I spend a lot of time comparing various supplier’ prices for the same product. Why? 

In this technologically advanced age, you would think restaurant owners would have the ability to gather cost-comparison information right at their fingertips. But a number of major obstacles stand in the way of casual comparison. Presently, there is no effective way to collect comparative information, and the food salesperson that performs the bulk of the analysis works for the vendor, not for you. While technology can usually help operators untangle complex webs of information, in this case, it’s just the opposite—finding commonality between disparate data sets from each vendor adds to the confusion.

For illustration purposes, let’s say the Acme Food Company is the primary vendor for your restaurant. Acme provides a plethora of costing tools and a mixed bag of vendor information in the form of pricing guides and invoice spreadsheets, PDFs and the like. Unfortunately, the restaurant owner simply does not have the time to decipher the menu-item-to-provision relationship and pore over the complicated data in order to effectively compare one vendor to another on a regular basis. The lack of data consistency leaves the independent restaurateur with few options to ensure that he’s getting the best deal he could possibly get.

Most restaurant chains have already taken the time to prepare a detailed food-costing analysis; armed with this important data, they can require the food supplier to accommodate their needs at a price that works for both parties. An independent restaurant owner, on the other hand, doesn’t have the buying power to demand this type of relationship.

Since food, beverage and paper products account for a majority of your restaurant expenses, you must develop a system to monitor these costs as a percentage of daily net sales. There are tools on the Internet that will teach you various methods of leveling the food-price playing field; these tools also provide reporting that matches your daily net sales to the actual food pricing from suppliers in a real-time system. Do your homework, find the tool that works for you, and you can take control of your bottom line.

My food supplier helped me with my food costing, and all of my recipes were lost. How can I prevent this in the future?

Recipes are a trade secret and should be guarded as such. Food-costing your menu items is a big project, but, once you’ve gotten it done, it’s easy to update and maintain on an ongoing basis as menu items are added, deleted, or modified. However, you must be in control of the database of recipes after the project is completed.

Food supplier representatives need to be involved in the process of analyzing food costs per menu item, but the resulting data should always be retained by the operator, and a non-disclosure should be signed by the food supplier and its representatives.

Additionally, independent third-party programs and consultants—all of which you’ll find on the Internet with a little research—can help you analyze your menu item food costs and set up a working model for the future. If you bring in someone to assist you in the process, make sure to require transparency and independence—this person should be working for you and only for you, with your best interests in mind. This would also be a good time to get your CPA or bookkeepers involved to double-check the food-costing results and explain to you the impact on your restaurant’s financial operations.

Simple Food Costing Tool is like a heart monitor for your business. Sometimes you’re not aware of issues until it’s too late. By monitoring your costs, which is basically when you got high blood pressure, you need a heart monitor to monitor.

There are many benefits to food costing including:

• Creates an awareness that food costs will be analyzed closely and a culture amongst the staff that cost controls are important
• The people are paying that which you pay attention to gets attention.
• It puts the restaurateur in control.
• It duplicates what the chains know and do.

There are three important aspects to food costing:
1.    Price.
2.    Recipe mix
3.    Tracking

The menu item pricing of course is the owner’s responsibility to go out in the marketplace, and determine the competitor’s pricing, what the market can bear

The recipe mix involves the ingredient costs, which are what your food company charges you. So depending on the ingredient costs and the portion you use, that drives the cost of the recipe mix for menu item.

Ongoing tracking provides a daily pulse of the business based on date range who will give you the food costing based on actual sales.

So one major item of note, that I want to teach an operator, is that food cost does not equal total food purchases divided by total unit sales.

To get their food cost percentage, most owners I know just look at their QuickBooks to their profit and loss, and take what they bought in a month, and they divide that by total sales, which may or may not include sales tax.

A true food cost, a simple food cost formula is made up of two percentages:

The first percentage is the actual food cost percentage. That is calculated by taking your beginning inventory on a given date range, plus the purchases of items that you used (food and paper), less the inventory on that date range you’re selecting. That will equal your food cost in dollars.

