Margins are tightening across the industry right now. Inflation keeps pushing costs higher. Labor is more expensive, and the competition never lets up. Industry forecasts warn that up to 30% of restaurants could close in the next few years without stronger operational fundamentals.
I’ve seen firsthand what happens when a restaurant tries to grow from a handful of units to twenty or more without the right foundation. Early on, a family accountant and handwritten checks might keep the lights on.
But as locations multiply, the risks compound: manual systems create bottlenecks, banks demand GAAP reporting, and small mistakes carry bigger consequences.
Every jump in unit count requires sharper systems and a finance team built to support growth.
Early-stage operators feel every change in food and labor costs. At this size, you are likely running a tight, relationship-driven operation. Most operators at this stage use cash-basis accounting, where your period-by-period books match your tax reporting.
Running up to five units means you are deep in the day-to-day. The finance side stays informal. I often see this managed by a brother-in-law, a partner, or a trusted tax accountant.
This arrangement works initially, but problems emerge as you scale. Your tax accountant might handle five restaurants comfortably, but once you hit ten, the recurring needs of the business begin to conflict with their tax work, and the volume becomes too much. At this stage, your goal isn’t fancy reporting; it’s staying out of trouble and knowing your cash position.
QuickBooks Online paired with a basic accounts payable tool works for most early operators. A warning: get the starting point wrong, and you’ll pay for it later.
Restaurant365 may feel premature, but starting with restaurant-specific software prevents a costly migration at ten units.
Most operators at this size do not need CFO-level support. GSS brings more advanced tech and process improvements early, so your business doesn’t stall when you open unit six.
Between six and fourteen units, things get more complex quickly. Suddenly, weekly reporting and location-level profitability analysis matter as much as daily sales counts. You need to forecast labor, control prime costs, and support financing for new stores.
The biggest risk now is inefficiency. If your systems aren’t integrated, you’re operating without visibility, which creates opportunities for theft.
When the general ledger and point of sale aren’t connected, fraud becomes much easier because someone can change what enters the ledger compared to what happened at the register. Without integration, someone can easily get in and change what goes into the general ledger versus what actually happened in the point of sale.
Restaurant365 works at this stage because it connects to most POS systems in the market. This integration links sales data directly to financials, reducing manual errors and fraud risk.
You also need to move away from manual checks. You want a payment system connected directly to the accounting system; Restaurant365 has that built in. The more you automate, the less time your team spends on busywork.
This is usually where you shift from one accountant to an actual team. A typical structure we see includes a Controller with one or two accountants.
At this stage, a full-time CFO is usually an unnecessary cost. But you still need CFO-level insights. We provide those insights: weekly forecasting, debt-readiness support, and controller-level guidance. No executive salary required.
At fifteen units and beyond, the stakes change entirely. Growth brings debt, compliance, and the constant need for sharper insights. Managing $5M to $10M or more in bank debt is now common.
Lenders expect quarterly GAAP financials, not just tax books. If your finance team cannot keep up, you risk defaulting on reporting requirements or losing credibility with the bank.
Technology gaps at this stage slow down reporting and drive away talent. I recall working with a group that was using an old virtual private network setup where staff had to log in to a remote desktop. The system would crash, and simple tasks took three times as long.
The result was retention issues. We had a hard time retaining accounting staff doing that work because nobody wants to struggle with inefficient tools. Modernizing your tech stack keeps your team from burning out.
You need a CFO to handle debt refinancing and strategic planning. A strong finance partner does more than accounting. We step in to deliver CFO-level strategy, scenario planning, and credibility with banks.
Our team handles AP automation and tech optimization, freeing your internal leadership to focus on scaling to thirty, fifty, or more units.
Success requires the right people, processes, and technology in place before you need them.
Growth becomes the requirement. Without it, you can’t maintain your position.
In an inflationary market, maintaining your current position means losing ground. Restaurants that invest early in financial systems avoid the chaos of manual workarounds and compliance failures.
If you’re ready to build your finance function for the next stage, reach out to learn how GSS can help.
