Restaurant owners have a lot to do to manage a restaurant and stay profitable. Marketing, ordering, inventory, menu management, staffing, and back office functions all put pressure on restaurant owners every day. One way to streamline your financial management is by automating sales tax, a task that requires a lot of detail and discipline. Sales tax is a great process to automate with your restaurant point of sale system (POS) and save yourself time, stress, and worry.
Why Sales Tax Matters
Unpaid sales tax can result in penalties and fines for restaurant owners, and they can be held personally liable for any unpaid balances. Understanding sales tax obligations is crucial to stay compliant and avoid legal and financial consequences. Sales tax compliance is critical, and automation can help restaurant owners avoid risk and stay compliant.
Penalties and fines
Ignoring the significance of sales tax in your restaurant’s operations can lead to severe penalties and fines. The long term risks of not paying sales tax add up quickly. For one, the penalty and interest that is charged on non-paid balances can be between 5%-50% of the balance due. If you fall too far behind, the State may decide to place a lien on your business which creates a host of financial problems, like getting a loan.
Audits
As a restaurant owner, understanding your liability for sales tax is crucial. If your establishment offers take-out options or digital kitchen services or even operates remotely on platforms like UberEats or DoorDash, you may be obligated to register and collect sales tax. No business wants to undergo a sales tax audit. Substantial financial burdens often follow such audits if a business hasn’t been diligent about collecting and remitting proper sales taxes.
Sales Tax Automation: How it Works
Sales tax automation, powered by DAVO by Avalara, is built into every Table Needs subscription. DAVO tracks daily sales tax, sets aside funds, and ensures on-time and accurate payment when sales tax is due. Set-up is seamless and can be done in just a few minutes. Sales tax automation works by:
- Tracking daily sales tax
Using data directly from your POS, sales tax automation keeps track of the sales tax collected daily.
- Sets aside funds daily
The funds collected that day are then set aside in a secure, separate account. This ensures sales tax collected is never mistaken for cash on hand and available for spending.
- Pays and files on-time and in full
When the sales tax is due, DAVO files the return and pays the amount owed..
With restaurant sales tax automation powered by DAVO, the sales tax process becomes seamless and efficient. The system eliminates the need for manual sales tax cash management and misspending of funds that ultimately belong to the State. Sales tax becomes far less burdensome, giving you more time to focus on other aspects of running a successful restaurant business.
Benefits of Sales Tax Automation
Sales tax automation provides restaurant owners with more time to focus on growing their business, eliminates the stress and worry of managing taxes, enables discounts in certain states, and ensures that funds are always available when sales tax is due.
More time to focus on growing your business
Automating your restaurant sales tax can give you more time and freedom to focus on growing your business. Instead of spending your time manually tracking and remitting sales tax, automation software handles every step for you. This means you can redirect your energy towards revenue-generating activities like menu planning, improving customer service, or exploring new marketing strategies.
Eliminate time, risks, stress, and worry
Sales tax automation for restaurants can be a game-changer when managing the complexities of sales tax management. By automating the process, you can reduce risks of errors or missed payments, and alleviate the stress and worry that often come with handling tax responsibilities. That means timely payment of taxes, avoiding penalties for late payments, and continuous attention paid to your tax compliance without adding extra burden on your plate.
Discounts in some areas
One of the benefits restaurant owners can enjoy with sales tax automation is the opportunity to receive on-time filing discounts in certain states. That means that not only will you streamline your tax compliance processes, but you may also be able to save some money along the way. With sales tax automation, you can ensure timely payments while reaping the rewards of potential discounts, ultimately helping to boost your bottom line.
Always have the funds when sales tax is due
One of the key benefits of utilizing restaurant sales tax automation is that it ensures you always have the funds available when sales tax is due. It can be easy to mistake sales tax collected for available cash on hand without a system in place to manage that cash flow. That helps you avoid penalties and fines for late or incomplete payments and gives you peace of mind knowing that your business complies with all sales tax requirements.
Enable DAVO Sales Tax in Your Table Needs Subscription
DAVO Sales Tax is an automated sales tax solution available with each Table Needs subscription. With DAVO, you can eliminate the stress and worry of scrambling to come up with the necessary funds when it’s time to pay. With just a few minutes of setup, your sales tax process, filing, and payments are on autopilot. Give it a try and see how much time and hassle you can save.
Follow us for tips, news, and tutorials to run a successful small restaurant.