You take that number, and divide it by net sales. We call that “x tax,” which means it’s net sales exclusive of sales tax.

So you take the food cost in dollars, divide it by the net sales, and that will give you your actual food cost percentage. Then you subtract out the expected food cost percentage, and you’re expected food cost percentage is calculated by your simple food cost divided by net sales.

Your simple food cost is made up of your actual sales mix, meaning, what you sold of each menu item at a given day, times your theoretical menu item cost that we performed in the simple food cost program.

So it’s your actual sales mix from your point of sales system times the food cost, ingredient cost, and portions that your PFG rep helps the owner come up with. You take that number, which is in your simple food cost, divide that by net sales, and then you come up with your expected food cost percentage.

So you have your actual food cost percentage less your expected food cost percentage. In other words, exactly if you portioned it out perfectly every time like McDonald’s does, the difference of those two percentages is your waste. Waste is a number that you want to control, and the only way to control it is to actually put a program in place to do simple food costing.

So again, the benefit of understanding and implementing food costing is that it creates an awareness of exactly where the price, the recipe mix, and what the results are generating from every action that you put into the menu.

It puts the owner and the PFG food supplier in control of the food costs. Bottom line, you’re duplicating what the chains know, what independents don’t have the money to do, and if it’s successful for the chains, it’s successful for the independents.

What do the chains know that you need to know?

• They know that their menu is their marketing plan.
• They know that their menu prices align with their cost to produce a profit.
• They know the menu items that produce the most revenue.
• They know when menuprice changes are imperative.

If someone asked you “Which menu item gives you the highest profit?” could you provide an answer? The reality is most operators don’t know. They have a gut feeling, but they don’t know exactly. The difference between a gut feeling and knowing exactly can mean the difference between a profit and a loss.

So what do the chains do? They use one reliable trustworthy source for goods and services, we call that a prime vendor.

At first this might seem totally contradictory. Shouldn’t you keep your suppliers honest? Won’t buying from two or three different suppliers keep the costs lower?

The reality is that juggling multiple suppliers takes you away from what should be your primary focus, the customer.

Franchises invest the majority of their time in the area that produces revenue – the customer experience. In order to do that, they must have a system.

They have a system that creates consistent results day after day, and that’s it. They have a system that creates the same hamburger at the same location, every location every time they make it with any employee each and every time. What we’re doing with CommandoPOS is bringing systems at the franchises have implemented, have paid for, have developed, and make those available to independent operators.

An essential part of that system is knowing your food costs down to each item. The franchises typically have one supplier for this reason.

For example, with CommandoPOS, PFG clients can now apply food costs to their sales in real time. They can see by hour what their profit margin is. This level of control is now available to independent restaurant owners.

How It Works

The Performance Food Service representative sits down with you and breaks down your menus and recipes. It’s simple. You take your menu, you break it out in categories, you basically look at each menu item, and you break down the recipe for each menu item.

We’ve generated, through Commando POS, a place on the internet at www.commandopos.com to enter the information. This information is then housed on the internet and accessible 24/7.

It also is available not only 24/7, but it’s available to make changes. In the event that you want to change your menu, if prices change through Performance Food Service, basically, you’ll be able to go in there and see the new desired results when you change your recipes.

The next thing that happens is we merge your cost and sales information together.

This enables you to see your sales mix from your point of sale data (basically daily sales, how much of each menu item you sold on a daily basis), and then you will have invoice data, which provides current pricing. And what that does is it gives you the ability to have a real time menu analysis.

So the next is to contact your Performance Food Service AM, and decide if you really want to find out what is your highest profit margin item that is on your menu. And if you’re even considering adjusting your menu, if you ever thought of adjusting your menu prices, this is a simple tool to work hand in hand in partnership with your Performance Service AM, and develop and have quantifiable results and actual numbers that you can look at and modify on an ongoing basis.

