Choosing A Provider for Your Restaurant
Restaurant owners wear many different hats. You manage food ordering, business financials, customer concerns, and employees, just to name a few. This juggling of responsibilities makes it difficult to determine how to choose a restaurant payroll provider. You might even be prolonging the decision because it seems like one more item on your to-do list. However, we don’t recommend waiting to implement a restaurant payroll and scheduling software any longer.
Payroll software can reduce the time you currently spend on tip-to-min calculations, labor costs, and compliance to mere hours. It can automate your workflows, integrate with point-of-sale systems, and so much more. With the right guidance, the decision-making process doesn’t have to be complicated or confusing. In this article, we will walk you through how to choose a restaurant payroll provider, so you make an informed purchase that benefits your business.
How To Determine A Restaurant Payroll Solution:
When it comes to determining your restaurant’s payroll solution, there are many factors to consider. You have to consider your restaurant’s needs and what works best for your employees. A great place to start is determining whether you plan to handle the payroll yourself or partner with a payroll software provider. To make that decision, weigh the following factors:
What Type of Restaurant Do You Own?
The type of restaurant you own can play a part in deciding to partner with a payroll provider. Do you manage a self-served restaurant like a buffet or a do-it-yourself pizza parlor? Perhaps you own a dine-in restaurant with a waiting staff that earns tips. Whichever the case, self-service dining vs. tipped dining can affect your payroll decision.
1. Self Service
The manual task of record-keeping for self-service restaurants can become monotonous and time-consuming. It can also result in several tax errors. Because self-service restaurants have to handle refunds, sales taxes, and quick-purchase turnarounds, automating these processes can save your business time and money. Certain payroll providers offer integrations with point-of-sale (POS) software. The POS solution handles your transactional needs on a kiosk, tablet, or cloud-based interface. The payroll software then uses this data to give you flexibility in income types, business rules, and one-time purchase overrides.
2. Tipped Employees
The regulatory task of tracking how tips affect minimum wage can be difficult to manage on your own. Some states require restaurants to pay full minimum wage plus tips, while others enable restaurant owners to deduct employee pay tips. Some payroll solutions offer tip-to-min and overtime pay calculations. These automatic computations keep employee pay accurate and compliance in check.
How Many Employees Do You Have?
The number of employees you have can affect your decision to implement a payroll solution. Many payroll providers price their software on a per-employee, per-month basis. The cost and licensing associated with five employees are different from what is necessary for fifty employees. In other words, a small restaurant’s payroll software will be significantly more affordable than a large restaurant’s payroll software.
While you can handle payroll in-house and utilize Excel spreadsheets to save on initial costs, the errors resulting from these kinds of calculations can mean potential fines. Likewise, hiring an outside person to handle your payroll can cost as much as implementing a payroll software itself. Choosing a payroll provider ensures your employee pay is accurate and timely.
Having a clear idea of the number of employees your organization has can also help you determine how many people will use the payroll software. When purchasing software, you want to make sure the license allows all of your employees who need access to utilize it. Otherwise, you won’t be able to take full advantage of the payroll system.
Do You Have Anyone On Staff That Does Payroll?
Whether or not you currently have someone on staff that handles your payroll, a provider can still help. Online payroll software can reduce the time spent processing payroll each pay period. Providers that develop their technology take this a step further. They typically offer software that has built-in error checking algorithms and alerts so that you can fix potential errors before processing payroll. Furthermore, since payroll software is available online, you can process your restaurant’s payroll, whether working from home or during an emergency.
Several payroll providers employ a team of tax compliance experts who automatically update the federal, state, and local tax tables on your behalf. Providers with tax compliance departments are more equipped to help alleviate the burden of staying on top of ever-changing legislation and ensure your payroll taxes are paid accurately and on time.
Suppose your payroll manager cannot keep up with tax compliance changes or is too sick to enter the restaurant. That’s no problem. An online payroll system that utilizes a tax compliance team allows you to stay up-to-date on compliance and process payroll anytime and anywhere.
If you don’t have someone on staff currently, a payroll provider can reduce your tax error burden and put compliance dollars back in your restaurant’s pocket. Whether you have a payroll specialist or not, implementing a solution that saves time and money is beneficial to your business’s longevity.
Restaurant Payroll Software Factors to Consider
Now that you’ve determined payroll software is the right fit for you, it’s time to choose the best provider for your needs. While this task can seem daunting, it doesn’t have to be. Remember, a provider will streamline your workflows, reduce costs associated with payroll staffing, and mitigate compliance risks for you so you can focus on growing your business. So, let’s take a look at some factors to consider when selecting your payroll solution.
Required Software Features
Many people look for employers that offer various payment methods that fit their needs. Payroll software that provides the flexibility of multiple pay options can give you a competitive advantage. These payment methods include direct deposit, paycards, and earned wage access. Ensure employees won’t be charged for paycard usage, if available. Any usage fees could discourage them from utilizing it, making it more challenging to achieve 100% paperless payroll.
