Even before the COVID-19 pandemic, technology for restaurants was already on the upswing. From tech-friendly POS systems to restaurant bookkeeping, many restaurants have adopted innovative technological tools, whether from customer-facing or internal accounting platforms.

Once the pandemic hit, those restaurants that were able to implement restaurant technology survived the economic downturn. Many eateries were forced to use new technology to assist with a more takeout-oriented business model. Others were able to cut costs and optimize revenue with agile, intuitive restaurant accounting software.

From so-called “contactless tech” (which encourages social distancing) to online order and self-checkout systems, it’s clear that restaurants, bars, food trucks, and similar service establishments simply can’t ignore these new technology trends. After all, during the height of the pandemic, at least 60% of all food orders were consumed off-premises.

RASI’s restaurant accounting software has always been ahead of the technology curve, and we’ve helped everyone from small, independent restaurants to nationwide franchises empower their own operations and make restaurant technology work for them. And we can help your restaurant ensure your accounting platform keeps profit, expenses, vendor management, and more in focus.

So which types of technology in restaurants are here to stay?

Restaurant Technology Trends

Like many business trends, technology for restaurants is largely driven by demand. And this demand originates with how, when, and where your customers eat. To cite just one example, the online food delivery marketplace is nearly $200 billion per year – a figure unthinkable pre-pandemic, but now a regular aspect of modern life.

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Here are just a few examples of how technology in restaurants has grown. Keep an eye on these restaurant technology trends for this year and beyond:

• POS systems. Point-of-sale terminals are becoming more commonplace in every type of restaurant, especially fast-food establishments. But they’re also a regular part of revenue streams such as merchandise sales for other restaurants. This technology in restaurants isn’t going away, so it’s critical that you seamlessly integrate your POS and accounting systems. Once integrated with RASI’s accounting platform, for instance, you’ll enjoy assistance with everything from taxes & compliance to labor & sales management.
• Employee management. Technology for restaurants isn’t just for customers. Smart, forward-thinking restaurants have embraced agile restaurant technology to run their operations more efficiently. And with RASI, you’re able to partner with HR-focused solutions for issues such as compliance around break periods, predictive scheduling, tip pooling and more.
• Reservation systems. Despite the explosive growth in online orders and takeout, reservations are still an important part of most restaurants’ revenue. With streamlined technology in restaurants, such as workforce intelligence analytics, you’re better able to ensure you’re properly staffed to handle ultra-busy business cycles that require an efficient reservation system. In addition, waits that exceed 30-45 minutes can increase the likelihood of customers going to other restaurants.  Having a reservation system creates a better guest experience and convenience for the customer and increases sales for the restaurant.
• 3rd party orders. 3rd parties come with a price for the restaurant. Verifying fees and having checks in balance to ensure proper fees are applied certifies that using these services remain profitable for the restaurant.
• Safety, health & quality control. With enhanced safety and health protocols on everyone’s mind – including your customers – technology in restaurants can also be used to ensure health department compliance, proper equipment operation, safety & health measures, quality control and more.
• Automated inventory tracking. Are you storing too much food? Is your supply chain working for or against you? Does your restaurant optimize all available storage space? If you can’t honestly answer these questions, it’s time to improve the technology for your restaurants with helpful food cost analysis, item level reporting, menu item velocity reporting, and the like. With RASI’s multi-unit inventory software, you’ll have an accurate picture of critical data to help you cut costs, increase revenue, and ultimately improve customer service!

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Put RASI’s Business-Boosting Technology in Your Restaurant Today!

Deciding which restaurant technology to embrace can be a difficult choice. The restaurant accounting experts at RASI are here to discuss how we can help today. Feel free to call us directly at (720) 826-9900, or request a demo today and see first-hand how you can improve the technology in your restaurant today!

The post Why You Should Embrace Technology in Restaurants appeared first on Restaurant Accounting Services, Inc..

Disclaimer: This blog article is strictly for educational and informational purposes only and is not intended to provide tax, compliance, legal or other advice/counsel. Every restaurant owner/operator is ultimately responsible for its own compliance with federal, state, and local regulations in regard to licenses and permits. Please contact your attorney or other relevant legal counsel if you have any additional questions or concerns regarding restaurant licenses and permits.

If you own a restaurant, you’re aware of how hectic it was just getting up and running. And if you’ve already acquired food & beverage licenses and permits, you know how daunting the process can be.

Getting all of your restaurant permits and licenses in order is no easy task. Plus, it’s rarely a one-and-done scenario; thanks to ever-changing regulations, renewals (or, many times, entirely new licenses) which are required to keep your restaurant running at full capacity.

To assist your process in getting the licenses and permits needed to open and run a restaurant we put together this fact-filled guide to help your restaurant navigate the often tricky waters in acquiring them.
 

Getting Started: How to Leverage Pre-Operating Expenses

Still in the planning phase for your restaurant, but fully aware you’d like to acquire food and/or beverage restaurant permits and licenses? Well, here’s a great way to help make the process easier and more affordable (and possibly with less red tape, too): pre-operating expenses.

Opening a restaurant requires up-front purchases and expenditures that occur long before opening the doors and serving customers. These purchases are not accounted for the same way that post-opening purchases are.

Make sure that all pre-opening purchases are recorded on your balance sheet as a capital asset. With RASI’s accounting software and services at your disposal from day one, you’ll ensure that all restaurant expenses are recorded, reconciled and 100% accessible whenever you need the data.

