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How Modern Restaurant Payroll Drives Growth & Employee Retention

Picture of Zachary Fagenson
Zachary Fagenson
Restaurant manager in kitchen
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In 2021 restaurants across the country paid their employees tens of billions of dollars, according to the Bureau of Labor Statistics. Those responsible for tracking, tabulating, and ultimately paying these vast sums have one of the industry’s most important and challenging jobs. While so much attention is rightly paid to how ingredients are delivered, prepared, and crafted into dishes, those in the back office processing payroll and other critical HR tasks hold just as much responsibility for each location, and the overall company’s, success 

Payroll is a challenging, complex process for all industries. Restaurants, which have a combination of salaried and various kinds of hourly employees, all governed by different regulations, face a massive administrative burden on back-office teams whose focus should be bolstering operations, improving guests’ experiences and helping the company grow. What growth-and-employee-focused operators need to succeed in today’s environment is a fully integrated restaurant-specific tool that meets the industry’s demands of restaurant payroll while providing employees a seamless, loyalty-driving experience that frees up accounting and HR teams.   

Such a system should have three key features: integration and automation, features that boost employees’ experience, and functionality that enables accounting and HR to power efficient growth.  

To create a seamless employee and manager payroll experience, the system should automatically pull pay details from the various labor systems they are often spread across. These may include scheduling systems, your POS, and your payroll software. An ideal system for restaurants will aggregate all of the data from these sources to pay employees via direct deposits while automatically adding a journal entry to the business’s general ledger. The system should, of course, automatically and correctly deduct and withhold all applicable taxes.   

Tip management is a unique feature that’s key for the restaurant industry and is often unavailable with most generic payroll solutions. Managers should be able to easily access a table view of polled labor punch data from the POS. This will allow them to see and adjust their employees’ tips while providing above-store managers a high-level view of all activity. This is especially important for operators that rely on tips to compensate their teams properly.  

 In addition to a solution that makes the process faster and more accurate from the back office and managers’ perspectives, a valuable restaurant payroll system should also consider employees’ points of view. It should offer mobile paystubs that can be easily accessed via a mobile app. It should also offer payment via popular consumer apps like Venmo, PayPal, and CashApp, or a payment card for the unbanked, who number in the millions. With an integrated, automated payroll system, operators can also offer employees the unique ability to receive their pay daily if they wish, a significant to help attract and retain team members during a lingering labor crunch.   

 Finally, today’s modern restaurants need a payroll system that provides HR and accounting an easy-to-use tool that runs daily payroll-related tasks faster, with greater confidence, while cooking up free time and data to help the business and employees improve.  

At its core, payroll is an accounting function. However, frequently, payroll is done outside of restaurant accounting software. If your restaurant uses separate payroll and accounting systems, you are left importing data back and forth, a manual process that can lead to errors or wasted time. If your restaurant group covers multiple EINs, your payroll and accounting team may spend significant time updating multiple instances.   

However, if your payroll and accounting solutions are fully integrated on the same system, including full POS integration, you can eliminate manual imports or manual data entry and increase accuracy. Automated labor accrual journal entries can streamline payroll processing and allow your team to spend time on more important strategic tasks, like staying up to date on compliance and regulations.