Introduction

This case study highlights the transformation of a New York-based restaurant and Quick-Service Restaurant (QSR) Client's Financial Operations, starting from June 2016. The Client initially operated under a single brand, Dunkin, with 15 operational stores. Over the years, the client expanded its portfolio to include five brands: Dunkin, Taco, Wendy's, Wingstop and Gyro, reaching a total of 42+ stores. The Client sought accounting services to enhance efficiency, reduce operational costs, and implement robust financial controls along with detail reportings.

The Initial Challenges

When our accounting services began in June 2016, the client faced several operational challenges:

• Prolonged Month-End Closing: The Client used to close their books of accounts 40–45 days after the end of each month.
• Lack of Cash Control: There was no effective control over daily cash collection and deposits, which posed a risk of revenue loss.
• Third-Party Reconciliation: The Client had no reconciliation processes in place for third-party transactions, including credit card merchants, American Express, Visa, gift cards, and third-party delivery partners. This lack of control resulted in potential revenue leakage.
• No consistency in accounting and finance manpower and high attrition.

The Transformation Process

a. Accelerated Month-End Closing

• We streamlined the accounting process, reducing the month-end closing cycle from 40–45 days to just 15 days from the month-end.

b. Cash Control Implementation

• Daily deposit verifications were initiated to ensure daily cash collection was accurately matched with deposits.
• Daily deposit reports were provided to management, enhancing transparency and control over cash management.
• Measures were taken to mitigate revenue leakages, including identifying discrepancies in daily cash handling and deposits along with routine petty cash expenses.

c. Third-Party Reconciliation

• Robust reconciliation processes were established for all third-party transactions, including credit card merchants (Visa, MasterCard, etc.), American Express, gift cards, and third-party delivery partners(DoorDash,Ubereat,Grubhub).
• These reconciliations ensured that all transactions were accounted for accurately and that bank charges were validated against actual receipts.
• Revenue leakages were identified and rectified, leading to cost savings.
• Commission costs related to third-party transactions were brought in line with industry trends, resulting in additional cost savings.

d. Loomis Reconciliation and Cash Logistics Control

• We also implemented a detailed Loomis reconciliation process to strengthen cash logistics and deposit tracking across all store locations.
• Daily cash pickups and deposits handled through Loomis were reconciled against POS sales, bank deposits, and store-level cash reports.
• Revenue leakages were identified and rectified, leading to cost savings.
• This helped identify discrepancies, delayed deposits, cash variances, and prevented revenue leakages, while also ensuring strong controls against teeming and lading practices in cash management operations.

Results Achieved — Operational Accounting Cost Reduction

Through effective financial management, streamlined processes, and stringent controls, our accounting services have played a pivotal role in transforming our client's restaurant and QSR business. Over the years, we have facilitated their expansion, reduced operational costs, and ensured that financial controls are in place to safeguard revenue and assets. Our client now operates efficiently, with enhanced financial transparency and profitability across multiple brands and stores. This contributed to a 50–55% reduction in operational accounting costs.

Specialized Reporting and Key Performance Indicators (KPIs)

To provide our Client with a comprehensive understanding of their business performance and real value, we have designed specialized reporting, KPIs, and business matrices. These tools offer valuable insights and enable informed decision-making on a monthly basis. Here are some of the key elements:

• Key Performance Indicators (KPIs): We have identified and tracked KPIs crucial to the restaurant Efficiency and Cost Savings.
• Customized Reports: Our team generates customized reports tailored to the Client's specific needs, ensuring that they have access to the data most relevant to their business.
• Employer Cost Savings: By managing all accounting and financial processes in our office, the Client can save significantly on employer costs. They only need to appoint a coordinator to liaise with our team for document submissions and reporting. This approach reduces the need to recruit and maintain an in-house accounting team, saving the client both time and money.

Revenue Reporting and Comparative Analysis

Our specialized reporting, KPIs, and business matrices empower our client to make data-driven decisions and gain a comprehensive understanding of their business performance. By centralizing accounting functions in our office, we help the Client save on employer costs, allowing them to focus on their core operations and strategic growth. Our monthly revenue reports provide actionable insights, facilitating continuous improvement and informed decision-making to enhance profitability and competitiveness in the restaurant and QSR industry.

• Sales Growth: Monthly and Year-to-Date (YTD) sales performance compared to the previous year.
• Food Cost Percentage: Monitoring the cost of goods sold (COGS) relative to sales.
• Labour Cost Percentage: Calculating labour expenses as a percentage of sales.
• Transaction Count: Tracking the number of transactions to gauge customer traffic.
• Average Ticket Value: Analysing the average amount spent per transaction, a key driver of revenue.
• Business Matrices: In addition to KPIs, we provide business matrices that offer a holistic view of the client's operations. These matrices allow for in-depth analysis of financial and operational aspects of the business.