As we approach the end of the tax year, it’s more important than ever to for your financial records and reports to be in order. When it comes to your restaurant’s financials, accuracy and timeliness are paramount. To better understand the role of financial recordkeeping and reporting in the success of your business, let’s first distinguish between these two closely connected processes.

Financial Recordkeeping vs. Reporting

Financial recordkeeping is the process of tracking and recording all financial transactions that take place within a business, including sales, expenses, and payroll. Examples of financial records include journal entries, ledgers, receipts, and invoices.

Financial reporting, on the other hand, is the process of consolidating, analyzing, and communicating financial data to provide transparency, insights, and key metrics (e.g., cost of goods sold, food costs, labor costs, EBIDTA, gross profits, gross profit margin, menu item profitability, net profit margin, etc.). Some examples of financial reports include income statements, balance sheets, and cash flow statements.

Why are accurate financial records and reports so important?

Below are some of the functions that financial records and reports serve:

• Provide valuable information to help you make data-informed business decisions.
• Allow you to monitor your business’s performance and profitability.
• Produce key metrics for budgeting, financial forecasting, and cash flow management.
• Present a picture of your business’s financial health to stakeholders.
• Attract and maintain investors by offering transparency and proving profitability.
• Provide data for tax planning, helping you determine your eligibility for tax credits and minimize your tax liability.
• Highlight opportunities for operational improvement and cost saving.
• Help you detect issues early on, reducing the chance of costly errors, oversight, and theft.
• Ensure compliance with tax and other regulations.

Tips for Accurate Recordkeeping and Reporting

1. Reconcile your books regularly. Routinely reconciling your accounts—that is, comparing your internal financial records with your external bank and credit card statements—acts as a critical internal control. Frequent bank reconciliations help to verify the accuracy of your financial records and detect potential discrepancies early on.
2. Establish and maintain other internal controls, such as segregation of duties, inventory management, internal audits, approval processes, access controls, and variance analyses (comparing actual figures against budgeted or forecasted amounts).
3. Consider using a point-of-sale (POS) system for efficient data tracking and management. Integrating your POS system with your accounting software can help to improve the accuracy of your recordkeeping and reporting processes.
4. Make sure you have the right people on your team, including a CPA who can support your business’s success through industry-specific bookkeeping, financial reporting, tax planning, and more.

Let RBT CPAs Support You

 When it comes to choosing your team, consider partnering with RBT CPAs for remarkable service you can trust. RBT’s specialized restaurant accounting experts will help you keep your books in order throughout the year, ensuring the highest level of accuracy, timeliness, and compliance. Beyond managing your restaurant’s books, our team is also available to support all of your other accounting, tax, audit, and advisory needs. Give RBT CPAs a call today—and find out how we can be Remarkably Better Together.

Hospitality employers in New York State—as we approach the end of the year, keep in mind these important changes taking place in 2026.

New NYS Minimum Wage Rates

• Beginning on January 1, 2026, the general minimum wage in New York will increase by $0.50 to the following amounts:
  • For New York City, Long Island, and Westchester County: $17.00 per hour
  • For the rest of New York State: $16.00 per hour
• The minimum wage for tipped service employees in New York will increase to the following amounts in 2026:
• For New York City, Long Island, and Westchester County: $14.15 per hour (tip credit of $2.85 per hour)
• For the rest of New York State: $13.30 per hour (tip credit of $2.70 per hour)
• The minimum wage for tipped food service workers in New York will increase to the following amounts in 2026:
• For New York City, Long Island, and Westchester County: $11.35 per hour (tip credit of $5.65 per hour)
• For the rest of New York State: $10.70 per hour (tip credit of $5.30 per hour)

As of January 1, 2026, hospitality employers will be required to increase wages for hourly employees accordingly and to post the updated official NYS minimum wage poster in a visible location within the workplace.

New Tax Deduction and Reporting Requirements for Tips

The One Big Beautiful Bill Act (OBBBA), passed in July of this year, creates new rules regarding the taxation and reporting of tips. Here are some highlights of the new “No Tax on Tips” law.

