Filtering Through the Tech Landscape: How Cloud Accounting Enhances Financial Visibility and Reduces Noise

Summary: Whether you own a local family restaurant or an established multi-unit franchise, your business needs the best-possible financial visibility to stay competitive. Enter cloud-based accounting, which can provide you with real-time insights, streamlined reporting, and smarter decision-making capabilities. In this article, you’ll learn how Aprio can help your business leverage cloud-based solutions to unlock efficiency, profitability, and growth.

The restaurant and hospitality industries have long been fast-paced and competitive, but never more so than in the post-pandemic environment. Many owner/operators are facing mounting pressure to control costs, improve efficiency, and respond quickly to both market and customer changes. What’s more, owner/operators are inundated with technology options promising efficiency and growth. But the challenge isn’t necessarily a lack of tools; it’s knowing which solutions truly deliver value.

While there is no clear answer to keeping pace with post-pandemic industry changes, there is a solution to manual operational headaches and the seemingly never-ending tech search: cloud-based accounting and enterprise resource planning (ERP).

When it comes to back-office operations, cloud-based accounting and ERP platforms are helping restaurants and franchises filter through the crowded technology landscape. By providing real-time financial visibility and streamlining reporting, cloud solutions are giving owner/operators the clarity they need to make smarter and faster business decisions.

To better understand the impact that cloud-based accounting and ERP can have on your business, let’s explore key benefits, common pitfalls, and future fintech trends to watch for.

Recap: why financial visibility matters to restaurants and franchises

Today’s books and records can only tell you so much about the financial health of your business. To better understand where your business is going and progress toward achieving your profitability goals, it’s important to understand the story behind the numbers. 

As a restaurant, franchise, or hospitality business owner, you’re balancing financial growth against thin margins and often unpredictable operating costs. Food price fluctuations, labor shortages, rising wages, and shifting customer behavior can impact your profitability goals, as well.

Without timely, accurate financial data or solid information about trends and patterns, you’ll be forced to make critical financial and strategic decisions based on incomplete or outdated information. For example, if you wait until the end of the month to analyze cost of goods sold (COGS), you could miss weeks of overspending, which impacts your short- and long-term budget. Similarly, if you haven’t connected your payroll data to your sales reports, you may not see scheduling inefficiencies until after they’ve impacted your profits.

Cloud accounting can help you solve these issues; most platforms can give you immediate access to performance data, enabling you to spot problems quickly and take corrective action before they erode profitability.

Making the shift to cloud-based accounting and ERP

Once you have made the switch to cloud-based accounting, you’ll instantly see where your traditional accounting system has fallen short. The most game-changing benefits include:

• Consistency across locations: By consolidating your financial reporting into a central location, you’ll benefit from comparability across all your restaurant and franchise units and can make sure your whole team is working from one source of truth.
• Consolidated books and records: With cloud-based accounting, you and your general managers (GMs) will gain visibility into performance at both the unit and enterprise level, helping you identify trends and benchmark results.
• Improved compliance: With built-in controls and audit trails, a cloud system can help you maintain accuracy across your records and enable you to better meet regulatory requirements.
• Labor optimization: By integrating your payroll data with sales forecasts, you can schedule staff more efficiently and avoid overstaffing during slow periods.
• Menu engineering: Cloud-based systems that track COGS at the item level allow you to identify high-margin dishes and adjust your menu options accordingly.
• Cash flow management: With instant access to payables, receivables, and revenue, you can forecast cash needs and avoid liquidity crunches.

Aside from these benefits, one of the most profound advantages of a cloud-based system is collaboration and communication. Traditional accounting systems have historically created silos in the restaurant and hospitality space, which can fragment data or slow down reporting. These silos can be particularly detrimental if you operate multiple units or franchise locations.

Fortunately, cloud-based ERP and accounting platforms can help you break down barriers and create more understanding across your team. After all, team cohesion is essential in an industry where small adjustments can have a significant impact on profitability.

Navigating cloud security and compliance considerations

As with any technology tool, data security is critical and has the power to either make or break your business’s investment. It’s also one of the many reasons owner/operators hesitate to move to the cloud.

However, thanks to advancements in modern cloud technology, today’s ERP platforms are often more secure than traditional on-premises systems. Most platforms come built with:

• Encryption and secure hosting
• Regular updates and patches to protect against evolving threats
• Role-based access controls that help ensure your employees only see the data that’s most relevant to their responsibilities
• Automated backups and disaster recovery to prevent data loss

As you research, evaluate, and vet potential platforms, it’s important to work with a trusted, professional security advisor to make sure the tool you choose complies with industry standards and is positioned to help you maintain strong, airtight internal controls.

Common tech mistakes to avoid

While the benefits of cloud accounting are clear, you may struggle with the implementation phase if you don’t have the right strategy. Here are the most common mistakes companies make when implementing new technology and how you can avoid them in your own business:

• Underestimating training needs: From your GMs to your waitstaff, your employees need to have a strong understanding of how your cloud-based accounting and ERP system works and how to use it effectively.
• Failing to integrate systems: To get the most value out of your system, it’s important to integrate it with all the other platforms that keep your business running smoothly, including your POS, payroll, and inventory systems.
• Choosing the wrong platform: Remember that not all cloud accounting solutions are built for the complexity of multi-unit restaurants or franchise operations. Therefore, it’s important to partner with an industry-specific provider like Aprio to properly vet the solutions on the market and choose the one that best fits your business’s unique needs.
• Overlooking change management: Keep in mind that moving to cloud-based accounting isn’t just a one-and-done decision; you need to make sure that all your business leaders and stakeholders are bought in and that you clearly communicate the shift to your staff.

Looking ahead: The future of cloud accounting

If you own a small restaurant or a single location and don’t think a cloud-based system works for your organization, think again. Many platforms offer scalable solutions with flexible pricing models, which allows smaller owner/operators to access enterprise-grade tools without overextending their budgets. As we look ahead to the future of cloud accounting and ERP, it’s clear that the sector is only starting to realize its full potential.

In fact, within the next three to five years, we can expect to see:

• Deeper integrations between ERP, POS, and workforce management systems across the restaurant, franchise, and hospitality industries.
• Artificial intelligence (AI)-powered insights that can provide owner/operators with predictive analytics around costs, staffing, and even customer behavior.
• Enhanced mobile accessibility for restaurant and franchise owners on the go.
• Greater personalization as platforms adapt to the unique needs of the restaurant, franchise, and hospitality industries.

Final thoughts

As you consider making the move from traditional accounting, remember that cloud-based accounting and ERP platforms represent a strategic investment, one that can empower you with the visibility and control you need to succeed in a marketplace that’s only growing more competitive.

At Aprio, our advisors work with owner/operators and hospitality leaders to evaluate technology options, implement cloud solutions, and maximize their impact. Whether you’re a single-unit operator or you manage a multi-location enterprise, Aprio can guide you through the journey and help you leverage the power of cloud accounting to achieve long-term success.