In 2020, every restaurant should have a digital tipping solution in place. Check out our quick guide to digital tip payout solutions.
Continue reading[Updated for 2023] 7 Reasons Why You Need a Digital Tipping Solution
Understanding Service Charges for Restaurant Owners
Service charges, a customary practice in numerous industries, have become far more common in the cost-intensive, low-margin restaurant business in recent years.
A service charge is a fee added to a customer’s bill to cover various aspects of service on top of the cost of goods (i.e., food and beverage). Service charges can serve multiple purposes depending on the restaurant’s policies, from supplementing staff wages to offsetting operational costs.
While service charges are legal, they’re often misunderstood — and somewhat controversial. Diners don’t love being surprised at the end of a meal with an unexpected fee — especially if it’s not clear what the fee is actually for or where it’s going. Many assume it’s a tip (it’s not!), which can negatively impact employees’ take-home pay.
While service charges can be useful for operators who are fighting an uphill battle against inflation or staffing issues, it’s critical to understand exactly what a service charge is (and isn’t), how to implement one, and what to consider when it comes to compliance and reporting.
What is a service charge in the restaurant industry?
In the restaurant industry, a service charge is a mandatory fee that gets added to a customer’s bill. This fee is typically a fixed percentage of the total bill amount and often ranges from 10% to 20%.
It’s important to note that a service charge is not a tip or a gratuity, which are voluntary amounts left by customers in appreciation for service provided. Instead, a service charge is a mandatory charge, often used to cover the costs associated with providing the service, such as staff wages, maintenance, or administrative costs. These charges are common practice in many restaurants, particularly in fine dining or restaurants with large numbers of staff.
As Beth Schroeder of Raines Feldman LLP explained in her recent Hot Tips & Takes interview, the proceeds of service charges are the property of the restaurant to do with as management sees fit.
Service charges for restaurant owners can help to:
- Compensate for staff expenses: One of the primary reasons many restaurants implement a service charge is to help cover staff salaries and benefits. While tips can often supplement these costs, they are not always reliable and can fluctuate greatly. Service charges provide a more consistent and reliable revenue stream, ensuring that restaurant staff are compensated fairly for their work.
- Maintain high service standards: Service charges can also be seen as a reflection of the superior service offered by the establishment, as they’re often found in high-end restaurants where exceptional service is part of the dining experience. Funds generated through service charges can be used to invest in training and development programs for the staff, helping to maintain high service standards.
- Balance food costs and pricing: Implementing a service charge can help balance the cost of high-quality ingredients with competitive pricing for the customers. Restaurants operating in a higher price range often use premium ingredients, and a service charge helps offset these costs without needing to increase menu prices significantly.
- Share tips equitably among staff: In many establishments, tips are shared among the service staff only. By implementing a service charge, restaurants can ensure a more equitable distribution of tips among all staff members.
- Offset the cost of bottle service: For restaurants offering bottle service, the associated costs can be substantial. This service often involves premium liquors and additional staff to cater to the table. By applying a service charge, restaurants can help offset these costs.
- Facilitate large group payments: Service charges are particularly advantageous when catering to large groups or events, such as banquets or parties. A preset service charge can ensure that the staff is equitably compensated for their time and effort and that costs associated with special decorations or other incidentals are covered.
- Address split meal charges: When large parties dine together and split bills, it creates additional work for service staff. A fixed service charge helps compensate for this increased workload.
- Accommodate delivery fees: One last case where service charges are common is in covering delivery fees. As food delivery has gotten more popular, restaurants have had to bear the cost of partnering with food delivery platforms. These platforms charge a significant percentage of the order total as their fee. By incorporating a service charge, restaurants can manage these expenses without having to compromise on the price or quality of their food.
What’s the difference between a service charge and a tip or gratuity?
While this can be confusing to diners, service charges and tips/gratuities are not the same. The key differences between a service charge and a gratuity:
- Service charges are compulsory. Service charges are mandatory and non-negotiable. Tips, on the other hand, are not required. Yes, they’re often expected — and many hospitality employees rely on them to increase take-home pay — but ultimately, tips are discretionary and generally based on the quality of the meal and service.
- Service charges are a set percentage of the bill. A service charge is a fixed percentage of the total cost of a meal as determined by the employer; it generally ranges from 10-20% of the bill. With tips or gratuities, while 15-20% is a customary percentage of the bill, the amount is completely up to the customer.
- Service charges belong to the employer. Service charges can be used to increase staff wages, but ultimately, it’s the employer’s call as to where those funds go; operators might choose to use a service charge to offset other costs of doing business. Tips, on the other hand, belong solely to employees. Employers can implement tip pools or tip shares to distribute tips more equitably among employees, but it’s illegal for them to keep any portion of tips from any employee.