• For tax years 2025 through 2028, the OBBBA creates a temporary income tax deduction of up to $25,000 per year for qualified tips received by individuals in occupations where tipping is regular and customary.
• The deduction begins to phase out when the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for joint filers).
• The deduction is limited to tips voluntarily paid by customers (not mandatory service charges), including tips shared through pooling arrangements.
• In September 2025, the IRS issued proposed regulations identifying qualified tipped occupations. A list of qualifying occupations can be found here.
• Under the new law, employers are required to separately report qualified tips for employees on Forms W-2 and 1099.

2025 Tip Reporting Guidance and Penalty Relief

The OBBBA requires separate reporting of tips and occupation codes. However, the IRS has announced penalty relief for the 2025 tax year—meaning employers will not be penalized for failing to separately report tip income for 2025. The IRS has also announced that Forms W-2 and 1099 for 2025 will not be updated to account for the changes under the OBBBA. Tax year 2025 will therefore be treated as a transition period, allowing businesses time to update their reporting systems before IRS enforcement begins. However, the IRS encourages employers to provide tipped employees with occupation codes and separate accountings of cash tips for the 2025 tax year, so that workers can claim the deduction for 2025.

Trust RBT CPAs as Your Accounting Partner

RBT CPAs’ hospitality accounting team is here to support you as you update your systems to comply with the new minimum wage rates and tip reporting requirements. Give us a call today with any additional questions and to find out how we can be Remarkably Better Together.

Thinking of selling your restaurant? The sale of any business comes with a myriad of tax implications, which is why it’s important to work closely with a tax professional who can help you navigate your options. Below are five key tax-related points you should consider when it comes time to sell your restaurant.

1. Asset Sales vs. Stock Sales

How the sale of your restaurant will be taxed depends largely on the structure of the sale. Business sales can be categorized into two main types: stock sales and asset sales.

Asset sale: In an asset sale, a buyer purchases specific assets from the seller rather than the entire business, with the seller retaining ownership of the business entity. Assets include both tangible assets—such as buildings, property, and equipment— and intangible assets, such as licenses, patents, and copyrights. The sale of some asset types results in ordinary income while the sale of others results in a capital gain; as a result, they are taxed differently.

Stock sale: A stock sale is the sale of the restaurant’s shares, which transfers ownership of the entire legal entity to the buyer. Stock sales are typically preferred by sellers for their more favorable tax treatment; proceeds from stock sales often qualify for capital gains tax rates, which are significantly lower than ordinary income tax rates.

2. Properly Valuing Assets and Reporting Goodwill

If selling your restaurant through an asset sale, “goodwill” refers to the amount paid by the buyer over the fair market value of the business’s net assets. To calculate goodwill, the buyer and seller must first agree on the valuation of each asset. Sellers typically prefer to allocate more to goodwill for more favorable tax treatment on their end (capital gains rate), while buyers prefer to allocate more to tangible assets that can be depreciated for immediate tax deductions. It’s essential to properly value all assets and avoid inflating goodwill to ensure accurate financial reporting, maintain stakeholder trust, and support informed decision-making.

3. Succession Planning

A succession plan identifies who will take over the business after you leave and enables a smooth transition of leadership upon the sale of your business. Succession planning is closely connected with tax planning, as a succession plan will determine how your restaurant’s assets will be transferred. Different methods of transferring ownership—such as selling the business to an external buyer, selling to an internal employee, selling to employees via an Employee Stock Ownership Plan (ESOP), gifting the business to a family member, or establishing a buy-sell agreement among multiple owners—all carry different tax implications.

4. Selling or Gifting to Family Members

If transferring ownership to a family member, you can choose to either sell the business or give it as a gift. Both methods come with their own tax implications. Selling the business will likely require you to pay capital gains tax, while gifting the business may trigger federal gift tax.

5. Installment Sales vs. Full Payment Upfront

When selling your restaurant, you can choose to receive the full payment upfront or structure the sale as an installment sale. A lump-sum payment provides immediate cash, but will result in a large tax liability for the entire gain for the year of the sale. An installment sale, which takes place over several years in multiple payments, allows you to spread the taxable gain out over a period of time and potentially lower your tax liability. However, not all assets qualify for installment sale tax treatment. Both sale options come with their own risks and benefits, so it is recommended that you meet with your accountant to discuss your options in greater detail.

