Q My CPA never seems to be working with the correct net sales figures. How can we solve this problem?
A At tax time, there’s one daily number on which the owner and the accountant must always agree: net
sales. This figure, usually generated through the POS
system, serves as a measurement tool for daily food costs,
labor costs and other metrics. The problem is, the POS
system is usually configured to generate the net sales calculation without any input from the accountant. This
needs to change!
I’ve witnessed technicians from POS companies give
rather dubious tax advice to owners, which can result in
problems later. When it comes to understanding how
certain transactions on your POS system—such as voids,
employee meals and coupons—affect your taxes and net
sales, don’t listen to anyone but your accountant. You
need an accurate net sales figure to make important
decisions every day, and your CPA needs it to keep the
restaurant in good standing with the IRS.
A reliable net sales calculation method needs to be
worked out between the owner and the CPA. Meet with
your CPA as soon as possible and reach an agreement on
how your net sales will be calculated. The number given to
your accountant should match the number generated by
your POS system so that, when you receive your monthly/
annual financial statement, there won’t be a penny’s dif-
ference. Make sure your accountant has the ability to
receive electronically, on a secure, uninterrupted basis, the
net sales figures directly from your POS system. Explain
any of your store’s unique nonpayment methods, such as
house accounts, discounts, voids and special promotions,
and make sure you understand how these are taxed in
your state. Every state has different rules!
Finally, be aware that taxing agencies have gotten wise
to operators’ efforts to manipulate their POS systems and
fudge the numbers. In some states, the courts have even
allowed taxing agencies to subpoena electronic data from
POS systems to uncover inconsistencies.
Bottom line: The net sales calculation is used in most
decisions a restaurant owner has to make, and it’s also
a crucial piece of information for the accountant. The
owner and accountant need to work together—it can be
an unusual and possibly uncomfortable left brain/right
brain encounter, but it’s necessary.
ACCOUNTING FOR YOUR MONEY
Michael J. Rasmussen is the owner of Rasmussen Tax Group ( rasmussentaxgroup.com) in
Conway, Arkansas. He is also the co-owner of Eyenalyze ( eyenalyze.com), a company that
provides real-time profit analysis for restaurant owners.
When trying to understand how some POS
transactions—such as voids and employee
meals—affect your net sales, don’t listen to
anyone but your accountant.
By Michael J. Rasmussen