- Service charges are categorized differently by the IRS. When a service charge is used to increase employee compensation, it’s still not considered a tip. It must be reported as a “non-tip” wage.
Tipping on top of service charges
It’s important to understand that tipping is also still typically expected on top of the service fee.
Again, though a service charge can contribute to the staff’s wages, that’s not always the case. Employers might use service charges for other costs of doing business. When this happens, “service charge” is a bit of a misnomer; that is, customers may (reasonably!) assume that the fee is going to the person or people who provided the service. As a result, customers might be less inclined to leave a tip.
That’s why it’s important for employers to clearly communicate to both customers and employees how the service charge is being used. If it’s unclear, and the charge isn’t being used to increase compensation, it’s likely that employees will miss out on tips. .
What is an automatic gratuity or auto-gratuity?
Automatic gratuities are service charges, not tips or gratuities. (Confusing, right?)
Automatic gratuities or auto-gratuities are perhaps even more of a misnomer than “service charge” — in fact, some legal professionals advise employers to avoid using the term altogether.
Here again, customers will often assume that their service provider is the recipient of the automatic gratuity (and choose not to leave a tip on top of the auto-grat). Because auto-gratuities are service charges, they belong to the employer. While they can be brought in as non-tip wages for employees, they can also be used for other operating expense.
How service charges impact restaurant employees
Service charges have a significant impact on restaurant employees, affecting their overall income, the perceived value of their work, and job satisfaction. Here are some of the ways service charges influence employees:
- Income Structure: When paid to the employee, service charges can provide more stable income for employees because they don’t fluctuate like tips.
- Pay Distribution: When they’re distributed, service charges are usually divided amongst all staff, including non-tipping positions such as cooks and dishwashers. This can lead to a fairer distribution of income.
- Reduced tip earnings: This may not be problematic if service charges are being paid to the employee. However, as noted above, customers might be less inclined to tip on top of a service charge, which can hurt employees who rely on tips as a significant portion of their wages.
- Motivation and performance: Given the compulsory nature of service charges, some employees might feel less motivated to provide excellent service, as their earnings are not directly tied to their service quality. On the other hand, it might also alleviate some pressure, allowing employees to focus on providing consistent service without the stress of variable tips.
If a service charge is primarily used for fair wage distribution among employees, it can have significant implications on their wages and tips. This practice can ensure a more equitable wage structure, especially in establishments where behind-the-scenes staff, such as cooks and dishwashers, typically do not receive tips.
Using the service charge for paying employees can bring a sense of fairness and stability to restaurant wage structures, but it also requires clear communication and understanding from both employees and customers to function effectively..
How service charges impact restaurant customers
Service charges offer several benefits to restaurant owners and staff, but also have implications for the customers. These include:
- Reduced tipping: Customers may believe a service charge is a substitute for a tip and reduce or eliminate their gratuity. Customers may also feel that a mandatory service fee reduces their control over rewarding good service, traditionally reflected through their tip.
- Surprise costs: Customers unaware of a service charge may be surprised or frustrated when they receive the bill. This could be perceived as hidden costs, which might impact their overall dining experience negatively.
- Increased scrutiny of service quality: Knowing that a service charge will be added to their bill, customers might scrutinize the quality of service provided more closely, with customers more likely to be upset by any small lapse in service.
Potential impacts of service charges highlight the importance of clear communication and excellent service, ensuring customers understand the purpose of the service charge and feel it justifies the quality of their dining experience.
Is implementing a service charge worth it?
Implementation of a service charge can have significant implications for a restaurant’s revenue. From a financial perspective, a service charge can lead to a more predictable revenue stream. Unlike tips, which are subject to variability, service charges are fixed and therefore ensure a consistent addition to the restaurant’s revenue.
However, the success of implementing a service charge largely depends on how it’s perceived by customers and employees. If customers feel that the service charge doesn’t correlate with the quality of service, or if it significantly increases their total bill, they might reconsider their dining choice, potentially leading to a reduction in customer frequency and ultimately affecting the restaurant’s revenue.
On the other hand, if service charges are used to ensure fair wage distribution and provide a stable income for employees, it can foster a more satisfied and motivated workforce. This can indirectly contribute to the restaurant’s revenue by reducing employee turnover, enhancing service quality and efficiency, and creating a positive dining environment that attracts and retains customers.
How to collect a service charge at your restaurant
The general process for handling service charges is as follows:
- Determine how much you will charge: A service charge typically ranges from 10% to 20% of the total bill but can vary based on the restaurant’s specific requirements.
- Determine how you will spend the funds: The service charge can either be retained by a restaurant or distributed among employees.