Get in Touch With Us

For help navigating the tax implications of selling your restaurant, please don’t hesitate to reach out to our restaurant accounting professionals at RBT CPAs. Our team is here to support all of your accounting, tax, audit, and advisory needs—from the day you start your business until the day you sell it, and beyond. Give us a call to find out how we can be Remarkably Better Together.

With financing options for hospitality businesses becoming increasingly limited in recent years, private credit has emerged as a viable alternative to traditional borrowing options. This article will go over the fundamentals of private credit as well as the potential benefits this alternative lending option offers for restaurants and hotels.

What is private credit?

“Private credit” refers to debt financing provided by non-bank institutions, such as private debt funds, asset managers, and business development companies. The terms of these loans are directly and privately negotiated between the borrower and the lender. Private credit offers businesses an alternative to traditional bank loans for borrowing and has become a more popular option for hospitality businesses in recent years, as traditional bank loans have become more and more difficult to obtain.

Why is financing a challenge for the hospitality sector?

There was a time when traditional bank loans were the default option for restaurants or hotels seeking capital. However, due to increasingly strict lending conditions, bank loans have become far less attainable for many borrowers, especially within the hospitality sector. Since the Covid-19 pandemic in particular, banks and other traditional lenders have grown more hesitant to lend to hospitality businesses, whose sensitivity to global economic conditions and market volatility makes them potentially higher-risk borrowers. That’s where private credit lenders come in. Private lenders, recognizing a financing gap in the industry, have become an important source of funding for hotels and restaurants with limited access to traditional loans.

What are the benefits of private credit versus traditional loan options?

Private credit tends to offer greater flexibility, accessibility, and speed than bank loans and other traditional loan types. Not only are private credit loans more accessible to hospitality businesses due to their less stringent borrowing terms and requirements, but they also offer solutions tailored to borrowers’ needs. Because they are privately negotiated, private credit loans allow lenders greater freedom to customize repayment terms, collateral conditions, cash flow requirements, and other loan specifications, while bank loans and other traditional loan types are constrained by more stringent regulations. In addition, because of the less rigid approval process, private credit loans are often processed more quickly than traditional loans, granting borrowers access to critical capital sooner.

Is private credit the right choice for you?

Private credit offers many potential benefits for hospitality businesses. However, borrowers should be aware that private loans may come with higher interest rates and/or more complex covenants, put in place to protect the lender. To decide whether private credit is the best option for your business, it is recommended that you consult with a financial professional. RBT CPAs’ hospitality accounting experts can help you decide which financing options are best suited to your individual needs and circumstances. Our firm has proudly provided accounting, tax, audit, and advisory services to businesses and organizations throughout the Hudson Valley and beyond for over 55 years. Please don’t hesitate to reach out to us today to talk about business loan options and to find out how we can be Remarkably Better Together.

It’s no secret that technology is transforming the hospitality industry. From online ordering to virtual reality hotel tours, nearly every aspect of hospitality has been reshaped by recent advances in technology.

Let’s take a look at some of the latest developments in the digital revolution—and how restaurants and hotels can leverage these technologies to improve their operations and increase profitability.

Point-of-sale (POS) Systems:

POS systems act as command centers for all transactions and data within a business, enabling hospitality businesses to manage food orders, payments, invoicing, inventory, sales tracking, staff scheduling, and more—all from one central location. POS systems automate many of these processes, leading to increased accuracy, consistency, and efficiency across the board.

Online Ordering and Reservations:

Online ordering systems let customers place orders directly from a restaurant website or via third-party mobile apps. Similarly, online reservation systems allow customers to make reservations from their phones or computers, while at the same time enabling restaurants to better manage seating plans and wait times.

Digital and QR Code Menus:

Digital menus, electronic menu displays, and mobile QR code menus allow restaurants to update menus in real-time and display eye-catching visuals.

Contactless and Mobile Payments:

Contactless payment enables customers to tap their credit cards or smartphones on a payment terminal to pay without cash or a PIN, while mobile payments allow customers to pay directly from their phones.

Self-Order Kiosks:

Self-service kiosks and tableside ordering tablets enable customers to view menus and place orders using a touchscreen.