Capturing your restaurant pre-opening expense from day one with RASI, will allow you to have greater accuracy with your cash flow and balance sheet liabilities and assets. Our supporting document shows that this can also include permits for eventual business expansion. Again, always consult with your attorney to ensure your food & beverage licenses and permits needed to open a restaurant can be included with these capital assets.

Different Restaurant Permits & Licenses Required to Run Your Business

Not sure how to get a restaurant license? Here’s a general rundown of some restaurant permits and licenses you need to know about. This list is not exhaustive; always check with state, county, and local jurisdictions to ensure full compliance with your restaurant licenses and permits.

Business License

The business license is the foundational permit for your new restaurant. Every U.S. restaurant, catering service, and related business requires a business license. And depending on where your business operates, you could pay a portion of your sales, or a flat annual fee.

Consult with your state & local resources to find the particulars on how to acquire a business license. The cost for this particular category of restaurant permits and licenses typically includes an application fee and ongoing expenses, usually less than $10,000.

Food Service License

Not all counties in the U.S. have health departments. But most do, and these agencies usually issue food service licenses. Check the U.S. Food & Drug Administration (FDA) website to learn more about how to apply in your state and county. Once processed, the local authorities will come out and inspect your facility and ensure you’re ready to open your doors. Keep in mind that regular inspections are included for any restaurant that obtains a food service license, as this is one of the licenses and permits needed to open a restaurant. Prepare to spend up to $1,000 or more for this restaurant permit & license.

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Employer Identification Number (EIN)

An Employer Identification Number (EIN), is a free to obtain, unique number that identifies a business to the Internal Revenue Service. Every restaurant must have an EIN. Processing times take a while; on average, the IRS issues about one EIN per day. If possible, get the ball rolling on this restaurant permit & license as early as possible. Apply here for your EIN.

Building Health Permit

This license is closely related to your food service license, since your establishment must meet certain state and local code requirements. Even if your food preparation procedures are spot-on, it doesn’t matter if your roof is leaking or you have mold issues.

An online search for building health permits should help you find the right application, but you can also consult your attorney for accurate information. Some building health permits are less than $100, while others could cost in excess of $1,000.

Liquor License

The ability to serve alcoholic beverages is a game changer for many restaurants; this is how many establishments can yield optimal ROI. A liquor license is required to do this. Some states and counties require separate restaurant liquor permits and liquor, wine, and beer licenses.

Like the EIN license application, start this one as early as possible, since most state agencies must process a significant backlog of licenses. Check with your state and local governments on how to apply. Costs vary considerably, depending on your location. Once you have a liquor license, check out our article on how to accurately track liquor costs for your restaurant or bar.

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Sign Up With RASI

Protect your assets with RASI’s accounting software and services. With continued education & training on all things accounting and payroll best practices, industry and compliance alerts, and much more. 

Request a demo, drop us a line, or call our restaurant accounting professionals today at (720) 826-9900.

The post Restaurant Permits & Licenses Needed to Open a Restaurant appeared first on Restaurant Accounting Services, Inc..

If you manage a restaurant, you already know how important shift scheduling is. But are your shift schedules working in the best interest of your staff and entire restaurant? Given the unique demands of scheduling shifts – after all, less than half of U.S. restaurant workers are full-time employees – it helps to understand how this underrated aspect of managing your restaurant can make or break your operation.

RASI’s complete restaurant accounting services help support your shift scheduling tasks, thanks to an innovative data analytics platform that provides timely information so you can make the best possible shift schedules.

Let’s look at common types of shift schedules, creative ways of scheduling shifts, and more.

Most Popular Types of Shift Schedules

Think of your shift schedules as a way to improve your restaurant’s performance. It’s getting the most out of your employees, ensuring you have enough resources to handle busy periods, and ultimately, improving customer services. Here are four common types of shift schedules:

Fixed Schedules

In today’s world of part-time restaurant employees, the fixed schedule – the same employees working the same weekly hours – is less common than it used to be. Fixed shift schedules are the easiest to track, but still must work in tandem with other random scheduling. To ensure your best employees are scheduled for optimal times, we recommend regular reviews of your fixed schedules. 

On-Call Shifts

Every restaurant manager has been there; a few waiters call off, or, the main cook has to leave work early, and you’re in a pinch. With the on-call variety of scheduling shifts, employees are able to fill in at a moment’s notice – often for premium pay. Probably the most challenging type of shift schedules, on-call shifts are hopefully rare. The fewer on-call shifts you have to plan, the more reliable your employees generally are.

Overtime Shifts

Scheduling shifts sometimes requires certain employees to log over 40 hours. The key is figuring out which workers can handle the extra workload while also staying within your local jurisdiction’s compliance and labor laws. Plus, OT can negatively impact EBITA, so we suggest a thorough assessment before committing to any overtime hours. A good question to ask: do you REALLY need OT, or will regular staffing – supplemented by top-performing employees – be enough to handle the extra work?

Rotating Shifts

Given the unique requirements of each individual employee, rotating scheduling shifts are sometimes necessary. In this instance, employees switch shifts, typically on a set cadence or schedule. In this case, for example, you might have two members of your wait staff switch their breakfast and dinner shifts on Tuesdays and Thursdays. This extra flexibility has the double benefit of accommodating your employees’ lives outside of work, while giving your establishment the versatility to meet customer demand.