This process is not static – it’s dynamic. Prices change, behavior of customers change, so you need a real time food costing menu analysis program that you can update based on the environment of where each restaurateur is located and what’s happening in the economy. So contact your Performance Food Service representative, and get started.

You wouldn’t get on a plane if your weren’t comfortable that the pilot budgeted the amount of fuel needed for the trip? You wouldn’t enter into a long term lease in a strip mall for ten years without budgeting your restaurant cash flow to ensure you pay the lease since nonpayment may lead you to bankruptcy due to personal guarantees? You wouldn’t sign a contract with your food supplier without budgeting your profit margin that might cause your food costs to generate a negative cash flow immediately? And on, and on, and on.

Setting up a budget may be one of the few ways you can seize control of your restaurant finances before allowing matters to drift towards disaster.

Disaster can take many forms, such as:

• Not being able to take advantage when opportunity knocks like a greatly reduced piece of equipment that would double your sales.
• Having your credit tarnished, or worse!
• Seeing yourself forced to file for bankruptcy due to cash flow shortages.
• Budgeting can help ensure you don’t spend more money than you earn. A budget is simply an accounting of your income and expenses during a certain period of time, usually a month or a year. It involves looking at how much money you expect to earn and then determining what you can afford to spend.

Having a budget does not prevent you from spending money, using credit cards, or taking out a loan for special purchases. Instead, a budget encourages you to be certain you can afford what you’re buying and guides you through what lifestyle changes, if through what lifestyle changes, if any, you’ll have to make in order to pay for it.

Having a budget does not prevent you from having fun! On the contrary, a budget gives you greater freedom to spend the money you earn. Trust this advice: It is a far better thing to have control of your budget, than to have your spending control you!

I don’t have time to sit down and work on my budget! I just wing it and I have done just fine! I operate the restaurant by my “gut.” Here is the reality. Every employee, organization, vendor, customer who comes into contact with your restaurant is expecting the owner at the helm to ensure that sound business decisions are in place to not be hurt by doing some form of business with you and your restaurant. You are creating trust with each one of these parties. Frequently comparing your actual results to an established budget allows an owner to possibly raise a white flag for help sooner than later. Toss the ego aside and become accountable.

First of all a budget is the place where you tie all of the rest of your planning down to numbers and also timing. For example, if you need to buy a piece of equipment you need to know when you are going to order it so that you can have it on time to open the business and you also have to plan for the money necessary to buy that equipment. So the budget becomes the place where you can tie all those things together.

Beyond that the budget is the roadmap where you believe you want to go so it helps you set goals in terms of what revenue you want to achieve. And it is also a way to track those goals. So it provides a great tracking tool and beyond that it puts a discipline on yourself to do all the homework necessary to get into business because you have this opportunity to look forward and ask: What do I need to buy? What do I need to have in place? Finally it’s a way to measure your success against your expectations.

Where do I start? First, start tracking simply your cash flow for the next thirty days. Start identifying monies in and monies out. If you have a point of sale system you can start accumulating menu items that are moving and ones that are not. You can perform some basic food costing to ensure your profit margins are adequate to pay for your fixed expenses. Keep a diligent record of your cash in a spreadsheet form. Balance your checkbook in entirety. Don’t give this responsibility initially to your outside accountant. Do it yourself first.

Secondly, now you are in the habit and this process of tracking your monies monthly needs to continue until you start seeing a trend. Restaurants are affected by outside environments: holiday, school, birthdays, weather, events, so you get the point. Therefore when you have tracked each month based on your activity at your restaurant you now have a roadmap of expected activity to budget and look forward to anticipated revenue and expense for your restaurant.

Finally, sit down with your accountant and compare your budget to actual results that have been reported on the entity tax returns in the prior years to fine tune the expected revenue and expenses you alone have identified. History has a way of repeating itself and numbers don’t lie! Ask “why” about every revenue and expense identified. If you are a new restaurant then you must accumulate data from the national restaurant association or some other reliable source. Many local cities have demographic information based on buying patterns of consumers of existing restaurants. The SBA (small business administration) has agencies that can assist in free demographic studies which are then used in the creation of budgets for lending purposes.

