To avoid losing money when working with 3rd-party delivery services, it is important to record the sales correctly in your POS system. While not all point of sale systems are pre-programmed to account for 3rd-party delivery, there are usually some steps you can take to program your POS to help with your monthly reconciliation.
We’ve put together a quick (2 minute) video to help ensure you aren’t overpaying in state sales tax and aren’t getting short-changed. You can also read the transcript below.
In this short video, I’m going to share some insights on how to make sure you’re not losing money when working with 3rd-party delivery services. Specifically, there are some important steps to take in programming your point of sale systems that will help with reconciling your accounts and ensuring you aren’t overpaying or getting short-changed.
Even if your business is not in a state where the 3rd-party is responsible for remitting sales tax, it will save you time and money to program your point of sale system to distinguish between 3rd-party orders from those made in-store. No matter who is responsible for remitting taxes, you still need to reconcile your accounts each month. This can be very time consuming if you don’t have 3rd-party sales separated in your internal reports.
Unfortunately, many point of sale systems aren’t set up to differentiate between an order placed in-store and one placed through the delivery services that your restaurant may be working with. All of your sales are simply lumped together. If your business is in a state where the 3rd-party is required to remit sales tax, this means you could end up double-paying the sales tax if you don’t separate out these orders. However, you can’t just mark these sales as “tax exempt” when they are entered into your system, because then the order won’t be taxed. So, it’s important to program your system to distinguish between 3rd-party orders and in-store purchases.
Ideally, you can create distinctions in your point of sale between the different 3rd-parties that you work with. This will make it easier to compare your records with the reports provided by each service and identify any discrepancies. But if you can’t separate out each individual service, even making a basic distinction will help with reconciliation. One possibility is making “3rd-party delivery” a separate type of tender in your system.
Finally, keep in mind that because the 3rd-party delivery services take a commission off your normal menu prices, it’s very important that you factor that cost into the prices listed on their app. If you aren’t adding 20 percent to those prices, then you’ll be losing money on 3rd-party sales. And if you don’t distinguish between 3rd-party sales and in-store sales in your system, your accounting will be increasingly difficult to reconcile.
In our next video, we’ll discuss the process of reconciliation and accessing 3rd-party delivery service reports. We’ll share some tips on how to ensure you’re not overpaying and how to keep an eye out for theft.
If reconciling your accounts has been challenging, or if you haven’t been consistent about reconciliation, we’d love to discuss how OnePoint might help. Reach out today to speak with one of our experienced account managers about OnePoints accounting services.
September 2022
