As we step into 2024, restaurant operators across the United States are preparing for significant minimum wage increases. With nearly half of the states enforcing new labor laws, labor costs, regulatory compliance, and overall profitability are top concerns for the industry. These changes not only increase payroll expenses but also introduce challenges that demand
innovative solutions.
For restaurants, labor costs represent one of the most significant operational expenses. The increases in minimum wage, while beneficial for workers, place a burden on restaurant owners, especially those operating with slim profit margins. “Back office management, specifically payroll, has been challenging,” says Wayne Lipshitz, CPA and CEO of Restaurant and Retail Financial Management Group. “In response to minimum wage laws, operators have become more flexible with price increases.”
To combat these challenges, more restaurant operators are turning to comprehensive software solutions like Restaurant365 to streamline their operations and maintain compliance. In 2014 Lipshitz became one of the first partners in Restaurant365’s channel partner program. “The unified system simplifies accounting, bank reconciliations, inter-company transactions, managing tips, and labor, making everything more restaurant-centric and efficient.”
The software’s real-time reporting capabilities, enabled by hundreds of POS integrations with systems like Qu Beyond, PAR Brink, NCR Aloha, Toast, Square, and others allow operators to make quick adjustments based on daily and weekly reporting. This is crucial for managing performance indicators and implementing necessary operational changes. The labor forecasting module of Restaurant365, built on historical data and expected volumes, enables accurate staffing, reducing unnecessary labor costs and minimizing overtime.
“There will be a profound shift in the geography of the P&L. We need to manage labor based upon a productivity measure that is not affected by minimum wage or menu price increases. Entrées per labor hour is our metric,” says Scott Putman, vice president of finance, at Dave’s Hot Chicken, a 192-location franchise with 90 more openings this year. “At the operating level, we focus on meaningful labor, remove mundane tasks, and implement cost-saving solutions completed at the manufacturer. Utilizing tools like Restaurant365’s Actual vs. Theoretical reports and inventory module allows our management teams to focus on efficiencies that drive financial results”
With the ongoing development of AI, the technology in the restaurant industry is constantly evolving. Restaurant365 will play a crucial role in helping restaurants navigate these changes by remaining adaptable and identifying opportunities for growth to optimize operations. “The software has grown from a simple, restaurant-centric system to a robust platform that outperforms any competition,” Lipshitz says. Amplifying Restaurant365s ability to conquer change in the industry.
In the face of rising minimum wages, embracing technology solutions like Restaurant365 offers a pathway for restaurant operators to navigate increased labor costs. By integrating financial and operational management into one platform, restaurants can make informed decisions, streamline operations, and ultimately thrive in an ever-changing industry landscape.
“My journey with Restaurant 365, from its early days to now, has been incredible,” Lipshitz says. “It demonstrates the significant advancements in cloud-based software, making it easier and more cost-effective for restaurants to manage their operations.”
To stay on top of minimum wage increases and learn how you can manage labor more effectively visit the Restaurant365 website today.
