Restaurant Owners: If You Spend More Than an Hour on Payroll, Read This

Owning a restaurant is difficult enough on its own, without the added challenge of managing payroll. With tight budgets and slim margins, many owners try to cut costs by managing tasks like payroll, tip outs, and compliance themselves—often using manual methods or a patchwork of tools. But while you might think this is a cost-effective way to do business, it’s actually a drain on your time and efficiency. Here’s what to do instead. 

Simplicity Is the Goal

Restaurant owners want to spend less time managing tasks like payroll, but many don’t know how to do it differently. A great way to tell if you have payroll under control is to record how much time you spend on it. If it’s more than an hour per week, you have an opportunity to improve your processes. 

The ideal scenario is to remove hours spent in areas like this every week so that you can instead put that time toward growing your business. So, how do you get there? Simplification is the answer, and technology can provide it. 

Crafted vs. Cobbled

Oftentimes owners will piece together point solutions to manage a variety of tasks. They might get a point of sale (POS) tool, a payroll tool, an inventory tool and a scheduling tool, then try to patch them all together. This can vary in effectiveness, especially when tools don’t integrate—often resulting in a clunky, difficult-to-use system. What’s more, it’s almost impossible to train someone else to use a system like this, and it cannot be easily replicated when you decide to scale and launch another restaurant location. 

The other option is going with one platform that covers all your team management needs. Just watch out for generic systems—some were built for other industries or pieced together through acquisitions, which can still leave you with a messy, disconnected setup. Look for technology instead that has built what you want (e.g., payroll, tip outs, scheduling) in one place and was crafted specifically for the restaurant industry. 

Managers and Employees Win

Payroll isn’t just a managerial issue; it affects everyone. That means if you get it right, everyone wins. It’s clear how managers and owners benefit from streamlined systems that save them time, but employees also appreciate such technology. 

When your staff can access their pay stubs, W2s, shift information (e.g. schedules) and tips all in one place, it makes their lives significantly easier. Such a solution also allows you to pay employees on their terms. For example, some might like to get their tips on their way out the door after a shift, while others want tips rolled into their next paycheck. 

A team management platform designed for restaurants will enable you to support individual employee preferences based on what works best for each. When your team members are happier, you’ll improve your retention–which in turn saves costs and improves morale. 

Compliance Without the Headache

Outside of the sheer amount of time it takes to be labor and payroll compliant, time clocking and payroll mistakes could cost any restaurant thousands of dollars in legal action. A team management platform designed to bring together time clocking, payroll, alongside built-in labor compliance tools, will ensure that operators avoid these costly fees. 

An all-in-one solution with integrated labor and wage compliance will automatically apply local labor regulations to calculated labor data for compliant payroll syncs. By automating compliance in this way, you’ll have a much easier time sticking to the rules and staying out of trouble. 

Implementing software doesn’t give you a pass for getting familiar with the law (you still need to know how it applies to your restaurant), but it can help you easily check the legal boxes. 

Restaurant owners might think they’re being cost-effective by managing and paying their employees with disparate systems or manual data entry, but the opportunity cost can be huge. If your processes aren’t giving you hours back in your day–and if your technology isn’t specifically crafted for the restaurant world, there’s a good chance you’re being held back. Get the right payroll solution, and your business and employees will experience the difference.