How Your Pizzeria Can Avoid An Audit
The Pizza Audit Phenomenon. It’s a real thing. Don’t get caught up in it.
The IRS is on to all the small business tricks. Those who run on predominantly cash are on the fast train to audit town. In fact, they found this to be so prevalent that they invented an entire audit guide to trap small cash businesses following the “pizzeria model”. That being, selling lots of a cheap product at high volume to make cash hand over fist.
Look, no one knows what you are doing until someone starts to notice what you’re doing. Then they REALLY want to know what you are doing. They = auditors, the DoL, the IRS, the lawmakers, the fun takers, etc. They hear you’ve got a successful run going and they want fair share to go to your employees, and of course take some for the good ol’ U S of A.
4 Tips To Avoid An Audit
How can you and your restaurant avoid falling prey to this invasive audit phenomenon?
- Keep a great record of everything.
- Invest in some fancy software to keep your general ledger up to snuff.
- Know how much you are spending, how much you are claiming, how much you are paying, and how much you are making.
- Report everything. This can be simple to do if you integrate your POS system with your payroll and general ledger system. (note: Balance Point can provide POS integration for you!)
How Can A POS And Payroll System Help Avoid An Audit?
If you do decide to let your POS and payroll systems work together in perfect synergy, well the rest is easy. Everything will be aligned –your cash flow, your employee pay, your debits and credits, the stars, the planets, and whatever else can be aligned. You won’t have to back pedal to explain situations. You won’t have employees who fall short of their allotted tip requirement. You won’t get behind on balancing your general ledger. You won’t forget to pay your taxes and fill out all your forms. You won’t even have to think about the things that keep you up at night worrying about your business.
Of course, there are restaurants that are purposely trying to hide money and get away with skipping out on certain fees and taxes. However, it’s the unsuspecting business who try to do everything right that are the real unfortunate souls in this situation. Despite their best efforts, things can fall through the crack, mistakes can be made, and situations can go unnoticed. With a system in place to avoid these pitfalls, restaurants are properly reporting, staff is properly paid, and everyone wins.
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