Create a culture at your restaurant that tracking numbers is important to your restaurant! Managers make bonuses. Employees make bonuses based on even cash drawers. It all starts from the top. If it’s important to you it will be important to all employees in the restaurant operations. Think of budgeting as a tool that will provide a roadmap to one question all owners say to me, “Where’s my Cash?”

Question:

Answer:  We have been flooded with these requests lately and here is what we have found to greatly assist in the process.

First, understand that most lending institutions or bankers do not understand your operations to the degree that you do.  Therefore time needs to be spent on clearly stating your loan intentions meaning exactly what you plan to spend the money on and how you will repay the bank.

Ask your accountant or do some due diligence yourself in finding out about the average commercial loan rates available and create what they call an amortization schedule of loan repayment.  Most banks will have a standard set of terms or loan covenants that will be required for your new loan which you must comply.

Next, determine if your entities cash flow can handle the new debt that will be added to your operations.  Banks today look at what they call “EBITDA or (Earnings before Interest Taxes Deprecation Amortization)” to determine if your restaurant has the ability to pay back the monies borrowed.  Basically you or your accountant can assist the bank to understand your cash flow by ensuring they follow this formula.  Your profit and loss statements should clearly identify interest, taxes, depreciation and amortization so that the bank can add back these expenses to your net income to arrive at a modified cash flow from your operations.  Sounds confusing but this are where your advisor needs to assist the bankers to understand your cash flow and ability to repay the loan.

Second, the banks will require copies of your restaurants prior and current year’s financial statements and tax returns.  Usually anywhere from one to three years prior and if your applying for a loan midyear they will want a current one that reflects the last three months operations.  For your quickest delivery of these documents ask your accountant if they have an online electronic way to deliver them securely over the Internet so that you can direct the bank to a secured website to download them at their leisure.  I have found that providing documents easily and securely expedites the loan process as well as adds credibility to the operator’s organization and character assessed by the lenders.

Finally, here is a note on “Character” of the operator in the eyes of the bank.  Banks lend monies based on Character and Capacity.  Capacity is the ability to repay the monies as discussed.  Character is a subjective way of determining organization, reputation, credit score, community involvement, and experience in the trade, professional advisor associations, and reputation as a restaurateur.  Do not underestimate this assessment when applying for monies at a bank or any lending institution. Take the time to put your best foot forward when having any interactions with the bank including source document gathering and personal interviews with the lenders.

Question:   Why do I pay extra payroll taxes in the first part of the year?

Answer:  Most states have an unemployment insurance contribution system that is applied usually to the first amount of wages for each employee up to a maximum in a year.  For example, the California Unemployment Contribution rate is 1.5% to 6.2% on the first $7,000 of wages earned for each employee.  Therefore in the first quarter of the tax year you will have increased employer payroll taxes that are due and payable that is not withheld from the employee paychecks but are contributed out of the employer’s side.  This can be a shock if all of a sudden your quarterly payroll taxes are due and these amounts have not been budgeted or accounted for in the cash flow.

There are methods of reducing these rates primarily by controlling your hiring and firing employee practices.  Employee retention is costly and this unemployment insurance mandated by most states is a direct effect of having excessive turnover in your restaurant.  First, contact your accountant or payroll service provider to determine the employment insurance rates in your state and then start inquiring how to reduce the rate.  Find out how other restaurant owners are managing their employment practices to keep this rate down.  Actually have a national payroll service provider provide a quote on processing your payroll and inquire about best practices for restaurants to manage this rate.

Question:

Answer: It’s called internal control.  First, print a daily sales report from the point of sale and from your credit card machine if a standalone terminal.

Next create a system or worksheet that compares the total daily sales to the cash and credit cards accepted along with non cash transactions, paid outs of cash, and tips.  The result of this close out worksheet will be a calculated daily cash bank deposit and the credit card charges for the day along with the over/short for the day.