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How Are Shift Schedules Created?

There are three generally accepted methods for scheduling shifts. Finding which one works for you helps ensure your operation reduces error, increases profits, and keeps your employees happy!

Pen and Paper Method

Are old-fashioned shift schedules best? For some old-school managers and shift schedulers, nothing beats this way. But it’s not recommended in today’s fast-paced environment, with so many factors to account for. Just one factor that pen & paper may not account for: employees missing shifts. 

Spreadsheets

Many restaurant managers swear by Excel, Numbers and other spreadsheets for scheduling shifts. While it’s more efficient than pen and paper, this method still doesn’t capture and integrate other information related to effective shift schedules. 

Plus, multiple spreadsheets mean a greater chance of errors. While spreadsheets promote accountability for your team, they’re still not effective as a robust, all-encompassing shift scheduling software.

Shift Scheduling Software

The best of all worlds – shift scheduling software enables seamless, automatic scheduling shifts for any type of restaurant. Best of all, you can access helpful tools and resources like compliance and overtime notifications, staff break alerts, and more!

Aside from our complete array of restaurant accounting services, we also work with a host of partners to meet the point solution needs of your restaurant. Request a demo.

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Every well run organization starts at the top. Sometimes, managers are brought in from another restaurant. And more often than you think, regular employees are promoted to manager.

But which restaurant management skills separate the good leaders from the great ones? What’s more critical – organization or people skills? And what tools or resources can help enhance the most important restaurant manager skills?

RASI can assist with honing and improving restaurant management skills – particularly in the field of full-service accounting applications and other business-friendly tools. We’re here to help any restaurant manager round out their skill set with the best support structure around. Let’s look at some common restaurant manager attributes and skills, how to refine the skills needed for a restaurant manager, and more!

Essential Attributes of a Great Restaurant Manager

Here’s a handful of characteristics every manager needs – learn and master these, and you’re on your way to perfecting all the skills needed for a restaurant manager!

1. Decisiveness. From deciding on the right supplier to making the latest shift schedules, all restaurant managers need to be decisive – yet fair at the same time. “The buck stops here” is a quality all effective leaders share, and a restaurant manager is no different.
   
2. Flexibility. Nothing ever stays still in the restaurant industry. Unexpected lunch and dinner rushes, prompt call-offs, challenging supply issues – you name it, restaurant managers deal with it. The ability to adjust on the fly, all while remaining calm in the center of the storm, defines all the best managers.
3. Professionalism. Everyone in the restaurant looks up to the manager. By having an aura of professionalism and authority, it’s easier to handle day-to-day responsibilities. Lead effectively, and your employees will follow.
4. Empathy. Don’t let professionalism take away the human touch. From disgruntled employees to angry customers, it always helps to empathize with a particular point of view. Empathy helps with conflict resolution, inspiring your team, and much more!
5. Honesty. Be a straight shooter – with employees and customers. Act with integrity at all times, whether you’re managing the books or working on employee relationships.

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Critical Restaurant Management Skills

An effective restaurant manager is the ultimate jack of all trades. Like a time-honored recipe, or your menu’s most popular item, it takes the right ingredients to make it work. Applying those skills to everyday management tasks is a good start. Here are just some of the things a manager is responsible for:

• Labor management – including payroll, shift scheduling, and the like. And don’t forget retaining the top talent!
• Ensuring a smooth supply chain – even the best customer service won’t fix a kitchen without the tools to succeed.
• Menu costing and control
• Inventory management
• Customer service – handling complaints, PR, etc.
• Compliance – all managers set the tone with integrity. This is critical, especially with ever-changing compliance laws & regulations.
• Handle the books – P&L statements, data analysis, cash management and more.

Building a Support System for Restaurant Management Skills

Aside from hiring the right people, the skills needed for a restaurant manager don’t stop with human interaction. It helps to have a complete support system in place for things like POS integration, data analytics, accounting, payroll and more. The bad news? There’s no single master class to master all of these areas at once.

The good news? RASI empowers restaurant managers with everything necessary to help round out any management skill set! One of our core focal points is to ensure that our clients have access to the best education possible to learn operational and accounting best practices that allow you to set attainable and realistic goals, tactics, and measurements for your teams. Like every capable restaurant manager, our services are also flexible, adaptable, and people-friendly!

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Request a demo today, or contact us to learn more! We’re here to help any restaurant manager win with the absolute best accounting platform you’ll find anywhere. 

The post 5 Important Restaurant Management Skills appeared first on Restaurant Accounting Services, Inc..

Getting a restaurant up and running is a challenge. Keeping a single establishment or franchise profitable over months and years is even more so. What separates the restaurants that quickly fail from those that have been established for an extended period?

Sales & Expenses
Point-of-sale (POS) Transactions
Financial Reporting
Accounts Payable & Cash Management
Taxes & Compliance
Inventory Management
Restaurant Accounting Formulas
Accounting Cycle
Payroll Processing for Accounting
Getting Started

You could argue – and we’d certainly agree – that taking advantage of a restaurant accounting software and service is the most significant single factor determining long-term success. As the leader in automated, expert accounting for the restaurant industry, RASI has put together an ultimate guide on restaurant accounting as an educational resource for you:

• Understanding the different types of accounting for restaurants
• Key factors to consider in restaurant accounting
• Determining efficient methods for cost analysis, accounting cycles, and more
• Grasping the importance of payroll for accounting in the restaurant industry
• And much more

With comprehensive and best-in-class restaurant accounting services, RASI can help any sized restaurant – from small, single eateries to nationwide franchises – make their accounting system work for them

Accounting in the restaurant industry generally falls into one of three categories:

• Software-based accounting system.
• Internal accounting practices – Controlled by a restaurant’s management team or financial personnel.
• Tech-enabled, cloud-based platforms – RASI’s restaurant accounting platform combines the best qualities of the first two methods. We offer our restaurants complete control using streamlined software paired with the expertise of compliant, continually updated accounting tools, resources, and a team providing continued education to ensure financial goals are met.