Self-Check-in/Check-out Kiosks:

Similar to self-order kiosks, self-check-in kiosks allow hotel guests to check in and out of their rooms without the need for a physical staff member. These self-service kiosks create a faster and more convenient check-in experience for guests while also reducing staffing costs.

Automated Email Marketing:

Specialized software enables hospitality businesses to automate emails to customers based on pre-established triggers, cutting down on administrative time and costs.

Personalized Marketing through AI:

Artificial intelligence has the ability to learn user preferences and tailor marketing strategies and experiences to meet those unique preferences.

AI Chatbots:

Customer service chatbots answer questions for guests in place of a human employee, ensuring consistent service and responsiveness, and saving hospitality employers on labor costs.

Virtual Tours:

Virtual reality tours offer guests an immersive look at buildings, grounds, and amenities prior to booking.

Sustainable Technology:

Sustainable tech, such as smart thermostats and lighting, renewable energy sources, and waste reduction systems, can help restaurants and hotels save on energy and operational costs.

Data Analytics:

Automated data analytics technology helps hospitality managers identify purchasing patterns, customize guest experiences, and optimize pricing.

Demand Forecasting:

AI-driven predictive analytics allow businesses to more accurately forecast future demand, guiding important operational decisions.

Social Media:

Hotels and restaurants are increasingly turning to social media marketing on platforms like TikTok and Instagram to engage with customers, especially among younger audiences.

Are You Taking Advantage of Available Technologies?

Hospitality businesses are seeing real benefits as a result of embracing AI, automation, and other technologies. Based on a 2024 survey conducted by TouchBistro and research firm Maru/Matchbox, nearly all of the 600 restaurant owners and managers participating in the survey reported benefits from automation, “with 42% reporting more productive staff, 41% reporting an increase in sales, and 40% reporting business growth.” EHL Insights lists several benefits for hospitality businesses adopting new technologies, including more personalized guest experiences, increased operational efficiency, cost optimization, and improved competitive advantage. While you consider the benefits new technology could bring to your business, let RBT CPAs take care of your accounting, audit, tax, and advisory needs. Reach out to RBT CPAs today to find out how we can be Remarkably Better Together.

On July 4, the president signed into law the One Big Beautiful Bill Act (OBBBA), implementing many significant tax and spending policy changes and extending many tax provisions previously set to expire. IRS guidance on the new legislation is still forthcoming—RBT CPAs will continue to provide updated information as this guidance is issued. But for now, here are some of the key provisions of the legislation impacting the restaurant industry.

No Tax on Tips

The OBBBA creates a temporary deduction of up to $25,000 per year for qualified tips received by individuals in occupations where tipping is regular and customary, available for tax years 2025 through 2028. The deduction begins to phase out when the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for joint filers).

The deduction is limited to tips voluntarily paid by customers (not mandatory service charges), including tips shared through pooling arrangements. W-2s and 1099s will need to reflect the qualifying tipped occupation for both employees and contractors. The Treasury Department is expected to issue a list of eligible occupations and provide further IRS guidance for tracking designated cash tips.

No Tax on Overtime

The OBBBA creates a temporary deduction of up to $12,500 ($25,000 for joint returns) for individuals who receive qualified overtime compensation (as defined by the Fair Labor Standards Act), available for tax years 2025 through 2028. The deduction applies only to overtime compensation and begins to phase out when the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for joint filers).

The deduction applies only to federally required overtime under FLSA (Section 7), not to enhanced state overtime rules or those negotiated under collective bargaining agreements. W-2s will need to separately report qualified overtime compensation. Employers are strongly encouraged to review exempt and non-exempt classifications now to prepare for future IRS scrutiny.

Bonus Depreciation

The OBBBA makes permanent 100% bonus depreciation for qualified property, including qualified leasehold improvements, placed in service as of January 19, 2025.

Increased Section 179 Deduction

Section 179 lets businesses deduct the cost of most tangible equipment (and certain building improvements) instead of depreciating it over time. The OBBBA increases the Section 179 expensing limit to $2.5 million. The limit is reduced by the amount by which the cost of qualifying property exceeds $4 million (new phasedown threshold).

QBI Deduction

The OBBBA permanently extends the Qualified Business Income (QBI) deduction. This deduction allows eligible taxpayers to deduct up to 20% of their qualified business income. The permanent extension includes additional modifications that expand the phase-in range of the wage and investment limitation and introduce a minimum deduction for businesses in which the taxpayer materially participates.

