BDO Restaurant CFO
Bootcamp: Event Recap
What happens in Vegas doesn't have to stay in Vegas! Last week, our team hosted the BDO Restaurant CFO Bootcamp in Las Vegas, and spent three days delving into key issues and industry trends for finance accounting professionals in the restaurant industry. What were some of the hot topics discussed?
1.Responding to shifting labor practices and issues
As unemployment rates decline and external pressures shift workforce dynamics, minimum wage requirements are increasing across the country, most recently with Los Angeles approving an ordinance
that would raise the minimum wage to $15 per hour by 2020. Paid sick leave regulations are also beginning to pop up in various localities. With labor being one of the biggest line items on restaurants' budgets, it's important that the industry begins preparing for the impacts of these shifts in labor and employment practices.
2.Keeping up with the evolution of restaurant technology
Between increased demand for mobile ordering and payment capabilities, and new regulations requiring secure EMV "chip" card processors, restaurants are investing more in technology now than ever before. Restaurants are under pressure to bolster their mobile capabilities to meet customers' growing expectations for convenient and secure ordering and payment systems. Meanwhile, the fast-approaching October 1 deadline for EMV-compliance means that restaurants must have payment systems and terminals in place that are capable of reading and processing EMV card transactions in order to avoid potential liability for credit card fraud. In this highly competitive, evolving industry, restaurants that are not focusing adequate energy and dollars on strengthening and securing their technology systems may find their doors closed.
3.Strengthening internal controls and mitigating fraud risks
Most companies have a protocol in place for internal controls and fraud prevention, but restaurants should take the time to regularly refresh and update these policies to ensure they’re enforced. It’s important to take a realistic look at fraud risks: at some point in the life cycle of a restaurant’s business, most are at risk for experiencing fraud. If an employee or a third party has motive and is able to rationalize the act, he or she may seize an opportunity to skim funds or commit fraud. While no method is foolproof, the best way to deter fraud is to invest in and properly train employees and maintain a thorough set of internal controls.
4. Recognizing opportunities to minimize tax burden
While some might cringe at the thought of yet more regulation, certain recently issued repairs and maintenance regulations are considered taxpayer-friendly. Specifically, the new rules help restaurants determine whether certain expenditures should be capitalized and depreciated or immediately expensed. Given that restaurants are typically asset-heavy and require regular repairs and maintenance, the new regulations may offer opportunities for restaurants to alleviate some of their tax liability around those activities. Additionally, strategically structuring entities can help restaurants lessen tax obligations and is especially important to keep in mind when opening multiple locations. When approaching tax structure and opportunities, restaurants should take the time to understand their unique positions so they can minimize tax burden.
If you missed us at CFO Bootcamp, or if you have any questions, contact your BDO Restaurant professional.