Published: 26th Nov 24
Categories: Money, Planning, Success, Taxes
Optimising Payroll and Supplier Payments for Restaurants: A Step-by-Step Guide
Managing a restaurant is a bit like being the conductor of an orchestra — everything needs to work in perfect harmony. However, one sour note can throw the entire operation off balance, and that sour note often comes in the form of payroll and supplier payments. It’s all well and good to have a packed house, but if you’re not handling your finances correctly, your business could end up with a soggy bottom. Let’s dive into how you can optimise payroll and supplier payments to keep your restaurant’s financials as smooth as a well-poured pint.
Why Payroll and Supplier Payments Matter
Let’s face it: the success of a restaurant hinges on two key things — happy staff and a steady supply of fresh ingredients. If your payroll is delayed or inaccurate, you’ll have unhappy employees who may not be too keen to come back for their next shift. On the other hand, if supplier payments are missed or mismanaged, your kitchen could find itself running out of essentials faster than a pub runs out of crisps on a Friday night.
Both payroll and supplier payments are critical to maintaining operational efficiency. And in an industry where margins are tight, optimising these processes can not only reduce stress but also boost profitability. So, how do we ensure everything runs like clockwork? Here’s a step-by-step guide.
Step 1: Use Cloud-Based Payroll and Scheduling Software
Managing payroll manually is a thing of the past — not only is it time-consuming, but it also opens the door to errors, especially with fluctuating shift patterns. Investing in cloud-based payroll software like Xero, BrightPay, or QuickBooks Payroll can streamline the process by automatically calculating wages, taxes, and deductions. Add scheduling tools like Deputy, Planday, or RotaReady, and you can further simplify staff management.
These platforms let you accurately track hours worked, overtime, and holiday pay, ensuring staff are paid on time and correctly. Many scheduling tools integrate with payroll software for a seamless workflow. Plus, you can access real-time updates and generate automated compliance reports from anywhere — even while on holiday!
Step 2: Set Clear Payment Schedules for Suppliers
Having a clear schedule for supplier payments is essential for maintaining good relationships. Suppliers are the lifeblood of your restaurant, so you want to ensure they’re paid on time to avoid any awkward phone calls about delayed deliveries. Start by reviewing your supplier agreements to ensure you fully understand the payment terms. Some suppliers offer discounts for early payments, which can help your cash flow. Others may have strict deadlines, and missing these could result in late fees or disruptions to your deliveries.
Use accounting software to set reminders for when payments are due. Xero, for example, allows you to create automated payment schedules for your suppliers, so you’re never caught off guard. By staying organised and paying on time, you’ll build strong relationships with your suppliers, who may be more willing to offer you better deals or prioritise your orders.
Step 3: Track Labour Costs Daily
Labour costs can quickly snowball if left unchecked. By tracking these costs daily, you can avoid overstaffing during quiet periods or understaffing during peak hours. Integrating scheduling software like Deputy, Planday, or RotaReady with your POS system takes this a step further, allowing you to monitor and compare sales against labour costs.
Analyse POS data to identify trends and adjust staffing levels accordingly. If Tuesdays are typically slow, consider cutting back on shifts that day. Conversely, for busy Saturday nights, schedule enough staff to handle the rush smoothly. This not only keeps labour costs in check but also ensures fair staffing levels and prevents employee burnout.
Step 4: Automate Supplier Payments
Just as payroll can be automated, so too can supplier payments. By setting up direct debits or using platforms like Xero to manage payments, you can automate your supplier invoices, ensuring they are paid on time, every time. This eliminates the risk of human error and ensures that you won’t be scrambling to pay a supplier at the last minute.
Automating payments also helps with cash flow management. If you know when payments are scheduled, you can better plan for upcoming expenses and avoid surprises. It also gives you the opportunity to prioritise payments based on their urgency, ensuring that critical supplies — like fresh produce — are always secured first.
Step 5: Regularly Review Payroll and Payment Processes
Even if you’ve got your payroll and supplier payments down to a fine art, it’s crucial to review your processes regularly. This ensures that you’re not paying for services or staff you no longer need and that your suppliers are still offering competitive rates. Regular reviews can help you identify areas where you can cut costs or renegotiate terms.
In terms of payroll, this might involve looking at overtime expenses or adjusting holiday policies. For supplier payments, it could mean consolidating orders to save on shipping or negotiating bulk discounts.
Conclusion: Keep It Running Like a Well-Oiled Machine
When it comes to running a restaurant, optimising payroll and supplier payments is not just about keeping things ticking over — it’s about ensuring that your business thrives. Automating payroll and payments, tracking labour costs, and regularly reviewing your processes will free up your time and help you focus on what really matters: providing excellent food and service to your customers.
By streamlining these financial processes, you’ll not only have a happier team and more reliable suppliers but also a more profitable business. After all, isn’t that what we’re all aiming for? Now, back to perfecting that menu!