What Changed in Your Engagement Letter — A Plain-English Guide

We've updated our engagement letter, and because you'll be asked to sign the new version, we want you to know what actually changed before reviewing. This guide covers every change that matters, compared against the letter you signed. It's written to be read, not skimmed, but if you only have two minutes, the section headings will carry you through.

One housekeeping note up front: this guide is a summary for your convenience. The engagement letter itself is the agreement, and where this guide and the letter differ, the letter governs.This summary does not omit your obligation to review the engagement letter. If anything here raises a question, ask us.

WHY WE UPDATED IT

The old letter had some problems that only showed up over time: a few terms were vague enough that they could be read differently, elimination of some discrepancies, and several things we actually do — like recording meetings for accurate notes — weren't described at all. The new letter says what we do, plainly, and in one place. Much of what follows makes existing practice explicit rather than changing it. Where something genuinely changed, we say so directly.

THE CHANGES THAT ASK SOMETHING OF YOU

We'll start with these, because they're the ones you'd most want to know about.

The finance charge on late balances is now stated exactly: 18% per year, 1.5% per month, on balances more than 30 days past due, calculated from the original due date. The old letter said finance charges "will be assessed" without saying how much, which wasn't fair to anyone. Now you know the number. This likely won't affect you, as billing is automatic.

Payroll data is due Tuesday at 11:59 p.m. Eastern. The old letter said timecards and tip reports were due "36 hours prior to payroll submission cut-off," which required math and an assumption. Now it's a fixed time you can put on the wall by the office computer. If data comes in late, we run payroll at the soonest practical opportunity — but a late Tuesday can mean a late pay date, and the letter now says plainly that the consequences of that sit with the timing of the data, not with us.

Month-end requests are due one business day before the close deadline. Previously "within 24 hours," which broke down around weekends. Same idea, clearer clock. Relatedly, the letter now says out loud what was always true in practice: if unanswered requests cause a filing, payroll, or reporting deadline to be missed, that consequence follows from the missing information.

We book what you send us — so guard your channels. A new section states plainly that we rely on the information, invoices, approvals, and payment instructions that come through your established channels — Hubdoc, your email, your people — without independently verifying them. That's what makes bookkeeping affordable; we're not a fraud-detection service. The place this matters most: vendor payment changes. If a "vendor" emails new bank details, we are entitled to rely on it if it arrives through your channels — so the person who should verify that change with a phone call to a number you already trust is you, before it reaches us. This is the single most common fraud in restaurants right now, and the letter now assigns the checking of it where it can actually happen.

You'll purchase your scanner, and it's yours. Previously we "issued" a ScanSnap, which left ownership murky. Now you buy the model we specify, we help you set it up, and it's your property — you maintain it and replace it if it's damaged. When the engagement ends, you can keep it or return it in working condition for a $250 credit on your final invoice.

Advisory meetings have clear rules now. What counts as a missed meeting is defined: cancelling with less than 12 hours' notice, not joining within 10 minutes, or rescheduling the same meeting more than once. A month where you simply don't book a meeting is not a missed meeting. If two meetings are missed in a rolling three months, we may switch you from a standing appointment to scheduling each month's meeting yourself — the meeting is still yours every month either way. And to be equally clear in the other direction: fees don't change based on whether you attend, so an unused meeting is money on the table. Book them.

Multiple Tip Pools are ripe for errors. One tip pool is easy, three creates a bunch of issues. With every additional pool and employee, there is an mathematically exponential increase in the risk of error thanks to a simple formula error. It's a risk we simply cannot take anymore, so if there is more than one tip pool, we will ask you to use a tip management software.

Advisory Services no longer include Budgets or Projections: These services are still available, but some clients never used them, other clients used them multiple times a year, and it takes a considerable amount of time to produce and input, so we have moved them to OOS services.

The letter now says when we can stop immediately. Either of us can still end the engagement with sixty days' notice — that hasn't changed — and we can now also end or pause specific services rather than everything at once. What's new is a short list of situations where we may terminate or suspend immediately: sustained nonpayment, and fraudulent, unlawful, or dishonest conduct. We'd rather never use it, and if you're the kind of client reading this guide, it likely will never apply to you — but a professional services agreement should say where its edges are.

THE CHANGES THAT PROTECT YOU

We removed our blanket right to use your name in marketing. The old letter said PFA "reserves the right to use clients' names in marketing materials.” Using your name or your story is now governed by our confidentiality obligations, with anything beyond the basics requiring a conversation with you first.

Out of scope billing process is more clearly defined. If we need to do some work outside of the scope of our engagement, we will confirm via email with an estimated time allotment. If we come up against that allotment we’ll let you know. 

If your information is ever involved in a security incident, we tell you. The new letter commits us to notifying you promptly if information of yours in our possession is subject to unauthorized access, with what we know and what we're doing about it.

We disclose how we're paid by software vendors. We participate in accountant and partner programs with some of the platforms you use — Gusto, QuickBooks, and others — and may receive discounts or referral compensation from them. The new letter says so outright, along with the two things that matter: it costs you nothing, and it doesn't drive our recommendations. Suitability for your business is what is most important. You can ask us about these arrangements any time.

