How to Choose a Restaurant Accountant

This article was contributed by Raffi Yousefian, CPA and CEO of The Fork CPAs.

How you choose a restaurant accountant depends on your restaurant business goals.

From small business owners to multi-location operators, your goals in the restaurant industry define the level of financial data you need and the amount of time you should spend on your own bookkeeping and accounting. 

The restaurant accounting requirements for a restaurateur trying to grow and scale rapidly will drastically differ from those of a restaurateur trying to maintain the status quo and run as lean as possible.

In this article, we will discuss the purpose and functions of restaurant-specific accounting and how you should choose an accountant for each function based on your goals.

Accounting functions in a restaurant

Before we show you how to choose an accountant based on your goals, let’s understand the different accounting functions and their purpose by looking at the table below:

Understanding goals of restaurant operators in relation to accounting requirements

There are typically three different personas we encounter when it comes to operators, their restaurant management styles, and their business needs in relation to restaurant accounting services:

The Bulldozer: This is the owner-operator who’s actively involved in the day-to-day, working the equivalent of 2-3 employee shifts to mitigate labor costs run as lean as possible. This type of restaurateur may not be as concerned about building a scalable concept, spending more time working on the business, or adding more locations. They want to streamline prime costs, pay all their bills COD (Cash on Delivery, or payment upon receiving an order), and micro-manage most aspects of the business. 

The Strategic Operator: The owner-operator who is actively involved in operations but understands the importance of prioritizing and delegating tasks. They instead use their time to work on improving the business. This person usually wants key financial data to understand the health of their restaurant since they’re not involved in bookkeeping, paying bills, etc. 

The Visionary: The owner-operator who spends all their time working on the business, not in the business. This person is spending their time building their systems, standard operating procedures (SOPs), raising money, and trying to scale and grow as quickly as possible. Having financial information and real-time advice at their fingertips is nonnegotiable for this restaurant owner. 

These are of course generalizations. So while you may not fit exactly into one, hopefully they work as guidelines to help you decide what accounting solutions are right for your restaurant business.

Aligning goals with your restaurant accounting needs

As you think about how to choose an accountant, consider the many accounting responsibilities and roles that can be necessary to ensure you’re compliant and operating optimally. As outlined in our How Much Does Restaurant Accounting Cost article, there are multiple options for addressing these responsibilities:

Annual bookkeeper + annual CPA or EA

Hire an external bookkeeper for the bookkeeper responsibilities once a year and a CPA or other high-level accountant at year-end for CPA/Accountant responsibilities.

Advantages

• Low cost

Disadvantages

• Limited insight into your financials throughout the year

• Limited insight can cost you drastically.

• More likely to miss tax deadlines. 

• Inability to benchmark throughout the year

• “flying blind” throughout the year

Monthly bookkeeper + annual CPA or EA

Hire an internal or external part-time bookkeeper throughout the year for the bookkeeper responsibilities and a CPA or other high-level accountant at year-end for CPA/Accountant responsibilities.

Advantages

• Low cost

Disadvantages

• Limited insight into your financials throughout the year

• Limited insight can cost you drastically.

• Limited high-level accounting and tax guidance throughout the year

• Single point of failure: Operations rely on a single person always being present

• Need to rehire and retrain if the person leaves 

• Limited to expertise of one or two people throughout the year

Full-time bookkeeper + controller + CFO + CPA

Hire an internal or external bookkeeper for the bookkeeper responsibilities, a Controller and/or CFO for CFO/Controller responsibilities, and a CPA or other high-level accountant at year-end for CPA/Accountant responsibilities.

Advantages

• Have subject matter experts for each responsibility.

• Super scalable (this can support unlimited amounts of locations and is how most corporate accounting departments are set up).

• Your finance team knows your business well since they’re engrained in the day-to-day culture and operations. 

Disadvantages

• It’s not cost-effective unless you have 20+ locations.

• Need to rehire and retrain employees if any of the people leave.

Outsourced accounting firm specializing in restaurants

Hire a firm, like The Fork CPAs, that provides bookkeeper, CPA/Accountant, Controller, EA, and CFO responsibilities all under one roof throughout the year. 

Advantages

• Have subject matter experts for each responsibility.

• Scalable

• All finance is under one roof and potentially one point of contact (depending on the firm)

Disadvantages

• Could be expensive if you don’t use the financial data or extra time available to improve your business. 

Now, let’s look at how each type of restaurateur should address each accounting function depending on their goals:

Basing your accountant decision to your restaurant goals

Choosing an accountant for your restaurant is driven by your goals. 

If you’re actively working in the business, want to control all operational and financial aspects, and don’t aspire for growth, then your only requirement for restaurant accounting is compliance, and you can settle for an annual bookkeeper and CPA or EA. 

If you want your restaurant to run itself and aspire to add more locations or not be involved in the day-to-day, you need an outsourced accounting firm specializing in restaurants to oversee all the detailed financials, provide guidance, provide back-office support, and ensure the restaurant is compliant. 

If you’re growing and scaling aggressively, you need an outsourced accounting firm specializing in restaurants or an in-house finance team that can ensure you’re growing strategically, and your restaurants are operating optimally.