Verify that the payroll software gives you control over gross-to-net calculations. Ensure you also have access to pre-processing reports, like Payroll Summary Audit and Net Pay Comparison, to fix any potential errors before payroll processing. Many payroll providers also offer garnishment services that take into account payments via paper check or electronic funds transfer and include specific calculations and deductions. These types of software features will give you more flexibility in managing payroll for your restaurant.
Data Transfer Capabilities
Another factor to consider when you’re figuring out how to choose a restaurant payroll provider is data transfer capabilities. It’s important to know what the data transfer process looks like and what you must provide. Here are some questions to consider when choosing payroll software for a restaurant:
- Are you moving from a manual system or switching from one payroll solution to another?
- If you currently use a payroll solution, will you have access to your data for the transfer?
- Will, your new provider, assist you with the data transfer, or will you need to help input the data?
- Will your current provider charge an export fee to transfer our data to your new payroll solution?
Consider restaurant payroll providers that have a hands-on implementation process. A thorough process ensures your data gets set up correctly, so your payroll and taxes are accurate.
A final component to consider in your evaluation process is whether or not your existing hardware, or any new payroll hardware you’re looking to purchase, is compatible with your restaurant accounting and payroll software.
If you’re currently using a time clock or biometric reader, verify the brand and model are compatible with the payroll provider’s software. Some providers require servers or hardwired devices for their software to work. If you’re considering a new payroll software for your restaurant and need to use a hardwired time capture option, here are a few questions to ask:
- How many employees need to be enrolled?
- Are there any time zone requirements?
- Is there a suitable location for the clock with electricity within 5 feet?
- What are the communication methods available at the clock location?
- If there are multiple clocks, will they be located on the same network or different ones?
- Will the clock be protected from the elements?
- Will any employees need to clock in offsite?
If you have multiple locations or franchises, we suggest looking for vendors that offer cloud-based solutions. Cloud-based technology allows employees to clock in using various methods, like biometric time clocks, kiosks, tablets, and smartphones. The time capture data is then synced to the payroll software to ensure accurate attendance tracking and paychecks.
Depending on your restaurant’s needs, you may need to employ more than a one-time capture method. Using a payroll solution that will automatically capture your staff’s time will increase productivity and help control labor costs for a healthier bottom line.
Payroll software with integration capabilities reduces the chaos of juggling multiple systems. Some payroll providers offer integrations with time and attendance solutions, accounting packages, and point-of-sale solutions, which increase restaurant financial accuracy and reduce the time you spend in each application. Instead of shuffling through several reports on multiple systems, a payroll provider unifies critical data into one system.
You will want to inquire with a payroll software vendor about what types of imports, exports, and integrations they have already built or if a customer development will be required to meet your needs. Make sure you factor additional fees like this into your final decision.
Restaurant-Specific Reporting Requirements
Restaurants have specific reporting requirements, such as Form 8846 reporting of Social Security and Medicare taxes on employee tips and Workers’ Compensation. Lack of access to these essential metrics can result in non-compliance, penalties, and loss of business.
Many payroll software vendors offer various pre-built and custom report options so you can create analytics dashboards that meet your specific needs. It’s also essential to see metrics related to turnover, shift overtime, and gross labor expenses to make more informed business decisions.
The Right Software Can Simplify Restaurant Payroll Management
An investment in the right software can help make your restaurant payroll management easier than ever before. Consider restaurant payroll solutions that streamline your manual, paper-based processes so you can focus more on providing an exceptional employee and customer experience. It’s essential to look at your restaurant’s needs when making a decision. Consider the following:
- Supporting multiple pay frequencies and time capture methods
- Managing tip-to-min calculations and overtime pay
- Complex restaurant reporting, like Form 8846
- Staying current with restaurant compliance issues
- Controlling labor costs and turnover
- Keeping up with federal, state, and local taxes
- Integrating with existing point of sale and accounting systems
The best payroll software for restaurants includes solutions and services designed to automate your tasks and align with your goals. An investment in the right restaurant payroll software is a partnership built on a foundation that supports your success.
APS makes payroll and HR easier for restaurants across the nation with award-winning software and support. We know the importance of flexibility in assigning employees to schedules, integrations with POS systems, and managing restaurant-specific items like tip credits, tips-to-minimum calculations, and 8846 reporting. We provide an all-in-one solution that streamlines manual, paper-based processes so you can focus on delivering a great customer experience.
See What You Can Accomplish With APS
Hear why APS’ award-winning technology and services have earned us a 98% customer retention rate.
Your privacy is important to us.
Check out more great articles from the APS Blog covering HR, payroll, and everything in between.
For employers that want to implement covid-19 vaccine tracking, payroll and HR software can help. This article provides tips and resources. Learn more!
In this comprehensive guide on recruiting for restaurants, we provide the best ways to get your job listings in front of the best available candidates. Learn more!
Learn about the different reporting methods for 1094-C and 1095-C ACA annual reporting so you can maintain compliance.
The spirit of Thanksgiving can be channeled into different aspects of the workplace, but many companies just don’t know how. Here’s how they can.
TrustRadius has named APS a 2021 Tech Cares Award recipient. Learn more about how this helps customers and vendors alike.