Why Integrated Accounting Creates a far Superior Restaurant Back Office System – Think About It

Is your General Ledger not exactly where it should be? Feeling like you have no control over your bottom line? Entering duplicate transactions in your inventory and accounting systems? Trying to figure out your most profitable menu item?

These are the realities of managing a restaurant. It is why restaurateurs must have restaurant management software that has a deeply integrated restaurant accounting functionality specifically designed for restaurants. It is the only way restaurateurs can get an accurate picture of their business, manage prime costs and, in turn, manage profitability.

“When I joined Compeat in 2015, the integrated accounting, inventory and back office solution that Compeat customers loved so much was to me one of the many significant competitive differentiators for Compeat,” stated Jeffery Stone, CEO of Compeat. “There are many benefits to offering an integrated accounting and back office solution but at the highest level, it simply makes running a profitable restaurant much easier for the restaurateur.”

Here are just a few of the advantages of an integrated Accounting, Inventory and Back Office Solution:


All Operational and Financial Reporting is Always in Balance

Any restaurant manager with P&L accountability and any CFO will agree that the Profit & Loss reporting for revenue or cost of goods sold from a traditional back office system usually does not match the same reporting from the accounting system at the end of a period. This often results in added audit time, reduced confidence and general frustration.

The reason a stand-alone back office system and accounting system go out of balance, even with integration, is usually because:

1) The back office system is not forcing balanced or equal credit and debit entries to be posted to the accounting system.

2) Someone forgets to post information from the back office system to the accounting system.

3) Adjustments are made in the accounting system like invoice credits, inventory transfers, borrowed employees etc. after it has already been posted from the back office system.

A very deeply integrated restaurant management and accounting system will always be in balance and will always report the same numbers operationally and financially. By design, any adjustment made in either the back office system or accounting system only needs to be made once and will update all reporting. There is no requirement to post information from one system to another as they share a common database.

“We know where every penny is spent—or wasted—and it’s enabled us to know all about the inventory and financial aspects of our company,” Coopers Hawk.


Easier to Reduce and Manage Costs


“Our Compeat customers report an average combined food and beverage costs savings of 5% after implementing our software,” said Jeffrey Stone. “In the restaurant industry where margins are so tight, that is a significant impact on profitability.”

It’s always about the bottom line and an integrated restaurant management system allows you to manage your prime costs- labor and food – quicker and more efficiently than ever before. Management can see the exact numbers between theoretical and actual food and labor costs if their inventory, back office and labor systems are integrated with accounting.

An integrated accounting, inventory and back office software gives a restaurateur a complete General Ledger with Profit & Loss and Balance Sheet. You can see everything you need to see to manage profitability daily and catch overages in expenses before they get out of hand.

“Basically, we are just kicking ourselves for not doing this sooner. We have reduced costs by at least 5% so far with Compeat,” Daniel Island Grille Hospitality.


Improved Audit

When a separate back office system  and accounting system are utilized, only summary information, no transaction detail, is posted from the back office system to accounting system. Therefore, when an accounting person needs to audit an invoice, a P&L value, or a balance sheet value, they cannot access the supporting transaction detail without going back to the back office system and trying to isolate the appropriate detail. This process is very error prone and very time consuming.

A deeply integrated back office system and accounting system will ensure that all back office system transaction detail is available to someone using the accounting system.  For example, an accounting system user can drill-down from a cost of goods line item in the P&L to the individual invoice and line inventory item detail.  Or they can drill-down from a balance sheet item to the detailed daily sales transactions.

“We’ve moved our food cost focus to the variance gap between theoretical and actual costs instead of overall food costs. This would not have been possible without the tools and data Compeat provided us,” Modern Market.


Information is Only Entered Once

A traditional back office system is designed to post information to an accounting system, but never to receive transactional data from an accounting system.  This means that any adjustment made in the accounting system that impacts the back office system, such as invoice changes, ending inventory adjustments, etc., must be manually entered in the back office system.

A traditional back office system does not fully reconcile and post balanced daily sales reporting (DSR) to the general ledger. The posting also does not include adjusted sales tax liability, house accounts, paid-outs, estimated credit card fees, or tip info.  Traditional accounting system users are therefore forced to collect reports from their back office system and POS systems, perform additional calculations, and then manually enter this information in their accounting system.

Inter-company transactions, like inventory transfers from one restaurant to another restaurant, a free-meal given to an employee who works at a different restaurant, an employee of one restaurant who works at another, etc., require redundant entry in traditional back office system and accounting system.

An integrated restaurant management software like Compeat eliminates all the redundant data entry required above.  Adjustments made in the accounting system are automatically reflected in the back office system.  We post a fully balanced DSR along with all the other daily sales information mentioned above. It is all captured from POS and reconciled prior to posting. Compeat has fabulous inter-company transaction features that allow single entry and also create the corresponding balance sheet entries.


More Timely Reporting

When a separate back office system and accounting system are used, there is typically a gap at the end of the period for the accounting people to know how the restaurant did and then again for the restaurant manager to see final results from accounting. This is because the accounting system is waiting for information to be posted from the back office system and because the back office system user has no access to reports from the accounting system.

During an accounting period, an accounting system user doesn’t have access to the back office system and is therefore not fully aware of performance.

A deeply integrated back office system and accounting system will eliminate the need for any posting of information between systems. All records in both systems are not only always the same, but they are always available to all users. 82% of our customers reported improved timelines of reporting as a result of Compeat.

“When restaurateurs are choosing a restaurant management software, we always encourage them to ask the right questions of us and our competitors,” stated Jeffery Stone. “Here are just a few questions we suggest:

  • How many years of experience in the industry and accounting best practices does the software provider have?
  • Ask in demos to be shown how the integration works- do the inventory counts show up on the accounting side?
  • How much of the software solution is supported and designed in-house?
    How easy is it to make General Ledger changes?
  • Are the Accounting, Inventory, Intelligence, Logbook, Labor, and Schedule modules all integrated with each other and with your POS?

The true differentiators are in the details of what an integrated accounting, back office and workforce management software truly can do for the day to day management of a restaurant. Asking the right questions upfront, will ensure you choose the right restaurant management software. Our entire company is focused and dedicated on making the restaurateur more successful,” said Jeffrey Stone.