No more cards on file with us for subscriptions. The old letter required a credit card number for apps we paid on your behalf. That's gone. You subscribe to your platforms directly — QuickBooks Online, Gusto, BILL, 7shifts, your point of sale — at the vendor's own price, billed straight to you. We pay for Hubdoc and Shogo ourselves; they're included in your quoted fee and never billed to you. If we ever agree to pick up some other cost for you, it's rebilled at our actual cost, with your written approval before we spend it.

Who can see your information is now spelled out. The old confidentiality clause named your bankers, attorneys, and accountants. The new one adds, honestly, the other category that was always true: our own employees, contractors, technology providers, insurers, and professional advisors, but only where they reasonably need it to serve you.

Your agreed thresholds are written down where you can get them. Your reserve cash level and the materiality thresholds we use when flagging variances are recorded in your accounting profile, provided to you on request, and changed only when both of us confirm in writing. No more relying on the memory of an onboarding call.

Your records come back to you, on a schedule. If the engagement ends, everything you own comes back within 90 days, in digital form, at no charge which was true before and stays true. What's new is precision about afterward: once your records are returned, keeping them is your responsibility, and we retain an archival copy for the balance of the seven-year retention period for our own professional obligations. Speaking of which, the seven-year retention now explicitly includes email correspondence about your engagement, not just documents.

THE CHANGES THAT DESCRIBE HOW THE WORK ACTUALLY RUNS

Cash and credit card reconciliation: weekly. The old letter managed to say two different things — "monthly" in one sentence and "twice-weekly" in another. The new letter settles it: reconciliation runs weekly, contingent on your bank feeds, with the same monthly detailed reconciliation report you can hand to your tax preparer at year end. One cadence, stated once.

Bill payments run through a payment platform. The letter now describes how accounts payable actually operates: a third-party payment provider executes the payments — mailed checks on the weekly schedule, and now also electronic payments (ACH and virtual card) — paying vendor invoices on their terms as cash flow allows, with vendor statements reconciled against invoices. Same service, described the way it really works, with electronic payment options the old letter never mentioned.

Meetings may be recorded and transcribed — with your agreement, every time. We use meeting software that produces transcripts and summaries so that what we agreed on a call doesn't depend on anyone's memory. The new letter describes this: recording is announced at the start of a meeting, anyone can object and we'll take written notes instead, recordings are confidential engagement records, and we will never use one in marketing or external training materials without your separate written permission.

Your books are kept on the accrual basis, structured to be consistent with GAAP with our deviations from GAAP noted. Bookkeeping at a monthly cadence involves standing simplifications — in how depreciation, inventory, leases, and a few other items are treated — because the GAAP treatment requires information only you hold. Each departure is documented, and we maintain a written policy describing all of them and their effects, available to you whenever you'd like it. Your statements are excellent for running your restaurant. What we won't do is represent them as audited or GAAP-compliant to anyone, because they aren't — and the letter now says exactly that instead of implying otherwise.

What we advise on — and what we don't. A new Scope of Advice section draws the line plainly: bookkeeping, accounting, payroll, and related advisory is our lane. We don't provide legal advice, employment law advice, benefits, investment, or insurance advice, and the letter says so, so nobody mistakes a conversation for coverage. When your situation needs one of those professionals, we'll tell you — and happily work alongside them.

Reports going to your lender, landlord, or investor follow a defined path. Statements we prepare are for your internal use. When you need them to go to a third party, we arrange it — with our written permission, and with a disclosure on the face of the report stating that the statements are unaudited and prepared from information you supplied. That disclosure protects both of us, and the letter asks that it never be removed or separated from the report. If a lender wants to formally rely on our work, that's a separate conversation with its own process — send them to us.

Payroll is on Gusto. The old letter said "Gusto or other PFA approved payroll platform," which invited a negotiation the letter never resolved. The new one is direct: Gusto is the platform, and any exception has to be approved by us in writing before it takes effect. Custom reports beyond your standard package work the same way as other extras — if a report takes meaningful time to build, it's billed hourly, and we tell you and get your written go-ahead before starting.

The engagement renews automatically on a schedule you can see. A new Term and Renewal section sets the rhythm: the engagement renews each October 1, with a revised proposal in your hands at least 30 days beforehand — so fee changes arrive as a document you can read, on a date you can predict, never as a surprise on an invoice. There is an annual escalation clause of up to 5% that does not require a reissuance of the engagement letter. During renewal season someone at our firm spent an entire month chasing down clients to resign an engagement letter without any material change. 

Text messages are now a separate, optional choice. The old letter bundled texting consent into the engagement itself. We've pulled it out: if you'd like text reminders and notices from us, there's a short standalone consent form presented upon signing your engagement, entirely optional, and declining it changes nothing about your service or fees. The full program terms live at prixfixe.accountants/smsprivacyterms.

WHAT TO DO

Nothing, until your renewal — the new letter comes with your next proposal, alongside the optional text-message consent. Read it; this guide should make that quicker. If anything in it doesn't match your understanding of how we work together, tell your accountant before you sign, not after. That's the whole point of writing things down.

The Software We Work With — and Why It Matters

One of the first questions we ask every new client is: what software are you running? It's not small talk. The platforms you use to manage sales, pay vendors, run payroll, and track your books directly affect what we can do for you — and how efficiently we can do it.

This post covers the platforms we require, the ones we support, and what happens if you're running something that's not on the list.

What Every Client Is Required to Use

Regardless of which services you've engaged us for, these platforms are standard:

• QuickBooks Online — Your general ledger. Everything runs through it.