Limitation on Business Interest

The OBBBA reinstates the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) limitation under Sec. 163(j), effective for tax years beginning after December 31, 2024. Adjusted taxable income (ATI) will be computed without regard to the deduction for depreciation, amortization, or depletion.

Additional Guidance

The above provisions represent just some of the recent tax and policy changes that may impact you and your business. To learn about additional relevant provisions—and for insights and guidance on how these changes could affect you—please don’t hesitate to reach out to our restaurant accounting professionals at RBT CPAs. Our team is here to support all of your tax, audit, accounting, and advisory needs. Give us a call today to find out how we can be Remarkably Better Together.

In the restaurant business, the Chief Financial Officer (CFO) is responsible for managing the financial aspects of the restaurant, from financial reporting and projections to compliance and overseeing finance team members, with many functions in between. The CFO role is a critical one—however, the cost of hiring a full-time in-house CFO is significant, especially for small and medium-sized businesses. For many restaurants, outsourced CFO services provide a much more practical and flexible solution to financial management. Below are five benefits of outsourcing your restaurant’s Chief Financial Officer functions.

1. Cost Savings

One factor a restaurant owner must consider when deciding whether to outsource CFO functions to an accounting firm is the real cost of hiring a new full-time employee. In addition to an employee’s salary, the business also bears the costs of recruitment, training, office space, medical benefits, FICA taxes, and payments into a pension fund. New hires also require time to adjust to the role, learn the ropes, and reach full productivity. Outsourcing eliminates many of the costs associated with in-house hires. Additionally, outsourcing allows businesses to pay only for the services they need rather than paying an employee for full-time work.

2. Expertise and Accuracy

Besides cost savings, access to expertise is the most significant advantage of outsourced accounting. Accounting firms are equipped with seasoned professionals well-versed in financial management best practices and the latest regulatory changes. Outsourced accountants can provide you with advice on financial decision-making and ensure compliance with legal requirements, minimizing the risk of costly errors and penalties. They can also help you identify ways to operate more efficiently and cost-effectively. Services an outsourced accountant can provide include but aren’t limited to: strategic tax and financial planning, cash flow management, budgeting, forecasting, financial reporting, cost control, and guidance on maximizing profitability.

3. Continuity of Service

CFOs who leave their positions can be difficult to replace. While in-house CFOs or accountants can resign, fall ill, or go on vacation, leaving your restaurant with operational gaps, accounting firms have staff available consistently to ensure uninterrupted service.

4. Access to the Latest Technology

Another advantage that comes with outsourcing is access to up-to-date accounting technology. Most accounting firms employ the latest accounting software and tools, facilitating efficient, accurate, and timely financial reporting. Since outsourced accountants typically come equipped with their own software and technology, the restaurant is also spared the cost of purchasing these (often expensive) programs itself.

5. Focus on Your Priorities

By delegating financial management tasks to outsourced accountants, restaurant owners can concentrate on their primary purpose of running their business. When working with experienced and reliable experts, business owners can also be assured that all financial and regulatory requirements are being met.

Thinking of Outsourcing?

RBT CPAs offers outsourced accounting and CFO services to restaurants in the Hudson Valley and beyond. Our experienced professionals understand the unique factors and challenges impacting the restaurant industry. Whether you are looking to outsource your restaurant’s accounting functions or seeking guidance related to tax, accounting, or audit matters, RBT CPAs is here to support you. Get in touch with our experts today to find out how we can be Remarkably Better Together.

Restaurant point-of-sale (POS) systems serve as command centers where numerous functions come together, streamlining everything from order taking and payment processing to sales monitoring and inventory management. Beyond helping restaurants optimize their everyday operations, point-of-sale systems also help promote long-term success by providing critical insights for decision-making. While features vary by system, most POS platforms offer a wide range of benefits for restaurants, including the following:

Efficiency

One of the most noticeable advantages of a POS system is improved efficiency in day-to-day operations. POS systems cut down on ordering and processing times, allowing staff to take and update orders quickly. Menu items and prices can be updated easily, with changes reflected immediately in the system. POS systems also allow for better communication between servers and cook staff, sending order information directly to the kitchen and minimizing delays. In addition, these systems automate essential processes such as order entry, payments, and inventory tracking, saving time and reducing errors.