- Inform and train staff: Staff should be informed of how the service fees will be used, how it impacts their income, and how it benefits the restaurant. Proper training should be given to employees, particularly those interacting with customers, to effectively communicate the purpose of the service charge and address any customer questions or concerns.
- Create clear communication with customers: Customers should be informed about the service charge before they place their order. This can be conveyed through signage at the restaurant, communicated verbally by servers, or noted on menus.
- Implement the charge: Once all of the above steps are completed, you can start levying the service charge on customer bills. This will involve updating your point of sale system and ensuring all staff are trained to handle the new billing system.
- Distribute proceeds accordingly: Once you start collecting service charges, proceeds should be distributed to qualified staff members based on your policy. This is something that Kickfin can help with, if you don’t have the ability to cashlessly distribute tips and charges,
- Ensure accurate reporting: Follow IRS guidelines for recordkeeping and reporting. When paid to employees, service charges should be treated as non-tip wages and are subject to social security tax, Medicare tax and federal income tax withholding.Employers can’t use these non-tip wages when computing the tip credit available to employers because these amounts aren’t tips.
- Monitor and adjust: After implementing a service charge, be sure to monitor its impact on both restaurant revenue and customer satisfaction. Gathering feedback from customers and staff to identify issues or areas of improvement.
Remember too that it’s crucial that your restaurant remain compliant with local labor and tax laws when implementing a service charge system. This includes understanding how service charges are taxed and how they impact wage calculations. Laws can vary by location, so consult with a legal expert or your local government to clarify any uncertainties and avoid potential legal issues.
How Kickfin can help
Kickfin offers an efficient and streamlined solution for managing tips in your restaurant. Our platform allows you to easily implement, track, and adjust your tipping system, ensuring a hassle-free experience for both your staff and customers.
Kickfin is also designed to be compliant with local labor and tax laws, helping you stay within legal bounds when implementing tips for your restaurant.
To hear more about how Kickfin can help you manage and distribute tips, sign up for a demo with one of our in-house experts.
10 Restaurant Management Tips for Your Business
Running a successful restaurant requires juggling staff, food quality, customer service, finances…the list goes on (and on). Whether you’re a seasoned restaurateur or a management newbie, implementing effective restaurant management strategies is crucial to the success of your restaurant, team and bottom line.
Chances are, you’re already doing a lot of these things — but it’s never a bad idea to revisit your restaurant management approach and make sure you’re covering all your bases.
Here are 10 restaurant management tips to help you navigate the restaurant industry, boost efficiency, and take your business to the next level.
1. Invest in restaurant technology
Your tech stack impacts every aspect of your approach to restaurant management.
The standard restaurant tech stack has changed in recent years — and it continues to evolve as new innovations roll out. Here are some essential tech tools every restaurant owner should consider leveraging:
- Point of sale (POS) system: We know, we know…a POS is table stakes. But there are a ton of options out there — and if you haven’t done so lately, it could be worth revisiting your current POS to make sure it’s checking all your boxes. An advanced POS system goes beyond processing transactions. It can track sales, organize menu items, manage staff, and offer detailed reports to aid in business planning.
- Inventory management software: Our motto: Automate what you can — and that includes inventory management. Accurate inventory tracking reduces waste and helps boost profits. Inventory management software helps you keep track of what’s in stock in real-time, predicting what you need to reorder and when.
- Payroll software: A good payroll system simplifies the complicated task of managing staff wages, benefits, and tax deductions. It automates calculations, reducing the chance of errors and ensuring your staff is paid correctly and on time.
- Tip management software: If you’re still paying out credit card tips in cash, it’s time to hit the “easy” button. Tip pooling and distribution software can be run as a standalone system or integrated with your POS to calculate and distribute (cashless!) tips instantly to your employees’ bank of choice. That means no more bank runs, a lot more visibility into tip payments for easier reporting — oh, and happier employees. (Sign up for a demo to hear more from one of our experts about what we do and how it can help you.)
- Reservation and online ordering system: In today’s digital age, an online reservation and ordering system is non-negotiable. It allows customers to make reservations or order food online, improving their dining experience and boosting your bottom line.
- Customer relationship management (CRM) system: Sometimes, leaning into automation and digitization can also mean less personalization. But for most restaurants, it’s still important to maintain that human touch and build meaningful customer relationships. A CRM system can help you do just that. It stores customer data, tracks their preferences, and ultimately allows you to better understand their preferences — creating a more customized experience and ultimately customer loyalty.
2. Formalize your staff training program
Investing in regular staff training is another key restaurant management strategy that gives your people what they need to succeed.
A well-trained staff will not only possess the necessary skills to perform their roles efficiently, but they also reflect your restaurant’s standards and values. Whether it’s the kitchen staff preparing meals or the front-desk staff interacting with the customers, every individual contributes to the overall customer experience.