Before deciding which route to take with the accounting for your restaurants, you should determine your restaurant’s specific goals, factor in budgetary considerations (how much you’re willing to spend), and see if a 3rd-party solution is a good fit.

Let’s dive into the first important step – factors to consider when setting up your restaurant’s accounting system!

Accounting for Restaurants: Key Factors to Consider

Let’s lay the foundation for accounting in the restaurant industry; the following factors are essential for any operator to understand restaurant accounting. If you can grasp these ideas, it’ll make your decision that much easier for outsourcing!

Sales & Expenses: 

The two fundamental elements of any budget, sales, and expenses, ultimately help determine if your restaurant is profitable. Sales include food & merchandise sales, reward program revenue, and other similar transactions. Expenses, meanwhile, encompass any costs associated with running your restaurant: food, labor, taxes, accounts payable, rent, etc.

Point-of-sale (POS) Transactions:

POS transactions are recorded at the exact time and place they occur. These types of restaurant accounting transactions add up quickly, and it helps to have a POS integration system for any establishment with multiple locations, a merchandise portal, and other revenue streams that stream directly into your accounting system.

Financial Reporting:

Hitting your operational targets and creating a precise budget is paramount for success in the restaurant industry. This is only possible through streamlined financial reporting that spits out real-time data for operators to make timely business decisions based on facts and numbers.

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Accounts Payable & Cash Management:

What’s the current situation of your restaurant’s cash on hand? How about money coming in from accounts receivable or money going out for accounts payable? Increasing timeliness and accuracy surrounding your Accounts Payable helps you proactively manage your accounts payable and cash position. Figuring out how to track cash management is one of the more overlooked aspects of restaurant accounting; you should always have complete visibility into your cash flow to make more educated business decisions.

Taxes & Compliance:

You can’t forget about Uncle Sam here. When performing accounting for restaurants, it’s critical to factor in taxes and compliance. This category includes everything from wage garnishment to payroll tax returns to 401(k) reporting to industry legislation and regulations. Forgetting these factors can mean crippling penalties and fees in an already low-margin business.

Inventory Management:

Every chef strives to optimize their menu, but many don’t know where to begin. The basis for all effective menus begins with proper inventory management. Understanding the correlation between menu items and contributed sales, proper purchasing habits, and how inventory all affect the successful management of COGS can be overwhelming without a restaurant accounting platform that addresses each of these areas.

Restaurant Accounting Formulas:

For the diehard financial analysts and accounting geeks out there, the importance of knowing basic and advanced accounting formulas is hard to overstate. Check out our comprehensive formulas page for accounting in the restaurant industry – tons of helpful information in there!

The Accounting Cycle: Focus on Frequency

Regardless of what type of accounting for your restaurants you ultimately decide, here’s a recommendation on the most successful accounting cycle: weekly works best!

Some restaurants prefer to work on monthly accounting cycles, but we recommend the methodology of comparing apples to apples rather than apples to oranges. What does this mean? A monthly accounting system is an apple-to-oranges approach. The number of days within each month varies; each month begins and ends on a different day.

Within a thirteen 4-week period, or a 4-4-5 accounting cycle (for each quarter, the first financial period is the first four weeks, the second period is the following four weeks, and the third period is the final five weeks), you’re ensuring all your data is streamlined to compare apples to apples because you’ve consolidated your months/days into very specific periods.

Additionally, we recommend an across-the-board method of weekly restaurant accounting reviews for all your data so that all your revenue, costs, expenses, payroll, and other reporting is consistent every week, every year, for all your restaurants… apples to apples!

The Importance of Payroll Processing for Accounting in the Restaurant Industry

Transforming payroll processing from a necessary function into a tactical, operational tool is one of the most underrated aspects of strategic restaurant accounting. Accurate, efficient reporting is a necessity to master this strategy. For larger restaurants and franchises, in particular, having a restaurant accounting system with a built-in payroll platform keeps all your data streamlined.

Additionally, the game has completely changed for operators paying their people properly when it comes to payroll compliance. RASI provides best-in-class payroll features with a dedicated team who understands and maintains restaurant industry compliance with Local, State, and Federal Mandates, including Tip Credit, PTO, Regular Rate of Pay, and Surcharge in all states!

Controlling labor costs in this new environment will require a more strategic, compliant-based approach – Can you identify, down to the shift, where you are losing money in comparison with sales and recognize specific job codes that need adjustments to make the most profitable impact when creating schedules? Utilizing an outsourced restaurant bookkeeping, accounting and payroll platform can provide all these actionable insights and more!

Getting Started with Accounting for Your Restaurants

OK, it’s time to implement a restaurant accounting system. Now that you have a basic understanding of the building blocks and foundational concepts that drive accounting in the restaurant industry, you might be wondering how to get things up and running.

