Hospitality

Thin margins, lots of staff, and cash that moves daily.

Cafés, restaurants, pubs and hotels. High volumes of small transactions, a large and changing payroll, and margins where a few points on food or wage costs decide the year.

Independent practice since 2001 · ICAEW Chartered Accountants · Xero Silver Partner

What we see

The pattern in this sector.

Hospitality runs on two percentages: cost of sales and wages as a share of takings. Move either by three points and a profitable site becomes a loss-making one. The problem is that most operators see those numbers quarterly or annually, long after the menu, the rota and the supplier prices have already done the damage.

The data exists. EPOS systems record every sale, suppliers invoice electronically, and payroll is already digital. What is usually missing is the join between them, so takings, purchases and wages sit in different systems and nobody looks at them together until the accountant does at the year end.

When they are joined, weekly reporting on gross margin and wage percentage is straightforward, and it changes how rotas and menus get decided.

Watch outs

Where it goes wrong.

Tips and tronc. The Employment (Allocation of Tips) Act requires tips to be passed to staff in full and fairly. How they are distributed changes the National Insurance position, and a properly run tronc scheme needs setting up correctly.

Payroll volume. Casual and seasonal staff, variable hours and frequent starters and leavers make hospitality payroll error-prone. Minimum wage underpayments are usually accidental and still expensive.

VAT on food. The difference between zero-rated and standard-rated food depends on whether it is hot, eaten on the premises, or sold as catering. Mixed businesses get this wrong regularly.

Cash. Cash takings need reconciling daily. Gaps between the till and the bank are both a control problem and something HMRC look for.

What we do

The whole job, on a fixed monthly fee.

Business accounting

Year-end accounts, corporation tax, VAT and payroll, done properly and done early.

Bookkeeping

In-house bookkeepers alongside the accountants, so the numbers are current rather than annual.

Live reporting

Margin by job, product or client, refreshed rather than rebuilt. Where the sector-specific answers actually live.

Finance Partner

A whole finance team on one fixed monthly fee, when you need more than compliance.

Talk to someone who has seen it before.

A first conversation costs nothing and takes about half an hour. We will tell you what we would do and what it would cost.