In a revealing interview on the “Late Night Restaurant Show,” David Monteith, founder of the innovative Canadian bookkeeping firm Accountific, delivered a masterclass in modern restaurant finance. The discussion, hosted by Jay Ashton, Dominic Pedulla, and Michael Beck, transcended the usual podcast banter, delving into the often-unseen financial realities that can make or break a restaurant in today’s challenging economic climate. The conversation underscored a growing trend in both the US and Canada: the rise of fractional bookkeeping as a strategic solution for restaurants of all sizes.
The timing of the interview couldn’t have been more relevant. With inflationary pressures, supply chain disruptions, and the looming specter of tariffs impacting businesses on both sides of the 49th parallel, the need for meticulous financial management has become paramount. David, through Accountific, offers a service that addresses this need head-on, providing restaurants with a level of financial expertise often unavailable without the significant expense of a full-time, in-house bookkeeper.
The Restaurant Reality: Overwhelmed and Underserved
David painted a picture familiar to many in the restaurant industry. Owners, frequently wearing multiple hats – from chef to manager to marketer – find themselves overwhelmed by the sheer volume of daily tasks. Bookkeeping, often perceived as a non-core function, is relegated to late nights or weekends, leading to a cascade of potential problems:
- Inaccurate Records: Hasty, infrequent bookkeeping often results in errors and omissions, making it difficult to get a true picture of the restaurant’s financial health.
- Missed Deadlines: Late filings for sales taxes (GST/HST/PST in Canada, state sales taxes in the US) and payroll taxes can result in penalties and interest, adding unnecessary financial strain.
- CRA/IRS Audits: Incomplete or inaccurate records significantly increase the risk of an audit by the Canada Revenue Agency (CRA) or the Internal Revenue Service (IRS), a prospect dreaded by any business owner.
- Lost Opportunities: Without a clear understanding of their financials, restaurant owners are unable to make informed decisions about pricing, cost control, and investment, hindering growth and profitability.
Fractional Bookkeeping: The Accountific Solution
Accountific’s fractional bookkeeping model provides a targeted solution to these challenges. Instead of hiring a full-time bookkeeper, which can be cost-prohibitive for many small and medium-sized restaurants, clients gain access to a team of experienced professionals on an as-needed basis. This “fractional” approach allows restaurants to scale their bookkeeping services up or down depending on their current needs and budget.
Monteith outlined the comprehensive suite of services that Accountific offers, covering all aspects of restaurant bookkeeping except the final preparation of corporate and personal income tax returns:
- Payroll Processing: Ensuring timely and accurate payment of employees, including handling deductions and remittances.
- Bank and Credit Card Reconciliation: Meticulously matching transactions to bank statements, identifying discrepancies, and providing a clear picture of cash flow.
- Merchant Account Reconciliation: Tracking sales and payments processed through various merchant accounts (e.g., credit card processors, online ordering platforms).
- Point-of-sale (POS) Integration: Seamlessly integrating sales data from the restaurant’s POS system into the accounting software, eliminating manual data entry and reducing errors.
- Sales Tax Compliance: Preparing and filing all required sales tax returns (GST/HST/PST in Canada, state sales taxes in the US), ensuring compliance with complex regulations.
- Expense Tracking and Categorization: Utilizing technology like Dext and Hubdoc to capture and digitize receipts, ensuring every deductible expense is accounted for.
- Financial Reporting: Providing regular, easy-to-understand financial reports that give owners a clear picture of their restaurant’s performance.
By handling these crucial yet time-consuming tasks, Accountific allows restaurant owners and managers to reclaim valuable time and focus on what they do best: creating exceptional dining experiences and growing their businesses.
Debunking the DIY Myth: The True Cost of “Saving Money”
One of the most insightful parts of the interview was Monteith’s challenge to the common misconception that doing your own bookkeeping saves money. He argued persuasively that a restaurant owner’s time is their most valuable asset. Every hour spent wrestling with spreadsheets or chasing down receipts is an hour not spent on revenue-generating activities, such as:
- Customer Engagement: Interacting with guests, building relationships, and fostering loyalty.
- Menu Development: Innovating and refining the menu to attract new customers and keep regulars coming back.
- Staff Training and Development: Investing in staff to improve service quality and efficiency.
- Marketing and Promotion: Developing and executing strategies to increase visibility and drive traffic.
- Supplier Negotiations: Securing the best possible prices on ingredients and supplies.
Monteith illustrated this point with a compelling analogy: a highly-paid engineer choosing to mow his own lawn instead of hiring a neighborhood kid. While seemingly saving money, the engineer was actually losing valuable time that could have been spent on far more lucrative consulting work. Similarly, a restaurant owner spending hours on bookkeeping is diverting their energy from tasks that have a much higher potential return on investment.
Navigating the Tax Minefield: Expertise Matters
The conversation also touched on the complexities of tax deductions in the restaurant industry. While not a tax firm, Accountific plays a crucial role in ensuring that clients have the documentation and records needed to maximize their legitimate deductions. Monteith highlighted several key areas:
- Business Expenses: The fundamental principle is that any expense incurred with a reasonable expectation of generating revenue is generally tax-deductible.
- Meals and Entertainment: This is a notoriously complex area, with different rules applying to different types of meals and entertainment. Business meals are typically 50% deductible, while certain client entertainment expenses (e.g., golfing, as mentioned in the interview) can be 100% deductible under specific circumstances. Navigating these rules requires careful record-keeping and expert guidance.
- Gifts to Employees: There are specific limits and regulations governing the deductibility of gifts to employees, depending on the value, nature, and distribution of the gifts.
- Travel Expenses: Business-related travel, such as attending industry trade shows (like the National Restaurant Association Show), can be deductible, but proper documentation is essential.
The Accountific Advantage: Technology and Expertise
Accountific leverages technology to streamline the bookkeeping process and provide clients with real-time financial insights. Their use of cloud-based accounting software (Xero and QuickBooks Online) and receipt-capture apps (Dext and Hubdoc) eliminates the need for paper-based records and allows for seamless collaboration between the client and the Accountific team.
Furthermore, Accountific’s team is comprised of experienced professionals with a deep understanding of the restaurant industry. This industry-specific expertise allows them to provide tailored solutions and proactive advice, helping clients navigate the unique financial challenges of the hospitality sector.
A Continental Reach: Serving Restaurants Across North America
Importantly, Accountific’s services are not geographically limited. As a virtual firm, they work with clients across Canada and, as their client base grows, are expanding their reach into the United States. This remote model allows them to serve restaurants regardless of their location, providing consistent, high-quality bookkeeping services across different provinces and states.
The Final Course: Strategic Financial Management for Restaurant Success
David Monteith’s appearance on the “Late Night Restaurant Show” offered a valuable perspective on the critical role of sound financial management in the restaurant industry. Accountific’s fractional bookkeeping model presents a compelling alternative to the traditional options of in-house bookkeeping or relying solely on an accountant for tax preparation. By providing expert, technology-driven bookkeeping services, Accountific empowers restaurant owners to focus on their passion, build thriving businesses, and ultimately, serve up success. The interview served as a powerful reminder that in the fast-paced and demanding world of restaurants, strategic financial management is not just a side dish – it’s a key ingredient.
——————–
David Monteith, founder of Accountific, is a seasoned digital entrepreneur and a Xero Silver Partner Advisor. Leveraging over three decades of business management and financial expertise, David specializes in providing tailored Xero solutions for food and beverage businesses. His deep understanding of this industry, combined with his proficiency in Xero, allows him to streamline accounting processes, deliver valuable financial insights, and drive greater success for his clients.