Improved Guest Experience

POS systems help facilitate a positive and smooth guest experience by tracking and updating reservations, offering table mapping capabilities, and making it easier for hosts to seat guests quickly. Faster service reduces wait times, while automated systems lower the risk of order and billing errors. The ability to accept multiple forms of payment—including credit cards and mobile payments—adds convenience and flexibility for customers. In addition, POS technology allows restaurants to monitor the visits and preferences of repeat customers and to establish rewards or loyalty programs to incentivize guests to return.

Data and Insights

POS systems provide valuable data and insights for restaurants, including sales numbers, inventory levels, customer information, and consumer trends. This data can then be used for important financial and operational processes such as budgeting, revenue forecasting, financial reporting, and inventory management. Restaurants can also use this information to assess their performance and make key business decisions.

Increased Profitability

By streamlining restaurant operations across the board, POS systems expand opportunities for cost savings and increased sales. POS systems also allow restaurants to track the profitability of different menu items and to optimize menus and pricing based on that data. Using a POS system, restaurants can identify their most profitable items and then direct employees to promote those items to customers.

Employee Management

POS systems simplify employee management by tracking staff performance, which in turn improves employee accountability and informs training efforts. Managers can track what menu items individual employees are selling, who is pushing the most profitable items, who is selling the most add-ons, and how quickly staff are turning over tables. Using this information, management can identify high performing employees and utilize them to train other staff. In addition, by monitoring busy periods and table turnover times, POS systems help to inform staffing decisions. Managers can decide how many staff are needed at different times of the day or week based on this information. This creates a more efficient system of staffing, ensuring sufficient service during busy times and preventing overstaffing during quiet periods. POS technology can also aid in staff scheduling and automate payroll processes, saving significant time for restaurant managers.

Security

POS systems accurately track restaurant sales, reduce the opportunity for human error, and help to prevent theft and fraud. Features like data encryption, regular updates, customized user permissions, multi-factor authentication, and real-time monitoring help to keep data secure.

Integration with Other Programs

POS systems integrate with other essential business tools such as accounting software, online ordering platforms, inventory management systems, and payroll systems to share information, reduce manual data entry, and increase efficiency.

In Need of Financial Expertise?

A POS system is a powerful tool for optimizing your restaurant’s efficiency and profitability. For additional guidance on maintaining the financial health of your business, you can depend on RBT CPAs. Our accounting experts, familiar with the distinct challenges and opportunities facing the restaurant industry, can help you manage the financial side of your business while you focus on running your restaurant. Reach out to RBT CPAs for all your accounting, tax, audit, and advisory needs—and find out how we can be Remarkably Better Together.

You’ve put countless hours—and likely many years—of hard work, dedication, and passion into your restaurant business. To ensure that the legacy you have worked so hard to build continues after you step away, you need to formulate a plan for the future of your business. Creating a succession plan is crucial for ensuring business continuity and enabling a smooth transition of ownership when the time comes.

When is the best time to create a succession plan? The answer is, as soon as possible. A succession plan often takes years to develop and execute, as you will need time to identify, prepare, and mentor your chosen successor(s). You should begin planning for succession long before you expect to retire or sell your restaurant. Life is unpredictable, and you never know when circumstances may demand a transition of ownership. The absence of a succession plan can have devastating financial and operational consequences for your business. In the case of an unexpected event such as injury, illness, or even death, you’ll want to ensure that the management of your business is left in trusted hands.

Not only does a detailed succession plan provide a blueprint for the future of your company, but it also earns the confidence of your employees, investors, customers, and other stakeholders by assuring them that a plan is in place for the inevitable transition of leadership. As such, you should communicate your plan, as well as any changes or updates, to all relevant stakeholders. Your succession plan should be regularly reviewed and adjusted if necessary to ensure alignment with the business’s goals and needs.

A key element of any succession plan is, of course, the selection of a successor. Since many restaurants are family-run businesses, succession plans often involve selling or gifting ownership to the next generation. Other possible strategies include identifying and developing a non-relative successor, selling to an outside party, or establishing buy-sell agreements in the case of multiple owners. You may choose to sell the building if it is owner-occupied, or you may decide to sell the business, hold the real estate, and rent to the new business owners.