The following day you will use a system to go online to your banking institution and verify that the cash calculated in your close out worksheet the night before agrees to the following day’s cash bank deposit and the credit card batch total from the day prior agrees to the activity being credited to the bank usually two days later.  You should create a system or worksheet to track daily sales as you compare them to outside sources such as online banking and credit card activity.  Don’t procrastinate.  Discipline yourself to perform this task daily.

Ideally you want to segregate the individuals responsible for creating the daily close out worksheet from the employee that makes the cash deposits in the bank and the person that verifies that the actual monies were credited to the bank on a daily basis.  Understandably with a small pizzeria with very few employees at night these tasks may have to be performed by the same employee.  Regardless, determine a way to separate these duties to allow for cross checking the accuracy of the restaurant numbers.

Never assume that the “trusted manager” that you have known for years will never purposely misstate a cash deposit or claim that the deposit was lost or bunching up daily deposits and making two or three days cash sales all at once.  It’s usually always the employee that can talk their way out of missing cash since no previous event has led the owner to believe otherwise.

Consider procedures to identify kickbacks from food vendors to employees (generally the chef or person doing the buying taking a commission and making the restaurant pay more for the merchandise); or vendors delivering supplies weighing less than the amount stipulated on the invoice ( indicating a possible collusion between the person receiving the merchandise and the delivery driver).  A solution to deterring this perpetration is to have the employees perform a different task when the food orders are delivered to the restaurant allowing you the owner to perform the task.  Verify vendor purchases to online invoice reporting similar to online banking provided by the vendors to determine completeness of an order.

Question: I use a cash register?  Does the process change?

Answer:  The only change will be that the Daily Sales report from a point of sale will be in the form of a Z tape which identifies all menu items sold per day or shift.  This lengthy cash register tape will then be your starting point to prepare the daily cash close sheet.  From here the process to verify the calculated cash deposit and credit card batch totals crediting your bank is the same.

Again, we advise to segregate the functions performed by employees of actually printing the Daily Z Tape and counting the cash and making the cash deposit including the daily credit card charges.   The owner should consider cross training employees, forced absences, varied scheduling, and other methods of allowing multiple employees to perform similar tasks. This creates an environment with the wait staff to not become comfortable at any one position or develop associate friendships and allow for collusion and therefore the monies do not make it to the bank.

I cannot stress enough to ensure you have the procedures in effect at the restaurant to enforce DAILY tracking of cash and credit card activity and comparing the balances to the bank activity.

Question:

Answer: For some background, the field of ethics is involved in defining behavior as good or bad. People in business generally have as their primary motivation increasing profits. If we assume that people will not behave ethically simply because it is the right thing to do, then there must be some additional incentive or motivation for people to act in an ethical manner.

One obvious motivation for a CPA is the fear of sanction or punishment that can come with noncompliance or simply assisting the restaurateur in not reporting cash transactions for instance. No CPA would reasonably do something that he knew could result in the loss of his license to practice because such action would threaten the person’s livelihood.

But there are other reasons that the CPA should be concerned about following ethical rules. First, being ethical is the right thing to do. Second, being ethical will often lead to better assisting the restaurateur down the road in representing the client for a bank loan or possibly selling the restaurant.

For example, if John, a CPA, serves a restaurateur that offers John a cash bonus if he will agree not to report all of the Restaurants income, John might be faced with a predicament. John might ask: “Who does it really hurt if we underreport our income and pay less corporate tax?” At the same time, John might need the extra money being offered by the Restaurant so that his son can get a potentially life-saving operation.

There is little doubt that to accept the payment in return for signing a knowingly false tax return violates the professional rules of ethics and you as a restaurateur are placing him in that position when you ask your CPA or bookkeeper to aid you in hiding cash transactions, underreporting income, or other operational deviations from the normal protocol of accounting.