RASI works with various point solutions to ensure your back office has the tools and resources to handle the unique challenges associated with restaurant accounting. With a well-rounded solution, you can manage labor compliance, benefits administrators, lenders, marketing solutions, and more!

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We’re here to help get your restaurant accounting off the ground whenever you’re ready! Whether starting from scratch or needing a wholesale change to your outdated platform, RASI offers the best solutions that align with any budget. To get started, request a demo or send us your questions today!

The post Restaurant Accounting: A Complete Guide appeared first on Restaurant Accounting Services, Inc..

Colorado Retailer Retention of Sales Tax, bill HB22-1406, applies to Colorado sales taxes collected in July, August, and September of 2022. This bill allows a temporary deduction from state net taxable sales for restaurants, bars, and other eating places (food trucks), or catering services in the state. The temporary deduction from state taxable sales for qualifying retailers is equal to the lesser of state net taxable sales or $70,000 each month.  

What are the Details of the Colorado Retailer Retention of Sales Tax?

• Retailers will be able to keep the state sales tax collected on up to $70,000 of sales.
• If your sales for July, August, or September are $70,000 or less, you will be able to retain 100% of the state sales tax collected for those three months.
• Please do not forget that the business collects state and local sales taxes.
• Colorado state sales tax rate is 2.9%; on $70,000 of restaurant sales each month, the sales tax collected equates to $2,030.
• The restaurant would be able to retain this amount each month, for a grand total of $6,090—if the business had at least $70,000 in sales each month.  

Applicable Resource: https://leg.colorado.gov/bills/hb22-1406 

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How Does the Colorado Retailer Retention of Sales Tax Work?

• Colorado state and local sales taxes will continue to be debited from your bank account throughout the month according to the existing schedule.
• When the sales tax return is completed the following month, and the amount of sales tax due is calculated, a refund for sales tax you can retain will be credited back to your bank account.
• The amount refunded should be coded to your State COVID Grant GL, this amount is taxable income to the business.
• If you do not have a State COVID Grant GL, let your accountant know, and request the GL. 

How Can Restaurant Technology Assist With the Colorado Retailer Retention of Sales Tax?

When you work with a team of restaurant industry experts, like the RASI Compliance Team, we will ensure that the credit will automatically be taken for all restaurants to ensure our clients take advantage of this opportunity!

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Request your free demo today to learn more about gaining the benefits from working with a restaurant technology software and service to help your restaurant gain more profits!

The post Colorado Retailer Retention of Sales Tax & Your Restaurant appeared first on Restaurant Accounting Services, Inc..

Effective July 1, 2022, the state of Colorado will impose a retail delivery fee on all deliveries by motor vehicle to a location in Colorado, even if the delivery originates in a different state. 

What is the Colorado Retail Delivery Fee?

The retailer or marketplace facilitator that collects sales tax on taxable items delivered in Colorado, is liable to collect and remit the retail delivery fee. Therefore, if a third-party delivery service handles 100% of your deliveries and collects and remits the sales tax on all those deliveries, your business will not be liable to collect and remit the retail delivery fee.

In this scenario, when a third-party delivery service collects and remits sales tax on 100% of the business’ deliveries, that third-party is responsible for collecting and remitting the retail delivery fee.  

If your business handles the delivery of taxable items, and your business collects the sales tax on the delivered taxable items in Colorado, you need a retail delivery fee account to collect and pay the retail delivery fee. The retail delivery fee is an account separate from your sales and use tax account, so you will need to have both account types in this scenario.

As a courtesy, retailers with an active sales tax account, a retailer license, and any sales tax liability reported after January 1, 2021, will be automatically registered by the state of Colorado for a retail delivery fee account. There is no license required or registration fee due.  

About the Colorado Retail Delivery Fee Itself

• The retail delivery fee is collected state-wide, so it does not need to be separated by taxing jurisdiction and is $0.27 per delivery order. The retail delivery fee is imposed upon the purchaser and is collected when sales tax on the delivered taxable items is collected.  
• The retail delivery fee is also collected and remitted by a business that mails, ships, or otherwise delivers taxable items by motor vehicle to a purchaser in Colorado.  
• The retail delivery fee applies to both in-state and out-of-state retailers.  
• The retail delivery fee is remitted to the Colorado Department of Revenue.  
• Wholesale sales are not subject to the retail delivery fee. However, if a delivery by motor vehicle to a location in Colorado includes both items for resale (wholesale items) and goods subject to state sales or use tax, the seller must collect the retail delivery fee. 

For more details and FAQs on the Colordao Retail Delivery Fee, visit the Colorado Retail Delivery Fee website here: https://tax.colorado.gov/retail-delivery-fee   

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Questions to Help You Decide if the Colorado Retail Delivery Fee Needs to be Collected by Your Business: 

1) Does your business collect sales tax, or pay use tax, on taxable items that are delivered by motor vehicle in the state of Colorado?  

If your answer to this question is ‘YES,’ your business is responsible for collecting and remitting the retail delivery fee.  

If your answer to this question is ‘NO,’ your business may not be responsible for collecting and remitting the retail delivery fee. 

2) Does your business collect sales tax, or pay use tax, on some deliveries of taxable items and not on other deliveries of taxable items by motor vehicle in the state of Colorado?  