• Hubdoc — How we collect your vendor documents and receipts.

• BILL — For bill payment and remittance.

• Gusto — Our standard payroll platform for tax filing, benefits administration, and payroll processing.

• An approved point-of-sale system — More on that below.

You'll also need to maintain three separate bank accounts — Operating, Payroll, and Taxes — at an institution that supports a QuickBooks Online feed. If your current bank doesn't support that connection, we'll need to address it before we can begin.

Approved Point-of-Sale Systems

Your POS is how we get your daily sales data into QuickBooks. We currently support the following systems:

• Lightspeed

• Revel

• SpotOn

• Square

• Toast (point-of-sale only — see note below on Toast Payroll)

If you're on a POS that isn't on this list, it doesn't automatically mean we can't work together — but it does mean we'll need to have a conversation before we start. Manual entry of daily sales data is out-of-scope work and is billed at $150/hour under your engagement letter. We'll always notify you and get your written approval before that work begins.

Lodging Clients

For clients with hotel, inn, or short-term lodging operations, we work with the following property management systems:

• Cloudbeds

• Mews

• StayNTouch

Event & Catering Management

If you manage private events or catering separately from your POS, the following platforms are supported:

• TripleSeat

• HoneyBook

A Note on Payroll

Gusto is our standard payroll platform, and it's what our workflow is built around. We can work with Toast Payroll and ADP under documented exceptions — typically for clients who came to us already running these systems — but they require additional handling and aren't our default.

What We Can't Work With

Two things are prohibited under our engagement terms, with no exceptions:

• PayPal and Venmo for business transactions, including business activity run through a personal account

• Banks without a QuickBooks Online feed

These aren't preferences — they're conditions of the reconciliation services we provide.

Questions?

If you're unsure whether a platform you're using or considering is on our approved list, just ask before you commit to anything. The right time to have that conversation is before your proposal is signed, not after your first month closes.

Reach us at hello@prixfixe.accountants.

Benefits of Restaurant Accounting

Benefits of Restaurant Accounting

Running a restaurant is an exciting and rewarding venture, but it also comes with a unique set of financial challenges. From managing fluctuating stock levels to tracking labour costs, monitoring margins, and staying compliant with tax requirements, the hospitality sector demands precise and informed financial oversight. This is where restaurant-specific accounting becomes invaluable. Effective financial management not only keeps your business compliant but also helps you grow, streamline operations, and maximise profits. Here are some of the biggest benefits of implementing strong restaurant accounting practices.

Better Control Over Food and Beverage Costs

Food and beverage costs fluctuate constantly due to seasonality, supplier changes, wastage, and customer behaviour. Without proper accounting processes, these shifts can significantly impact your profit margins. One of the biggest advantages of dedicated restaurant accounting is gaining clarity over your cost of goods sold (COGS), portion control, and menu profitability.

With accurate tracking, you can easily identify where losses are occurring—whether through waste, over-portioning, theft, or supplier price increases. This insight allows you to adjust menu prices, negotiate better supplier contracts, or refine your purchasing strategies. In a business where margins can be tight, these improvements make a meaningful difference.

Accurate Labour Cost Management

Labour is one of the largest expenses in any restaurant, but it’s also one of the most difficult to control. Staff availability, overtime, split shifts, and seasonal variations all contribute to unpredictable payroll costs. Strong restaurant accounting systems help you understand your labour percentage, monitor scheduling efficiency, and analyse how staffing levels correlate with revenue patterns.

By combining accounting data with operational insight, you can optimise shift patterns, reduce unnecessary overtime, and maintain the ideal balance between service quality and cost efficiency. This ensures your team remains productive without straining your budget.

Informed Decision-Making and Strategic Planning

The numbers behind your restaurant tell a story about how well your business is performing. With clear financial reporting, owners and managers can make smarter decisions about everything from menu design and marketing campaigns to expansion plans and equipment purchases.

Comprehensive reporting highlights trends, warning signs, and opportunities for growth. Whether you're assessing the performance of a particular menu item, evaluating the success of a new promotion, or planning the opening of a second location, accurate financial data helps you move forward with confidence.

This is one of the reasons many restaurant owners rely on restaurant accounting services—professionals who understand the specific financial pressures of the hospitality industry and provide tailored reporting designed for restaurant operations.

Improved Cash Flow and Financial Stability

Cash flow is the lifeblood of any restaurant. Even a busy, well-reviewed establishment can experience financial strain if cash isn't managed properly. Expenses like rent, utilities, payroll, and supplier invoices all require careful planning. With proper accounting, you can forecast cash flow needs, anticipate upcoming expenses, and ensure you always have enough liquidity to cover your obligations.

Cash flow forecasting also helps prevent common issues such as late payments, unnecessary overdraft fees, or running out of stock during peak times. When you understand how money moves in and out of your business, you can operate more confidently and strategically.

Compliance and Reduced Risk

Restaurants must stay compliant with tax laws, payroll regulations, and financial reporting standards. Mistakes in these areas can lead to fines, penalties, or operational disruptions. Strong accounting practices ensure all financial records are accurate, deadlines are met, and compliance requirements are fully followed.

Detailed record-keeping also protects your business during audits and provides transparency to stakeholders, investors, partners, and lenders. By reducing financial guesswork, you significantly reduce operational risk.

