an interview with the owner.
By taking an in-depth look at the current system, we discovered:
- Key food item costs were being tracked in a separate spreadsheet, not in QuickBooks, resulting in double the effort in tracking costs.
- Incorrect classification of food and beverage costs by site managers meant that managerial decision on food costs were made on erroneous information.
- The restaurant was under-collecting meals tax from customers based on incorrect settings in the POS system
- The restaurant was double paying meals tax for sales through third-party vendors (Menu Mix).
- Different financial statement structure at each site meant that they could not be compared side by side
- Unclaimed vendor credits. Old ones were no longer valid, but current ones could be claimed.
- Uncleared but expired checks lingering in the register skewed the owner’s perspective on available cash.
- Taxes were filed on an accrual basis but the books were cash – expenses improperly recognized resulting in the overpayment of annual income tax.
As a result of our thorough review, we were able to recover close to $4,000 from vendors and the state of Massachusetts. Additionally, we prevented the restaurant from over-paying $700 per month (going forward) in meals tax as a result of under-collection.
Just as important, we cleaned up the other small issues and changed the charts of accounts in the QB files for each site so that they are aligned and performance patterns are clearly visible. Monthly reports not only track food cost and other operating expense, but the owner can now compare the two units against each other.
Finally, we updated the books and payroll entries to be accrual basis which will minimize the owner’s tax obligations and minimize their CPA bill.
On-Going Maintenance and Support
Moving forward, we will work together to provide monthly oversight, reconciliations, meals tax filings, cash management assistance, training to staff assigned bookkeeping tasks, and preparation of materials to be transferred to CPAs at year end.