Remember, there will come a day in your restaurant existence when you will need your CPA or accountant to go to bat for you representing the integrity of your financial affairs and the last thing you need at a critical time is for your trusted advisor to pass on this request.

Question: Why is it that if I try to pay minimal taxes to the Government that my banker penalizes me for that?

Answer: This is the age old double edge sword in building a business. Since most bank loans are based on the ability of a restaurant operations cash flow the further you reduce your net income the harder it becomes to qualify for a loan.

Reducing your corporate tax obligations to the fullest extent does retain cash in the business to help grow the restaurant operations. But just recognize that this strategy lowers the restaurant’s reported net income from operations which is the starting point that lenders use to calculate whether your cash flow adheres to their lending guidelines. Simply put coordination with your CPA or accountant to look into the future and determine if accessing third party debt is on the horizon and ensure that various tax saving or deferral strategies match your goals for the restaurant.

For example, depreciation of equipment and restaurant leasehold improvements is a tax deduction that allows for the expensing of the cost of the asset over a designated period of time. Some methods of depreciation are allowed to “write-off” the assets over a shorter life than others which creates a larger expense against net income in the earlier years of the asset reducing net income. Most lending institutions will add back these tax deductions to net income to determine true cash flow of the restaurant if clearly stated on the financial statements and many times have to be explained to the banker.

Bottom line is to always be looking ahead in determining your possible cash flow needs of the restaurant when the tax man starts talking to you about tax saving and deferral strategies. A simple question is how these strategies will affect my ability to borrow money in the future.

You can visit us at www.rasmussentaxgroup.com for additional insight into restaurant specific tax strategies, accounting and technology programs. To ensure compliance with requirements imposed by the IRS, we inform you that any US federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and it cannot be used for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein. You should seek advice based on your particular circumstances from an independent advisor.

First, the restaurateur was randomly selected for losses from rental activity on his personal tax return. The auditor requested lease agreements from the entities where the rental income was being reported. The goal was to match up rental income per the lease agreement to payments received in the rental property checking account to rental payments made from the S Corporation entities being reported as rental expense. Since there was only one checking account for all rental activities we had to prepare an exhaustive excel spreadsheet that clearly identified all deposits by rental property that were made into the checking account for that tax year. The taxpayer had refinanced several of the mortgages that year so you can imagine the time it took to specifically reconcile all deposit activity and transfers entered into the bank accounts for five properties for a tax year three years in the past!

Suggestion: At the end of each tax year ensure your CPA prepares a bank deposit audit matching the income and expenses between related entities. In an IRS audit the auditor is required to investigate sources of rental income if they come from related parties as they did in this case from personally owned S Corporation entities operating the restaurants. Also, as confusing as it can be keep separate checking accounts be very disciplined to not deposit any funds not related to that activity. The IRS auditor challenges all deposits as unreported income until the taxpayer proves otherwise if there is a difference.

Secondly, as can be expected one of his restaurants was underperforming and reported net operating losses. These losses were funded by profits by several of the other entities basically by distributions from his profitable S Corporations and direct capital fund injections to the poorly performing store. The tax issue was the deductibility of the current period taxable loss reported on the individual’s tax return from the poorly performing store. The IRS was able to open up this tax issue in addition to investigating the rental income and expenses reported since the taxpayer owned a related party entity that generated the rental income (S Corporation). The IRS auditor wanted to ensure that the profitable entities were not just transferring monies directly to the unprofitable entity since this does not give stockholder basis allowing the restaurateur to deduct the losses on his individual income tax return.

Suggestion: There is a concept called “commingling of funds” that is a target to audit the substance of these transactions between related parties. Separate accounting is required for each activity preferably through separate checking accounts. The method that the auditor’s utilize to identify discrepancies is through a bank deposit audit reconciling all bank deposits and requesting the taxpayer to identify each deposit. Related party transactions create related issues and are targets to investigate on your personal tax return. Ensure your CPA is provided a road map of all related party transactions and a detailed stockholder basis worksheet of monies funded and transferred between related entities.