Final Thoughts

Restaurant accounting is far more than number-crunching—it’s a foundational tool for building a profitable, efficient, and sustainable hospitality business. With better cost control, improved cash flow, strategic decision-making, and complete compliance, strong financial management empowers owners to grow with confidence. Whether you run a café, bar, food truck, or full-service restaurant, investing in proper accounting practices is one of the smartest decisions you can make for long-term success.

Restaurant Payroll Mistakes & How to Avoid Them

Restaurant Payroll Mistakes & How to Avoid Them

Payroll is one of the most complex and time-consuming aspects of running a restaurant. Between managing hourly employees, tracking tips, staying compliant with tax regulations, and navigating frequent staff turnover, payroll can quickly become a source of costly errors. For many restaurant owners, even small mistakes in payroll processing can lead to fines, unhappy employees, and administrative headaches.

At Prix Fixe Accounting, we’ve seen firsthand how payroll missteps can affect cash flow and team morale. The good news? With the right systems and guidance in place, these issues are entirely preventable. Let’s look at the most common restaurant payroll mistakes and how to avoid them.

1. Misclassifying Employees

One of the most frequent errors in restaurant payroll is misclassifying staff members. Restaurants often employ a mix of full-time, part-time, and contract workers — sometimes even family members. Misclassification affects everything from tax withholding to workers’ compensation coverage.

To stay compliant, ensure that each worker’s classification aligns with federal and local regulations. If someone is under your control, uses your equipment, and works set hours, they’re most likely an employee — not a contractor.

2. Failing to Track Tips Accurately

Tips are the lifeblood of the restaurant industry, but they can also cause major payroll confusion. Employees must report all tips to their employer, who then withholds the proper taxes. Failing to track tips correctly can lead to state and federal penalties (some states have 3x penalties) and employee frustration.

Implement a reliable system — whether digital or manual — for recording tips daily. Regular reconciliation ensures reported tips align with actual sales. This not only protects your business legally but also helps maintain trust between management and staff.

3. Mismanaging Overtime Pay

Restaurants often have unpredictable schedules and peak-hour demands, which makes it easy to overlook overtime pay. However, failing to calculate overtime correctly is a common compliance error that can trigger fines or back pay claims.

Ensure your payroll system accurately tracks hours worked across all positions. Even if an employee works in multiple roles or locations within your business, their hours must be combined for overtime purposes. Many states have very complex overtime laws, such as New York’s “Spread of Hours pay.” Consistency and transparency in scheduling go a long way toward avoiding disputes.

4. Ignoring Local Tax & Labor Laws

Restaurant payroll isn’t just about cutting checks — it’s about compliance. From minimum wage laws to local tax regulations, restaurant owners need to stay up-to-date on frequent changes. Each state (and sometimes even city) may have its own rules regarding tipped wages, paid leave, or holiday pay.

Partnering with experts who provide restaurant payroll services helps ensure that your business remains compliant. Professionals in this space are familiar with regional legislation and can make sure your payroll system automatically adjusts to new requirements.

5. Overlooking Employee Benefits and Deductions

Health insurance, uniforms, meals, and retirement contributions — each requires careful handling in payroll. Incorrect deductions can upset employees and cause discrepancies in year-end reporting. Always document benefit eligibility, maintain clear communication, and use payroll software that calculates deductions automatically.

6. Manual Payroll Processing

Many restaurant owners still rely on spreadsheets or outdated systems to manage payroll. While this might seem cost-effective, manual entry invites errors. Missed digits, misplaced decimal points, or skipped entries can lead to significant payroll discrepancies.

Automation is key. Cloud-based payroll platforms can streamline payroll, ensuring calculations are precise, taxes are filed on time, and records are securely stored for audits.

7. Not Keeping Proper Payroll Records

Payroll record-keeping might not sound glamorous, but it’s crucial. Employers are required to keep payroll records for several years — including timecards, pay rates, and tax documentation. Poor documentation can make audits and employee disputes much harder to resolve.

Establish a system that keeps digital copies of all payroll documents. Regular reviews will help you spot inconsistencies before they become larger issues.

How Prix Fixe Accounting Can Help

At Prix Fixe Accounting, we specialize in providing restaurant accounting services that address the unique challenges of the hospitality industry. From cash flow management to payroll compliance, our goal is to help restaurants thrive through accurate financial oversight and expert advice.

As a trusted restaurant consulting firm, we help business owners build systems that save time, improve compliance, and keep staff paid correctly — every time. Our team understands that restaurants operate on tight margins, so we tailor our solutions to be both efficient and cost-effective.

Final Thoughts

Running a successful restaurant means more than great food and friendly service — it means managing your finances with precision. Payroll mistakes are preventable when you have the right tools, systems, and professional support in place.

By staying compliant, automating where possible, and working with experts who understand the complexities of the restaurant industry, you can focus on what truly matters: delivering exceptional dining experiences.

If you’re ready to simplify your payroll process and ensure your team gets paid accurately and on time, get in touch with Prix Fixe Accounting today. We’re here to help your restaurant stay efficient, compliant, and financially strong.

How to Use Technology & POS Data to Improve Restaurant Profit Margins

How to Use Technology & POS Data to Improve Restaurant Profit Margins

In the dining industry, technology isn’t just a convenience — it’s a core driver of profitability. A well-chosen restaurant POS system, paired with clear data insights and smart integrations, gives owners and operators a complete picture of performance. With the right systems in place, you can identify hidden inefficiencies, reduce waste, and uncover opportunities that directly improve profit margins. At Prix Fixe Accounting, we’ve seen firsthand how aligning technology with financial processes transforms restaurant operations.

