Food truck owners have plenty to do; order supplies, prepare dishes for the day, take customer orders, and more. With all this going on, it’s easy to forget important business needs like bookkeeping.
The best way to ensure your food truck’s success is with a comprehensive payroll system. Here are five reasons why you need one:
Automated Payroll
You probably don’t think much about how your electricity bill auto-pays or Netflix automatically plays the next episode, but this little automation makes your life easier. Likewise, automating food truck payroll systems can help your business save time and money.
Most food truck-only and mobile catering companies are micro-businesses that employ only a handful. Besides the founder/owner, they may have two or three regular employees and occasionally some 1099 contractors to help out. For these small businesses, full-service payroll services are:
- A great solution for running payroll.
- Keeping employment tax records and filings organized.
- Making it simple to pay workers based on performance.
In addition to reducing paperwork and saving time, automated payroll systems can reduce the likelihood of errors that could lead to costly penalties from the IRS or state taxation agencies. They keep up with changes in tax policy and can automatically calculate the correct withholding tax for each employee. This helps to prevent common mistakes such as missing deadlines, filing incorrect forms, and miscalculating deductions.
Time & Attendance
Many food truck owners need to pay more attention to some expenses that can quickly add up. The most obvious startup costs are the cost of the vehicle, ingredients, and labor. Other expenses can include licenses, permits, and insurance.
It would help if you also had a fast and reliable payment processor to accept customer payments. Many food truck operators use Square, an easy-to-use point of sale (POS) system that manages inventory and offers reporting and financial integration.
Finally, you’ll need to invest in a marketing plan to spread the word about your food truck and its schedule. Many successful food trucks rely on social media to inform their followers where and when they’ll be in town. They may also launch a website to provide more detailed information and encourage online ordering. This type of planning keeps operational costs under control and helps them turn a profit. Then, they can continue to grow their business without the high overhead of a brick-and-mortar restaurant.
Payroll Taxes
As a business owner, it’s important to track your cash flow. This includes the amount of money that leaves your business (expenses) and the amount that comes into it (sales).
Food truck startup costs can be hefty, so you must be on top of your finances. This is especially important if you’re seeking investments or other types of funding to grow your business.
You’ll also need to set up a legal structure for your business. For example, you may need a doing-business-as permit and a sales tax license.
You must also obtain a federal employer identification number, or EIN, for filing taxes and opening bank accounts. You can apply for an EIN online or through the IRS. If you have employees, you must ensure that you have the right payroll software that complies with your state’s laws. For instance, some states require that employers withhold income taxes and FICA contributions. Others have unique rules, such as how often paychecks must be issued and when taxes must be paid.
Employee Benefits
As inflation continues, many food service employees seek higher wages and benefits. This has put additional pressure on restaurants and even food truck owners.
The good news is that a food truck can offer a compact business structure with lower startup costs and overhead than a traditional restaurant. Food truck business owners can save on rental space, utilities, and building upkeep. Instead, they often face only a monthly vehicle payment, food inventory, and equipment expenses.
A food truck can also provide more flexibility with employee scheduling and locations. This can give employers more control over staffing and payroll processes as well.
As a new food business, there are other startup costs, such as a commercial driver’s license, a permit to operate in specific areas, insurance for the food truck, commercial auto, and business liability. It is also good to look into workers’ compensation insurance required in most states for employees. This insurance pays medical costs, lost wages, and disability coverage for employees injured at work.
Financial Reporting
Food trucks offer a unique combination of challenges and rewards. They require a lot of time because of shopping, prep, marketing, event booking, cleaning, truck maintenance, and accounting. As a result, it is not uncommon for food truck owners to work more than full-time.
To maximize profits, food truck owner must understand their business intimately. They must be able to forecast sales and identify all costs. For example, it is critical to know the true cost of each item on the menu and evaluate this cost regularly. This will allow owners to set realistic prices to drive sales.
In addition, the business must carefully consider its options when purchasing a vehicle. Leasing or purchasing can significantly impact startup costs and long-term profitability. Food truck owners should also prepare a cash flow projection and conduct a break-even analysis to determine the minimum revenue needed to cover all expenses. This information is vital for a successful business plan and to secure financing. Check out brisbane food trucks, if you are in Brisbane and looking for something special to taste tonight.