If your answer to this question is ‘YES,’ your business is responsible for collecting and remitting the retail delivery fee on the deliveries in which sales tax is collected and remitted by the restaurant, i.e., not collected by a third-party delivery service.  

The third-party delivery service would collect the retail delivery fee on the taxable items delivered when they are responsible for collecting the sales tax.  

If your answer to this question is ‘NO,’ your business may not be responsible for collecting and remitting the retail delivery fee. 

3) Does your business mail or ship taxable items using USPS/UPS/FedEx to locations within the state of Colorado and collect sales tax on those taxable items? 

If your answer to this question is ‘YES,’ your business is responsible for collecting and remitting the retail delivery fee on the deliveries in which sales tax is collected by the restaurant (and not collected by a third-party delivery service). 

If your answer to this question is ‘NO,’ and your answer to the prior two questions was also ‘NO,’ your business is not responsible for collecting and remitting the retail delivery fee. 

I am Required to Collect and Remit the Colorado Retail Delivery Fee, What Needs to be Done to Prepare? 

1) The retailer must list the fee as a separate item labeled “retail delivery fees” on the receipt or invoice issued to the purchaser. Clients that handle the delivery of food will need to set up the retail delivery fee to apply a one-time fee of $0.27 per delivery.  

2) Communicate the newly created POS charge to your accountant.

3) Provide your retail service fee account number to your accountant. 

4) Begin collecting the retail service fee of $0.27 on all deliveries made by motor vehicle in the state of Colorado on July 1, 2022, and thereafter.  

LISTEN TO THE FULL PODCAST EPISODE BELOW!

How can Restaurant Technology Help with the Colorado Retail Delivery Fee?

RASI’s knowledgeable compliance team stays up-to-date with the latest legislation and relays the information to both our clients and our tech team. This ensures that our software can adjust and comply to any new regulations that crop up – on state, federal, and local levels!

Request a Demo Today and learn how we can help protect your valuable assets, employees, stakeholders, and business!

The post Everything You Need to Know About the Colorado Retail Delivery Fee appeared first on Restaurant Accounting Services, Inc..

The Background on Payroll Compliance – What are some Current Issues?

Issue #1) Meal & Rest Period Requirements

Federal versus State Laws are entirely different regarding Meal & Rest Period Requirements. The variances in legislation confuse operators as they’re unsure which laws they need to follow. The penalties are hefty, and fines can range upwards of $1,000 per instance if an operator is not compliant. The penalties can add up quickly and cripple a business. California restaurants are at high risk of Meal & Rest Break compliance penalties because the state makes it easy for an employee to take action against an employer. Below we’ll review a few differences between Federal and State Laws within Meal & Rest Breaks.

Federal Law: Meal & Rest Compliance — Federal Law, does not require rest or meal periods

• • However, when employers offer short breaks (usually lasting about 5 to 20 minutes), federal law considers the breaks as compensable work hours. These hours should be included in the sum of hours worked during the workweek and considered in determining if overtime was worked
  • Meal periods (typically lasting at least 30 minutes) serve a different purpose than coffee or snack breaks and, thus, are not work time and are not compensable

State Law: Meal & Rest Compliance — Most states have Meal and Rest Period requirements for employees working shifts of certain lengths (AZ, ID, KS are a few of the only states that do not have Meal and Rest Period requirements)

• • A meal period is typically 30-minutes
    • A meal is usually due to employees after working 5-6 hours in a shift
    • If an employee is relieved from all duties, the 30-minute meal period can be unpaid
    • If an employee is not relieved from all duties, the entire break must be paid
    • An unpaid meal period does not count towards identifying whether an employee has worked enough hours to trigger overtime pay
      • This is because meal periods are generally uncompensated and do not count as time worked
    • When the nature of the business or other circumstances make an uninterrupted meal period impractical, employees are to be allowed to consume an on-duty meal while performing duties and be fully compensated for the on-duty meal period
      • Employees must be fully compensated for any on-duty meal period
  • A rest period is typically 10-minutes
    • A break is usually due to employees after working 2-3 hours in a shift
    • During the break, employees must be relieved from all duties
    • The rest period is paid whether relieved of all duties or not
    • Required rest periods are time worked for purposes of calculating minimum wage and overtime requirements

Issue #2)  Predictive Scheduling Laws

Predictive Scheduling Laws are popping up across the nation. They’re incredibly complex and have created mass amounts of confusion around the legalese used in regulations. Like Meal & Rest Break compliance, California restaurants are especially at risk regarding Predictive Scheduling Laws. Below are examples of specific legislation around scheduling requirements.

California “scheduling laws” that are not referred to as “scheduling laws” (but fall under the premium pay requirements for not complying with the law)

• • California requires Additional Premium Pay
    • An additional hour at minimum wage is due to employees when working a split shift
    • The requirement is that an employee earns at least minimum wage for all hours worked when there is a split shift, plus 1 hour of pay at minimum wage
  • Second shifts must be at least 2 hours in duration
    • If a second shift in one day is less than 2 hours in duration, the employee is due the difference between 2 hours and the actual shift length in hourly pay at the employee’s regular rate of pay
  • When an employee is scheduled to work and does report but is furnished less than half said employee’s scheduled day’s work, the employee is due half of the scheduled day’s work, but in no event for less than 2 hours nor more than 4 hours of pay, at the employee’s regular rate of pay
  • It is necessary to have records showing when the employee begins and ends each work period
    • Operators must record Meal periods, split shift intervals, and total daily hours worked