Why technology matters for margins

Margins in restaurants are notoriously tight, often squeezed by food costs, labor, and overhead. By leveraging technology, you gain real-time visibility across these areas, automate time-consuming tasks, and make decisions rooted in hard data rather than guesswork. A POS doesn’t just ring up sales — it tracks inventory, prep times, and customer preferences. With proper analysis, this data highlights waste, uncovers underperforming menu items, and guides changes that raise profitability without compromising quality.

What POS data reveals

A modern POS system collects powerful data, such as:

• Menu item performance (popularity vs. profit)

• Time-based demand (peak hours, seasonal trends)

• Food costs at the item level

• Sales per labor hour and staff productivity

• Shrinkage and waste by ingredient

• Inventory turnover rates

Understanding these figures helps you make strategic adjustments. For example, reducing portions on high-waste dishes, eliminating slow-moving items, or adjusting pricing based on margins.

Menu engineering with data-driven insights

Menu engineering is one of the most effective applications of POS insights. By reviewing monthly reports, you can:

• Promote high-margin performers

• Adjust or rework low-margin but popular items

• Create bundles that raise average check size

• Simplify SKUs to cut down on complexity and waste

Even small recipe tweaks or controlled price adjustments can deliver measurable results. Tracking these changes over 2–4 weeks ensures decisions are guided by actual performance data, not guesswork.

Inventory management and shrink prevention through tech

Food waste and poor stock control are common profit killers. Technology helps you:

• Track inventory in real time

• Automate reordering based on par levels

• Monitor shelf life and FIFO practices

• Analyze waste patterns by dish or station

For clients using our restaurant bookkeeping services, we often integrate POS data with inventory costs, giving a full picture of how waste affects the bottom line. Armed with this insight, you can renegotiate with suppliers, tighten prep procedures, or rework recipes to minimize losses.

Labor optimization with smart scheduling and analytics

Labor is one of the largest controllable expenses. Smart scheduling tools integrated with POS data allow you to align staffing levels with forecasted demand. Monitoring productivity metrics like sales per labor hour helps you identify overstaffing, idle time, or training gaps. Cross-training employees based on data trends also adds flexibility and keeps payroll costs in line without sacrificing service quality.

Customer experience data as a margin lever

Profitability isn’t just about cutting costs — it’s about creating value that keeps guests coming back. POS data helps identify upsell opportunities, design targeted promotions, and monitor speed of service. When customers feel understood and valued, they’re more likely to spend more and return frequently, turning efficiency into loyalty-driven growth.

Building your tech and accounting stack

The best results come when your POS integrates seamlessly with inventory, labor, and financial reporting. Linking these systems through professional restaurant management consulting ensures that insights don’t sit in silos. At Prix Fixe Accounting, we help clients establish the right reporting cadence (weekly, monthly, quarterly) and connect POS analytics directly to financial statements, making it easier to track progress against margin goals.

Final thoughts: Turning data into margin improvements

Technology is only as powerful as the actions you take with it. By pairing your POS system with disciplined processes and ongoing financial oversight, you can uncover real opportunities to improve profit margins. Whether it’s through menu adjustments, inventory control, or labor optimization, the key is consistency.

As a trusted partner offering bookkeeping services for restaurants, Prix Fixe Accounting helps owners translate raw data into clear financial strategies. With the right systems, support, and mindset, restaurants can strengthen profitability while continuing to deliver the quality and service their guests love.

Why Is Cost Control Important in a Restaurant?

Controlling costs means optimizing profit. In the restaurant industry, finding the balance between providing superior quality food and keeping costs in line can be challenging. The price of food can fluctuate significantly from month to month. Customer demand, changes in economic pressures, and seasonal factors all can make it difficult to control costs. But why is cost control necessary in a restaurant beyond profitability?

Cost control impacts profits, but it can also play a role in enhancing efficiency, stability, and adaptability. When you work with a restaurant management consulting team, you’ll learn the specific strategies available to help you optimize costs clearly. Here is why cost control matters.

Cost Control Directly Impacts Profits

Higher costs impact your business’s bottom line. The more you can control and maintain your expenses, the higher your profit margins increase. Your business cannot survive long-term without a healthy profit margin.

Cost Control Supports Long-Term Financial Stability

Meeting monthly financial obligations is always important. However, cost control also impacts your restaurant’s ability to:

• Make payments to vendors on time

• Keep employees paid 

• Meet supplier requirements

• Pay the rent on the building (and pay yourself!)

• Maintain positive cash flow to support emergency needs or unexpected costs

Each of these relationships and areas of need is critical to build over time. Without positive cash flow, you may end up borrowing. That means expensive interest rates could further impact profitability.

Effective Cost Control Ensures Efficiency

Sometimes, the best reason to invest time in cost control is to ensure you’re not wasting money. Even if cash flow is fantastic and profit margins are in line, operational efficiency remains a critical factor in building your business. Why spend more than needed? Consider:

• Improved product management reduces waste, which in turn protects the environment and results in fewer calls to pick up trash. 