As you can see, there are several different ways to approach the issue of succession. But how do you know what the best course of action is for you and your business? That depends largely on your personal goals and individual situation. A trusted team of advisors—including an accounting professional—becomes a critical resource when making these kinds of decisions.

RBT CPAs’ accounting experts are available to work with you to create a succession plan that best meets your goals. Our firm has been supporting restaurants at all stages of their business lifecycles for over 55 years, and our professionals are deeply familiar with the unique challenges and opportunities facing the restaurant industry. You can count on our CPAs to help you navigate the tax implications and other financial considerations of transferring ownership of your business.

Don’t leave your legacy up to chance. Protect the future of your business by developing a succession plan today. Call RBT CPAs to speak with one of our experts, and find out how we can be Remarkably Better Together.

Our last article discussed the rising costs facing restaurants due to factors such as increased tariffs, higher minimum wages, and the bird flu. During times of economic uncertainty, financial planning becomes even more critical to the survival of small and medium-sized businesses. This is especially true in the restaurant industry, where profit margins are already small. Revenue forecasting is a key element of financial planning, but can be difficult for restaurants due to the multitude of factors that affect consumer behavior and revenue stream. Even so, revenue forecasts are crucial tools that allow restaurants to assess and predict financial performance, optimize operations, and make informed business decisions.

Revenue forecasting is the process of estimating a business’s future revenue over a certain period using historical data, trends, economic conditions, and other factors as a basis for analysis. The first step in revenue forecasting typically looks at a restaurant’s historical data, which can be gathered through Point of Sale (POS) systems, inventory management systems, reservation systems, and other tools. The data obtained from these sources provides valuable insight into sales numbers, best-selling menu items, inventory usage, dining patterns, and more. Historical data should not be relied upon as the only source of information for predicting future revenue, as many other factors play a role. However, this data provides a basis upon which restaurant management can assess past sales activity and predict future sales.

Another component of revenue forecasting involves identifying trends, consumer behaviors, and external influences on revenue. Restaurant owners and managers should consider the impact of seasons, holidays, and weather on consumer behavior and sales. Examining these influences can help guide the revenue forecasting process as well as key operational decisions.

Also important to consider when revenue forecasting is economic climate. A range of variables—some predictable and some not—impact the economic conditions under which restaurants operate. Inflation, government policies (i.e., tariffs), natural events (i.e., bird flu, droughts, vegetable blights), and other factors can affect ingredient availability, prices, consumer sentiment, and revenue significantly.

Despite the challenges restaurants face in forecasting revenue, these forecasts remain critical to the financial planning process for several reasons. Revenue forecasts provide valuable information and help restaurants to:

• Make key decisions: Revenue forecasts guide management in making important financial and operational decisions related to budgeting, ordering, renovations and improvements, staffing, and more.
• Manage inventory: By studying historical data and predicting future sales, restaurants can more accurately estimate inventory needs and thus prevent wasted inventory or ingredient shortages.
• Meet staffing needs: Revenue forecasts help restaurants determine which periods will be busiest, and therefore how many staff members are needed at different times to meet consumer demand. Management can then hire and schedule staff strategically to ensure the business runs smoothly without overstaffing.
• Increase profitability: Optimizing inventory, staffing, and operations helps to streamline processes and increase profitability.
• Improve investability: Investors are more likely to have confidence in restaurants with data-supported revenue forecasts.
• Enhance customer experience: Adequate staffing, organized processes, and sufficient inventory all result in an improved experience for restaurant guests. Positive customer experiences build a restaurant’s reputation and drive growth.

Revenue forecasts are important tools that allow restaurants to gain insight into their financial performance and prepare for the future. These forecasts enable management to make informed business decisions and optimize operations using data-driven strategies. RBT CPAs is here to guide you through the process of revenue forecasting and financial planning for your restaurant. RBT’s experts are intimately familiar with the financial challenges and opportunities facing the restaurant industry. We are prepared to help you navigate the complexities of financial planning in the face of an ever-changing economic landscape. For more information on our services, visit our website or call us today.