Predictive Scheduling Laws

• • At a high level, predictive scheduling requires employers to post work schedules in advance, generally 14 days
  • Some laws are more restrictive than others, with additional obligations for employers, including:
    • Communicating an estimate of how many hours a new hire can expect to work each week
    • Notifying employees of potential on-call shifts
    • Provide the opportunity to existing employees for more shifts before an employer hires a new worker
    • Payments to employees for schedule changes
  • Each jurisdiction handles predictive scheduling laws a bit differently
    • Cities that have predictive scheduling laws in place: Emeryville, CA; San Francisco; Seattle; New York City; Philly; Chicago
      • Example — Oregon Scheduling Laws:
        • Employers must give new employees a written good-faith estimate of their work schedule at the time of hire
        • A written work schedule is to be provided to employees at least 14 calendar days before the first day of the schedule
        • Employers and employees can request scheduling changes under certain conditions; however, employers must provide additional compensation for certain changes they request
        • Employers can’t schedule or require employees to work the first 10 hours following the end of the previous calendar day’s work shift or on-call shift
        • Employers must provide Additional compensation for schedule changes

Additional Payroll-Related Compliance Issues:

• Operators not paying overtime when an employee works over 40 hours in a week, or in some cases 8 and 12 hours in a day
• Not including service charges, commissions, or non-discretionary bonuses in the regular rate of pay
• Including BOH in tip-pool while at the same time taking a tip-credit on tipped employee’s wages
• Classifying an employee as a tipped employee because they receive a small amount of tips for a small portion of their job

RELATED: How to Record Tips in Accounting

The Solution – How To Make it Painless:

Working with a purpose-built restaurant compliance solution enables operators peace of mind that they’re always compliant with the law. RASI offers clients the security of knowing that proper rate of pay, overtime, meal, shift, and break compliance are properly and accurately tracked and reported!

The post Why You Shouldn’t Ignore Payroll Compliance & How To Make It Painless! appeared first on Restaurant Accounting Services, Inc..

At the same time, the Department’s regulation also stated that an employee employed in a tipped occupation may perform related duties that are not “themselves . . . directed toward producing tips.” Therefore, distinguishing between employees who have dual jobs and tipped employees who perform “related duties” that do not “themselves” produce tips.

The 80/20 guidance stated that if a tipped employee performs too many “related duties”, the employee is no longer engaged in a tipped occupation. Essentially stating that if an employee spends more than 20% of the workweek on non-tipped related duties, that employee is no longer engaged in a tip producing job function and must be paid the full minimum wage.

Why is the DOL changing the Dual Jobs regulation?

A change was needed to clarify the difference between an employee that truly has two jobs within the restaurant, one tipped and one non-tipped, and a tipped employee that performs different job duties throughout their shifts.

Secondly, the Department of Labor determined that the 80/20 guidance “was difficult for employers to administer and led to confusion, in part because employers lacked guidance to determine whether a particular non-tipped duty is `related’ to the tip-producing occupation.

There were circuit courts that also found the guidance difficult to interpret and inconsistent with the FLSA’s goal of promoting fair working conditions.

What does the Department of Labor hope to accomplish with this new rule?

The goal of this final rule is to protect tipped employees, while also providing clarity and flexibility to employers, and courts, to address the variable situations that arise in tipped occupations.

Does this new final rule apply to every restaurant in the country?

No, this is a federal rule and would not be impactful in all states.

For example, the states of Washington and California do not allow employers to pay employees a tip-credit wage, and employers must pay tipped employees and non-tipped employees the same minimum wage.

What is the new rule for Dual Jobs?

• If an employee has two jobs, one tipped and one non-tipped, the non-tipped job cannot be paid a tip-credit wage
  • The prior rule was not straightforward in regard to this situation
• In order for a tipped employee to be paid a tip-credit wage for their entire shift, that employee during their entire shift, is either performing work that produces tips or is performing work that directly supports the production of tips, provided that the directly supporting work is not performed for a substantial amount of time

WATCH THE FULL VIDEO BELOW!

What is considered “tip producing work”?

Tip-producing work is “work that provides service to customers for which tipped employees receive tips.”

What is considered “directly supporting work”?

Directly supporting work is “work that is either performed in preparation of, or otherwise assists, the tipped employee’s tip producing work.”

• Example: Dining room prep work – such as refilling salt and pepper shakers and ketchup bottles, rolling silverware, folding napkins, sweeping or vacuuming under tables in the dining area, and setting and bussing tables

The directly supporting work cannot be performed for a substantial amount of time.

What is considered a substantial amount of time?

An employee has performed directly supporting work for a substantial amount of time if the tipped employee’s directly supporting work either (1) exceeds 20 percent of the hours worked during the employee’s workweek or (2) is performed for a continuous period of time exceeding 30 minutes.

What happens if an employee exceeds 30 minutes of non Tip Credit work?

In this situation, the employer would not be able take a tip-credit for the entire 45 minutes in which the employee was rolling silverware and would need to pay the employee the full federal minimum wage for rolling silverware.

What are examples of work that is not tip producing or directly supporting tipped work?

• Preparing food, including salads, and cleaning the kitchen or bathrooms, is not part of the tipped occupation of a server
• Cleaning the dining room or bathroom is not part of the tipped occupation of a bartender

When is this Final Tip Rule effective?

The final rule becomes effective December 28, 2021.