• Ensuring proper cost control keeps inventory optimized. That streamlines operations, making sure you don’t run out of what you need or spend money to throw product out that spoils.

• Portion control keeps costs in line, but also keeps customers happy. If a customer comes in one day and receives twice the portion they expect, they should expect that every time. That can impact customer satisfaction even if the expected portion size is ample. 

Operational efficiency is also a factor in your restaurant’s reputation. Consumers increasingly want to work with companies that are cognizant of their role in minimizing waste and being effective in managing energy costs.

Cost Control Helps You Make Better Decisions

Information is one of the most powerful factors in building your business. Cost control insight enables you to make informed decisions about some of the most critical aspects of your business. 

With cost control data, you know how well your business is performing each month and year-over-year. This allows you to make decisions such as:

• Should you hire? Is your business actually growing faster than you realize? It could be if you optimize profits. 

• Which menu items are profit makers and which are costing you too much?

• How well do your prices represent the actual income and profit margin you need to make? If your costs creep up and you raise prices, the direct outcome is driving customers away. 

• Are you working with the most cost-effective suppliers and vendors? 

• Should you make decisions about upgrading equipment to reduce costs or provide a better level of service for the customer?

Throughout each day, you will make big and small decisions that impact profitability. That could be on what dishes you plan for next season or whether you hire another cook.

Cost Control Helps You Adapt

Think long-term. Market conditions change. Your customer base is also likely to change over the years. You may have seen new trends pop up that you want to take advantage of to bring customers in. If you have a good level of cost control in place, you can make those decisions with confidence.

Being able to adapt to changing conditions in the restaurant industry is a part of doing business. Consumer behaviors, demands, and preferences will change, even slightly. You need to know how those changes are impacting your bottom line before they hurt it.

How Restaurant Consulting Makes a Difference

Prix Fixe Accounting provides you with the tools to manage your costs efficiently. With our services, we ensure you can consistently grow your business. Contact us to learn how you can enhance cost control.

How Can a Competitor Analysis Help Me Improve My Restaurant Business?

Gathering information about your competitor is one of the best ways to gauge your company's performance. The two may not seem to relate, but with the information you gather through a comprehensive analysis, you can make better, more insightful decisions for your restaurant. The better you understand your competitors, the more powerful your marketing and outreach efforts can be.

What Is a Competitor Analysis?

Utilization of a competitor analysis opens the door for you to see:

• Who your competition really is (meaning, who your customers would go to if they did not go to you) 

• What your competition offers that you do not

• How well does your pricing stack up with their costs

• Key differentiators that make consumers seek out you (or them) more frequently 

To complete a comprehensive competitor analysis, you will need to examine a great deal of information and carefully consider it objectively. This may include menu items, marketing methods, customer base, and target customers, as well as pricing and branding. 

Because of its importance, working with restaurant consulting services that will handle a competitor analysis for you could be critical. That expertise ensures you are always able to gather accurate, actionable information.

How a Competitor Analysis Improves Your Business

Perhaps you know you are not going to change your business based on what is happening with your competitors. You may list numerous reasons why you are different. However, for the customer who is searching for a place to get a meal, none of those factors matter. If you cannot compete, then they will choose someone else.

Consider some of the direct results that a restaurant competitive analysis can offer to your business.

• Better tailor your marketing to key differentiators. When you complete a competitor analysis, you gain insight into what the competition does well and what you do better than them. This can help you enhance your messaging and branding.

• Stop wasting money on factors that are less beneficial. In some situations, you may learn that the competition is beating you in some areas. This allows you to make adjustments that could be more effective at boosting revenue. That could be, for example, changing up your marketing reach. 

• Find gaps in your competitor’s strategies that could benefit you. You may know that once their customers start coming to you, you can win them over. Look for areas of opportunity, whether that’s in your marketing messages or in offering a specific service that beats out the competition.

If your business is doing well, a competitor analysis keeps you on top by demonstrating where the competition sits in terms of providing a better product or service. If your business is struggling, a competitor analysis enables you to gain insight into areas of opportunity that may be beyond what you can see right now.

Conducting a Competitor Analysis: Best Practices to Put in Place Now

Utilizing a professional service to handle restaurant consulting services, such as competitor analysis, is often beneficial. It ensures that an objective party always handles the necessary steps while not involving emotions or personal experience. To be beneficial to you, a competitor analysis must be accurate. 

Consider these steps to help you ensure that it happens:

• Look at everything, not just the menu. You can start with the menu and pricing, but there is much more to consider. Look at how their customers interact, feel, and present themselves. Consider the atmosphere within the space. Look at how the employees behave. 

• Consider the differences carefully. Notice what your competitors are doing well. Make it a point to focus on these areas during your analysis. Then, look at what is different. Is their technology more advanced? Are they using different styles of dishes or engaging customers in a different way?

• Take a look at their online presence. Often, consumers today turn to social media to find the best place to eat near them. Consider how well your competitors are followed online, whether they have an updated website, and what services they offer. Catering, party rooms, special discounts listed online, and other services are all differentiating factors you need to think about for your own company.

Let Our Professionals Get to Work for You

Utilizing a competitor analysis, you gain valuable insight that can drive business decisions. Keep control over your business’s bottom line and drive success by working with the team at Prix Fixe Accounting. Let our consulting services answer your questions. Contact us now.

How Do You Plan a Restaurant Menu?