Finally, the IRS auditor prepared a bank deposit audit on the restaurateurs’ individual bank account to determine if there existed unreported income. For example, after an initial interview with the taxpayer it was represented that all income from all sources was reported. We were required to identify all bank deposits for the entire tax year that were deposited into the restaurateur’s bank account to pay personal bills. Wages, dividends, and yes rebates from distributor vendors were some of the major deposits. Unusual deposits were distributions from the S corporations and a few rental checks that were deposited incorrectly into the personal checking account versus the rental checking account. Interest earned and gifts from other family members had to be identified to ensure all deposits were reported for income tax purposes.

Suggestion: At the close of each year take some time to create an excel worksheet and identify all bank deposits from all of your bank accounts for the tax year. A better practice which we advise all of our clients are to perform this task monthly. This will provide the road map regarding any money transfers to entities owned by the restaurateur during the year especially when calculating deductibility of business losses.

Good news is that we exited the audit with a “No change” which means no tax adjustment. After 25 years of performing audits I have never seen routine audits become so exhaustive and the web of information the auditors are requesting in search of additional unreported monies. With employees not showing up, distributors not delivering, customers complaining, and sales down from last month accounting and taxes are understandably at the bottom of priority but your CPA usually has some down time over the summer months and a reduced fee analysis of your situation might be in order to shore up documentation that might be missing.

Question:

Answer:Most accountants do not specialize in one area of accounting or taxation. Most bookkeeping firms just take on most any client who is willing to use QuickBooks or the like and pay a monthly fee. A restaurant operation is a unique animal and you need someone who understands “paid outs” or “cash over/short” or “tips” or “employee theft.”

With the tough times that we are in we need to make that tough call and get a second opinion. Start by getting a current engagement letter from your accountant. This is a document that an accountant provides a client detailing out exactly what services will be performed, when and the associated fees. Once you receive this letter review it to see if all of the tasks are being performed on a timely basis as well as the fees matches the services.

Next, ask another restaurant operator or for that matter another business owner that you respect and find out if you can speak to their accountant over the phone or to meet in person. Tell the new accountant you are looking for someone in the restaurant industry that you can bounce off ideas with in addition to your current accountant and possibly switch if the right match comes along. Ask for their resume and a few customers to contact for references. This process may take some time but your gut is giving you signals to keep searching.

Once information is gathered on how other accountants service and charge their restaurant owners regarding fees a decision can be made in comparison to the fees, services and products being received currently. In the end a checkup is always healthy to keep your current accountant on their toes and knowledge that is gained about the competition.

Question: My credit card fees are just too expensive. How do I compare them?

Answer: I have learned that credit card fees change like the monthly cellular telephone charges and plans and if go unchecked they will continue until challenged.

I have my clients every six months perform a rate analysis check with a competitor to determine rates being charged are in line with the industry. Credit card fees have become a commodity and once the installation has occurred not much is done to control the costs or charges. If becomes automated with an 800 number at that point.

Therefore the devil is in the details and it is appropriate to have your statements compared. There are many companies willing to make a comparison of rates with you very quickly. Once this analysis is received the next step is to contact your current carrier and ask for a reduction in fees or rates if appropriate. It never hurts to ask.

Inquire whether all of your transactions are available online for viewing and backup. Do some due diligence to find out which company the promoter processes all of their transactions through and see if you recognize that back end processor. Contact your accountant to confirm whom you are processing your transactions with along with your bank for a second opinion. Ask questions. Get to the bottom of the major fees charged and how your restaurants current volume of transactions stacks up to different credit card processors. The credit card industry is known for not having transparency so during your investigation you may come across some land mines of individuals that won’t provide information or get offended in due diligence. I recommend keep digging and asking questions.

If a decision is made to switch make sure that termination fees from your current carrier are considered and to negotiate these types of fees with a new carrier in the future. Be aware the original contract you signed may have many termination clauses that need to be checked before a switch is made. After a little investigation it’s amazing what one will learn and uncover.