LISTEN TO THE FULL PODCAST EPISODE BELOW!

RELATED: How to Record Tips in Accounting

The post The 2020 Tip Final Rule: Dual Jobs & 80/20 Guidance appeared first on Restaurant Accounting Services, Inc..

What are the recent updates announced by the DOL regarding protections for tipped employees?

The Consolidated Appropriations Act of 2018, which was enacted On March 23rd of 2018, amended the Fair Labor Standards Act (FLSA). The FLSA was amended to allow the department of labor to impose civil money penalties when employers keep employees’ tips, regardless of whether the violations were repeated or willful. Nonetheless, the Department of Labor published legal authority to the contrary. The 2020 Tip Final Rule allowed the civil money penalties to be applied only when the violation was repeated or willful. 

The 2020 Tip final rule was initially scheduled to go into effect on March 1, 2021. However, once the new administration took over, the Department of Labor delayed the effective date to April 30, 2021. Finally, the law was ultimately delayed with a new effective date of December 31, 2021.  

How was the Department of Labor able to create the 2020 Tip Final Rule with contrary views? 

The Consolidated Appropriations Act of 2018 granted statutory authority to the Department of Labor to create the 2020 Tip Final Rule as they determined to be “appropriate”. The law was interpreted in an unusual way.  

What additional tip protections did the Consolidated Appropriations Act of 2018 enact? 

The Act expressly prohibits employers/owners from keeping employees’ tips “for any purposes,” “regardless of whether or not the employer takes a tip credit.” Additionally, the Act prohibits employers from “allowing managers or supervisors to keep any portion of employees’ tips or participate in a tip-pool.”  

What specific updates did the Department of Labor recently announce? 

After their normal rule-making and comment period, the Department of Labor has withdrawn the provisions in the 2020 Tip Final Rule that allowed the department to assess civil money penalties only for violations that were repeated or willful.  

In the case of an employer, manager, or supervisor keeping an employee’s tips or participating in a tip pool, the Department of Labor will be able to assess civil money penalties for a first-time violation that was not willful. The fines are up to $1,162 per violation. The fine for a repeated or willful violation is $2,074 for each violation. In addition to the penalty for the violation, the tips withheld plus an equal amount would be due to the employee. 

The recent changes also provide clarification and examples of when a manager or supervisor is allowed to keep tips. 

What is considered “willful”? 

A “willful” violation occurs when the employer knew OR showed reckless disregard for whether its conduct was prohibited by the FLSA. An employer knew, for example, if they have received advice from an Agent of the Department of Labor to the effect that the conduct in question is not lawful. An employer shows reckless disregard when they fail to make an adequate inquiry about the conduct being compliant with the FLSA.  

These are statutory examples of willful and reckless disregard, all the facts and circumstances surrounding a violation would be considered when the Department of Labor gets involved. 

WATCH THE FULL VIDEO BELOW!

Does this impact restaurants that are allowed to retain a small percentage of credit card tips to cover the processing fee on those tips? 

Neither the 2020 Tip Final Rule nor the updates have an impact on the credit card fees charged to employees. The DOL Field Operations Handbook still contains the section regarding tips charged on credit cards and employer deducting the fees associated. Most states have a law that prohibits this practice.  

Do these updates apply to Service Charges? 

No, a mandatory charge for service, for example, 15% of the bill, is not a tip. Such charges are part of the employer’s gross receipts just like selling a hamburger for example, and sums distributed to employees from service charges cannot be counted as tips received and increase the regular rate of pay.  

Do the updates to the 2020 Tip Final Rule have examples of when a manager or supervisor may keep tips? 

The final rule clarifies that a manager or supervisor may keep tips only when the manager or supervisor receives tips directly from customers for service a manager or supervisor directly and “solely” provides.  

The final regulations reflect the reality that some managers or supervisors perform work for which they receive tips while ensuring that managers and supervisors do not keep any portion of other employees’ tips because if it is not plausible to attribute the tip earned solely to the manager or supervisor, then that tip does not belong to that manager or supervisor.  

Furthermore, an employer may allow a manager or supervisor to keep those tips, and may also require the manager or supervisor to share some portion of the tips with all other eligible employees. Take for example a manager or supervisor that fills in for a sick server and receives tips. The manager or supervisor should tip out the other employees the same way other servers do—bartender, busser, and food runner for example would still receive their fair share of the tips the manager or supervisor earned because their work did not change. If there are any additional tip pools that tipped employees contribute to, for example, a kitchen tip pool, the manager, or supervisor should contribute to the tip pool the same way other employees contribute.  

So, we know a manager or supervisor who serves her own tables may keep her own tips, for example. However, when a manager or supervisor simply runs food to a table for which a server is otherwise responsible, she may not keep any portion of the tip the customer leaves for the server, because that tip was not earned solely by the manager or supervisor. 

Can a manager or supervisor contribute to a tip pool? 

Yes, a manager or supervisor is always allowed to contribute to a tip pool but never allowed to receive tips from a tip pool, because any tip received from a tip pool could not have been solely earned by the manager or supervisor. 

When do the changes or updates to the 2020 Tip Final Rule go into effect? 

This final rule is effective November 23, 2021. 

 LISTEN TO THE FULL PODCAST EPISODE BELOW!

The post DOL Final Rule – Federal Protection for Tipped Employees appeared first on Restaurant Accounting Services, Inc..