Designing your restaurant menu is more than providing customers with a list of food options. A carefully designed menu acts as a marketing tool: a way that you can increase sales and convey the right message about your brand. 

If you are launching a new restaurant or investing in upgrades for your existing restaurant, then it’s time to consider the design and layout of your menu. These tips will help to boost profitability and improve customer experience, helping to optimize the results that you can achieve with your restaurant. 

Follow these best practices when you are planning and designing a restaurant menu:

Know Your Target Audience and Restaurant Concept

You need to have a clear profile of your target demographic. Create a persona of the ideal customer that you want to see walking through the door. Are you serving casual diners, health-conscious customers, or fine-dining guests? How do your restaurant’s theme and offerings align with the customer’s needs and preferences?

When you are clear about the customers that you are serving, it becomes easier to dial in your restaurant theme, menu, and overall brand identity. Even the smallest details, such as dish offerings and menu designs, contribute to the experience your customers will have in your restaurant. These customer preferences, as well as local food trends, can help as you are shaping your menu options.

Offer Variety, But Keep It Simple

One of the most important principles of User Experience is that simplicity is always best. While it might seem fun and exciting to offer a lot of options for your customers, it can be overwhelming when a person is looking at a huge menu. Too many offerings on the menu not only make it hard for your customers to choose their meals, but it also complicates your kitchen operations. 

So, the goal is to provide a variety of options while also keeping the menu as simple as possible.

Profitability and Menu Categorizations

Additionally, there are ways to place the menu items strategically so that you can optimize revenue. Know which menu items are the most profitable and highly popular, then look for ways to highlight these items on the menu. 

Consider this menu engineering and design method to help with profitability:

• Stars: These are the menu items that you want to feature most prominently. They are the most popular dishes that have the highest profit margins.

• Plow Horses: You’ll have other offerings that are very popular but have lower profit margins. In this category, it might make sense to adjust the costs and price points if needed.

• Puzzles: Next, identify any menu items with high profit margins and low popularity. These items can be highlighted on the menu, and you might consider rebranding them to make the dishes more appealing.

• Dogs: The last category includes any dishes that have low profit margins and are low in popularity. These items are wasting space on your menu. You need to remove the dogs, or reinvent them so they are more effective with both profitability and popularity.

Pricing Strategies to Boost Your Profit Margins

You are in the restaurant industry to make a profit, but it can be challenging to ensure that the numbers are lining up to result in a positive ROI at the end of each month. Follow these tips to help with pricing and menu design so that you can optimize your profits as much as possible:

• Food Cost: When you are choosing the price point for each menu item, you need to account for more than just the ingredient costs. Also, think about labor requirements and overhead. In most situations, food costs should be around 28 – 35% of the menu price.

• Portion Control: Next, make sure that you are standardizing portion sizes. Not only does this help to maintain consistency in the dishes that your customers are receiving, but it’s also easier to manage your profit margins this way.

• Pricing Psychology: Small nuances in the way the prices are set can impact a person’s decision to purchase. For example, customer perception is often influenced by prices that end in .95 or .99. “Charm pricing” is a method of dropping the price just below a rounded number to make it seem more affordable. For example, pricing a dish at $19 instead of $20.

Other Details for a Successful Menu

There are a variety of other strategies that can improve the effectiveness of your restaurant menu. Not only do you need written descriptions that sell, but you also need to add appealing photos and make sure there is a logical menu flow. Your menu should highlight certain dishes and limit visual distractions as much as possible. 

For more information about menu planning and full-service restaurant consulting services, our team at Prix Fixe Accounting is here to help. Contact us to learn more about available services.

Restaurant Positioning: How to Stand Out in a Crowded Market

What makes one restaurant stand out from another? For many, it is that one unique characteristic or incredible experience that brings them back to the same location time and time again. Restaurant positioning is the process of creating that memorable feeling. Specifically, it's a strategy that can help your restaurant better compete by standing out.

What Is a Positioning Statement for a Restaurant?

How you position your restaurant leads your marketing efforts, builds your reputation, and solidifies your customers' experiences. A positioning statement can help clarify this for your location. With the help of restaurant consulting services, you can create an authentic, on-target positioning statement that clearly defines your business objectives.

A positioning statement is a short and to-the-point declaration that outlines how the business wants to be perceived. It applies specific target market aspects to it, allowing your business to position itself as the ideal choice for those within that target market. All industries benefit from having a well-defined positioning statement, but for restaurants and a smaller marketing budget, it's a core component of your strategy. 

How to Create Restaurant Positioning Statements

You may know what you want people to think about your restaurant, but how can you communicate that message? There are four key components to focus on to build your own positioning statement:

• Clarify and detail your story. Focus on the why and how. 

• Communicate your philosophy. What makes you different could be your beliefs in the work you do or how you work.

• Consider your target customer. What do they desire and even expect from the locations they visit?

• Consider your competitors and how to stand out from them

Restaurant positioning enables you to make a statement, but you'll need to create something that's authentic. Consumers know what marketing is, and they want to patronize organizations they can get behind and feel good about visiting on a regular basis.

• Does your company want to be known for providing community-supported initiatives? 

• Do you source all of your food locally? 

• Do you want your customers to see you as a high-end, sophisticated location?

• Are you showcasing the unique skills of a chef?

• Are you focused on supporting the LGBTQ community in your area?

