Restaurant Accounting: Why your CPA should be a restaurant industry specialist
“Money, it’s a gas.” That’s what Pink Floyd thinks, at least. You know that money is great when it’s flowing in and being managed properly. However, money management can be one of the hardest things to do well when you’re busy running a restaurant.
That’s why most restaurant owners prefer to leave money management, taxes, bookkeeping, and all that other stuff to expert CPAs (certified public accountants). But, there’s still one big question to answer. Can any CPA do the job? Or do you need one that’s specialized in your industry?
We caught up with Nick Swedberg, CPA for Boyum Barenscheer CPAs and Business Advisors to get the answer.
The pros and cons of hiring a generalist CPA
Generalists are easy to find and can accommodate your schedule and budget. This also makes it easier to switch if you aren’t satisfied with your first choice.
A generalist CPA doesn’t know the challenges and solutions unique to your type of business. This means they can’t give you a consultative approach tailored to your industry. It also means that they can’t advise you on how to react to new laws affecting your industry.
The pros and cons of hiring a niche CPA
Restaurants are unique because they deal with special sales tax, payroll tax, and income tax that are written just for them. A niche CPA will understand the intricacies of these laws and be able to run a successful audit. That’s because niche CPAs frequently read through legislation to understand the effects to their clients, monitoring both accounting and business compliance. This alone is a huge reason to choose a niche CPA.
Another thing to think about is how restaurants operate. You look at your margins differently and your ideal cost to profit percentages will differ, too. A niche CPA understands this and can give you expert guidance instead of guesses.
Specialist CPAs can be difficult to find. After all, they work with a limited market. They’re also more expensive than a generalist since they’ve put in the extra work to specialize.
Fortunately, the value of these CPAs will vastly outweigh the effort and cost involved in hiring one. So, even though there are drawbacks, they shouldn’t scare you away from working with a specialized CPA.
What type of CPA should I choose?
“Specialize!” Nick says. “Just like restaurants don’t serve burgers, Italian, Chinese, sushi and burritos, your CPA shouldn’t serve all business types.”
There you have it. Generalists may be easy to find and affordable, but they aren’t a great choice for restaurants. So as you search for a CPA, remember to go with a specialist.