OVERCOMING RESTAURANT BUSINESS CHALLENGES WITH MATTHEW STURGES
As the Outsourcing Services Leader, Matt’s emphasis is on client service. He delivers quality service, develops strong relationships with our clients and acts as a champion of change. Matt works closely with BDO Canada’s leadership to deliver innovative technology solutions that help drive the best client experiences. Matt has over twelve years of experience with Canadian businesses, providing practical solutions to drive growth while maintaining compliance and helping to achieve their business ambitions. During this time, he has worked with clients ranging from early-stage development to multinational corporations with specialization in franchise businesses and multi-company portfolios. Combining his industry knowledge and client-facing approach, Matt works collaboratively with business owners to understand their unique challenges and deliver integrated solutions that fit the needs of the business.
A new BDO Canada survey has revealed that 43 per cent of restaurant owners and operators feel confident that their current bookkeeping payroll practices provide an accurate picture of their financial performance. Why do you believe that is?
This is a concerning finding but is also a reality that we hear frequently when consulting with new clients. We believe that this result is driven by two critical factors:
Inexperience in financial reporting and accounting
Restaurant owners generally go into business for the love of food or the love of a brand. This passion is one of the most incredible elements of the food service industry in Canada.
Unfortunately, many operators lack experience or adequate training when it comes to their finance – 32 per cent of survey respondents noted inexperience with bookkeeping and payroll as a key pain point.
New franchisees often find that the operations training provided by their franchisor provides a solid foundation for operational excellence in food service and guest experience. However, this focus on menu and quality too often does not extend to finance and accounting. Franchisees report too little time spent on the demands of financial reporting or how to properly analyze financial statements.
Lacking time available to spend on reporting
The restaurant industry is fast–paced and demanding. Owners are finding most of their time is occupied with the core values of the industry – delivering excellent guest experiences visit after visit.
With competitive pressures increasing the demands of owners for restaurant operations, 1 in 5 of survey respondents agreed that they didn’t have enough time to manage bookkeeping and payroll.
What are some of the changes that need to be implemented to resolve this issue?
The good news is that improving confidence in financial reporting and payroll may not be as complex as it seems on the surface.
Restaurant owners can take a number of small, simple steps to improve their confidence over the financial reporting process:
Ask for help to properly read and interpret financial statements
In order to gain confidence over the accuracy of financial reporting, restaurant owners need to learn how to ask the right questions.
There is a vast amount of resources available to help owners improve their financial acumen. This starts with conversations with your professional advisors – be comfortable asking questions when you don’t understand a result or to ask for help reading financial statements.
Franchisees can also consult franchisors. Franchisors have a vested interest in franchisee success and will provide support for business owners to get a handle on financial reporting.
Partner with a trusted professional
Focusing on the restaurants core operations including guest experience, is more important than ever before.
Ultimately, restaurant owners are in business to make money. To maximize profits, owners must have diligence over financial reporting and partnering with the right professional will provide significantly better insight and financial visibility to make better business decisions.
Do you believe that the implementation of technology and digitizing tasks will improve efficiency and contribute to the success of their business?
Without question, the implementation of a carefully designed technology stack will help restaurant owners to strengthen their business. Implementing a robust and scalable technology stack will provide a foundation to drive improved operational and financial performance through:
• Scheduling staff and improving labour utilization
• Streamlined inventory ordering
• Identifying and reducing losses to scrape/waste
• Providing visibility to location/unit performance
The technology ecosystem available to restaurant owners is more expansive than ever before. A surge in cloud technologies and solution development specific to the restaurant industry has resulted in a vast inventory of applications worthy of consideration – across front of house, back of house, mobile ordering apps and merchant services. This proliferation of application development for the restaurant industry has made it difficult for business owners to gain comfort over the solutions that they select.
Restaurant owners should work closely with trusted accounting and technology partners to select components that provide the most flexibility to adapt to future developments and offer the best opportunity to scale.
Survey results show that only 43 per cent of respondents are outsourcing their payroll and only 41 per cent are outsourcing their bookkeeping to experts. What do you believe is the main cause behind these statistics?
Outsourcing services has traditionally been considered a costly and challenging endeavour. Often, outsourcing back office functions resulted in additional trips away from the restaurant to drop off records and long delays in receiving financial reporting in return; rendering the process largely impractical.
But, significant developments in technology and innovative new solutions from outsourcing partners has increased the opportunity for local/on-shore accountancy services delivered over the cloud.
These developments have created better opportunities for restaurant owners to move away from traditional on-site or in-house solutions and to find industry experts across the country that meet the unique needs of their business and provide the best opportunity to realize personal ambitions.
In your expert opinion, what is the biggest challenge that restaurant owners face when it comes to outsourcing their services?
Restaurant owners may be concerned that outsourcing their back-office could result in a loss of control over a core part of their business.
In fact, the reality of today’s professional services and technology environments have created better insights and visibility to finances and business performance than ever before. Technological innovations have provided significant improvements in the ability for owners and their advisors to share and collaborate better than ever before. This has removed many barriers and helped restaurant owners to trust the right partner.
Cloud technology has provided for real-time access of the accounting system and analytics while providing an opportunity for business owners to retain core functions that they wish to keep (cheque printing/ supplier payments) while outsourcing other essential non-core elements (cash reconciliations, GST/HST reporting).
To be successful, restaurant owners should select a partner that:
• Has a deep knowledge of the industry and nuances specific to their brand
• Can seamlessly fit into the business while enhancing, not disrupting, current operations
• Is available to add value to the business; not simply deliver on the transactions
On a final note, how do you see the future of the restauration industry? How will technology impact the future of restaurants?
This is an intriguing time for the restaurant industry in Canada. Restaurant owners face a challenging reality; consumer expectations of convenience, in-restaurant experience, and overall quality of food and beverage offerings are intensifying.
What is certain is that technological innovation will move rapidly and result in significant disruption across all categories. We are closely following a number of emerging technologies including Robotic Process Automation (RPA), big data, machine learning, autonomous vehicles and more.
To win, restauranteurs must adopt a digital mindset. Operators should carefully review their infrastructure with a view to implementing technologies that strengthen the ability to manage operations, connect with guests and provide a strong foundation for multiunit scaling.
More than ever before, restauranteurs need to spend time focusing on what they do best and partner with professional advisors that bring a deep knowledge of the industry but that can also help to drive strengthen business intelligence and data analytics. The most successful businesses in the near term will be making strong data-driven decisions.
With the rapid pace of change, restaurant owners must find new ways of setting themselves apart without losing sight of the core value of hospitality–service.