Components of Successful Restaurant Positioning

Once you have a positioning statement, consider what you can do to communicate that with others. With the brand positioning in mind, focus on how it impacts these key areas:

• Brand identity: A consulting service can help you build your brand, which is a core component of your restaurant positioning. A brand is more than a logo. It is a feeling, experience, and statement.

• Customer service: Modify your customer service programs and solutions to ensure you are delivering on that promise and statement.

• Menu design: Even your menus should communicate your messaging and exclude the positioning you want your company to have

• Staff: There is no more outward component to your brand positioning than your staff, who are the face of your company

• Your concept: Choose a concept that builds out your positioning but also one that defines your piece from others

As you consider all of these areas, bring them all together with one single cohesive statement. Through market research and careful consideration of what you value most in this business, it's possible to create an authentic and robust restaurant position that enables others to clearly recognize your business and build a relationship with your service.

Let Our Team Help You

At Prix Fixe Accounting, our business consulting services are a core component in your restaurant positioning. Let us help you become a proven, modern organization that fills your role in the community. 

Navigating Non-Traditional Hires in Firms

There’s no doubt that the makeup of CPA and accounting firms is changing. Just as technology continuously changes to affect the speed and scope of our service delivery, the “people” component also is in flux and a major factor in the way firms work with their clients, especially for firms that understand client advisory services.

But there’s an elephant in the room. Should firms hire “non-traditional” or non-accounting people in their firms?

The AICPA’s 2021 Trends report states that “Accounting graduates trended downward in the 2019–2020 academic year, with decreases of 2.8% and 8.4% at the bachelor’s and master’s levels, respectively.” Coupled with a steady decrease in new students majoring in accounting—and that 75% of CPAs will have reached retirement eligibility by 2020—firms are facing a significant talent shortage.

Many suggest that the path forward is to try to make the profession “sexy” for Gen Z (born between 1997-2012). However, one of Gen Z’s primary interests in the workplace is having a positive impact on the world. Accounting also suffers from a PR issue, with the most common descriptions being “dull,” “boring,” “unexciting,” and virtually every other synonym for uninteresting. While we can argue that accounting isn't quite as boring as it's often portrayed, the profession is hardly going to save the world. This sort of image issue will likely take decades to change. 

Other alternatives are to make the CPA exam easier, remove the 150-hour rule, or partition the certification into specializations. Commentary from the AICPA and its membership seems to disagree with this path forward because it dilutes the brand, so that outcome is equally unlikely.

So what is the solution? 

At Prix Fixe, because we specialize in the restaurant space,one of the requirements to work for our firm is experience in the hospitality industry. We fundamentally believe that it gives our team the understanding and empathy required to work with some of the most overworked and underpaid entrepreneurs in our economy. However, we quickly discovered that our requirement also attracted a lot of non-accountants seeking a career shift out of the restaurant industry, leading us to ask: How much should firms hire “non-traditional” or non-accounting candidates in their firms?

Yes of course, you should, especially if you niche like we do. Here are some tips and guidance on how to handle the hires and navigate the process.

What to look for In a potential employee?

When looking at a resume, the strengths aren’t going to be as clear as they would be if you were looking at an accountant’s resume. For example, instead of looking for skills and experience, what you’re primarily looking for is experience that lends well to the tasks an accountant will perform.

Accountants are heavily process-driven, but also need to understand how to perform a wide range of tasks with precision and accuracy. In our hospitality world, we see a number of positions that excel at these skills, especially in higher end restaurants. These include bartenders, sommeliers,  and chefs. All of these positions require an encyclopedic memory, and are continually improving and iterating on their repeated processes. 

Looking at your own business, if you are focusing on specific industries, what positions within these industries share these skill sets? Engineers? Nurses? Paralegals?

Onboarding your new employee

It's worth noting that before making the hiring decision, a clear conversation needs to be had with the candidate about your expectations. A substantial portion of the conversation should be around training. For Prix Fixe, we require non-accountants to take financial and managerial accounting courses from accredited institutions. If a candidate is looking to make a career change, this will be a huge benefit to both of you.

Once you have made the hire, the monumental task of onboarding begins. Someone with no accounting background will need substantial training commitments. Planning your training around any paid training such as college courses or online courses should coincide with the tasks you are training your new employee on. It's important to also note that you should be very thorough in your review of their work, providing  continuous feedback with a theoretical explanation of why something needs to be done a certain way.

What’s the timeline and investment?

The investment of hiring and training a non-accountant is daunting; it’s the single largest drawback to this hiring practice and certainly shouldn't be a first hire. You should also be prepared to shell out a considerable amount of professional training. It's just unreasonable to assume you'll have the capacity to be a professor of accounting while trying to run a business. You can set up an education reimbursement policy, laying out the requirements for success so that any employee who falls short will need to pay for a larger portion of the educational cost.

The timeline is also considerable. Many firm owners suggest that it takes up to six months to truly get an accountant up to speed. For a non-accountant, that number is closer to 18 months in our experience.

Are non-traditional hires worth the effort?

There is something to be said about investing in someone’s future. Telling a hire that you are willing to make a significant investment of your time and money in them is an incredibly empowering statement. It buys loyalty and compassion and actualizes an employee right from the start. In the end, some of our best hires have been non-accountants, and while the risk, investment, and time commitment is high, we wouldn't trade those hires for the world.

Disclosure: This is a paid partnership with Intuit