Staff should be trained on how to handle various situations, from managing customer complaints to upselling menu items. Training also ensures that hygiene and safety standards are consistently met.
3. Consider the employee experience
The hospitality industry is known for high employee turnover. Part of that is due to the nature of the job — many employees join the workforce during transitional seasons of life (think: college kids); there’s seasonality to consider, etc.
But turnover is also due to the fact that hospitality is a grind — and if you’re not meeting you’re staff’s expectations when it comes to things like culture, flexibility, and even benefits, then they’ll look elsewhere. (And they’ll likely find something, given the tough labor market.)
In addition to simply keeping your restaurant running, having a high staff retention rate makes every aspect of your operations easier. When your staff stays with you for a long period, they become more familiar with your standards, operations, and expectations, and are better able to deliver consistent, high-quality service.
Frequent turnover, on the other hand, can lead to inconsistencies in service delivery and creates more headaches when it comes to scheduling and management. Plus, the cost of recruiting, interviewing, and training new hires adds up over time – especially if new staff only stays for a few months. Turnover also ups your admin burden when it comes to tasks like payroll and user management for your tech systems.
A few retention-oriented tactics you can incorporate into your restaurant management plan:
- Competitive wages
- Employee benefits (which may be more financially feasible than you think!)
- Career growth opportunities, with a clear path to achieve them
- A fun, respectful workplace culture
One key factor contributing to employee satisfaction and retention in the restaurant industry is the fair and prompt disbursement of pay and tips. That’s where Kickfin can help. Kickfin is a digital tip distribution platform that enables restaurant owners to send tips directly to their employees’ bank accounts, instantly after their shift.
By eliminating the need for cash handling, Kickfin not only increases efficiency but also ensures transparency and fairness in tip distribution. Employees can expect to receive their tips promptly, fostering a sense of financial security. Moreover, the immediacy and reliability of Kickfin’s system can boost employees’ morale, leading to increased job satisfaction.
4. Focus on Customer Experience
As a restaurant manager, prioritizing service is crucial to ensuring your customers feel welcome and receive a high-quality experience. That includes:
- Greeting guests: Invest time in training your staff on how to interact with customers — which starts the moment someone walks in the door. A genuine, prompt greeting sets the tone for the overall dining experience.
- Communication: Employees should be able to communicate clearly, listen to customer needs, handle complaints with professionalism, and provide quick solutions. Not only does it demonstrate your restaurant’s commitment to satisfaction; it’s also a great way to help your employees boost their tips.
- Efficiency: Quality service means efficient service. Make sure orders are taken accurately and delivered to tables promptly. Regular staff meetings can be useful to highlight areas of improvement for both front-of-house and back-of-house — and it’s an opportunity to recognize efforts of staff who consistently go above and beyond.
- Feedback: Feedback, whether positive or negative, is a powerful tool for improvement. Consider using comment cards, online surveys, or simply asking customers about their experience. This not only shows your customers that their opinion matters, but it offers insights into how your service and food are perceived and where there might be room for improvement.
5. Be aware of online reviews
In today’s digital world, online reviews significantly influence a restaurant’s reputation and customer decisions. Continuously monitor and respond to reviews on platforms like Yelp, Google, TripAdvisor, and social media.
Negative reviews, in particular, should be addressed promptly and professionally. Avoid getting into online battles: Simply apologize for any shortcomings, acknowledge the customer’s dissatisfaction, and suggest a resolution. This approach shows potential customers that you’re dedicated to providing exceptional service and willing to make things right when they don’t go as planned.
Positive reviews deserve your attention as well. Thank each customer for their feedback and express your delight in serving them. It will encourage repeat business and inspire others to visit your restaurant. You might even consider incentivizing those who have had positive experiences to share them more widely.
6. Always be marketing
Continuous marketing is essential to keep your restaurant at the forefront of customers’ minds. Actively promoting your restaurant on various platforms, like social media, flyers, and local newspapers helps you reach a broad audience and increase visibility. Social media platforms, in particular, offer cost-effective and highly engaging ways to connect with customers, showcase your food, and build a community.
Regular updates about new menu items, special discounts, and events can entice customers and increase sales. It’s also beneficial to leverage local publications, as they can help you attract a local crowd and build a loyal customer base. Distributing flyers and circulars in nearby areas can be effective, too, especially for promoting new offers or events. Keep in mind that marketing is a continuous process – not a one-time, check-the-box restaurant management task.
7. Experiment and innovate
The best restaurant management plans leverage outside-the-box thinking. Don’t be afraid to experiment with different aspects of your business — for example:
- A dynamic menu can keep your patrons excited and curious about your offerings. Trying out new recipes or introducing seasonal dishes can provide a unique dining experience, attracting new customers and encouraging regulars to keep coming back.
- Creative pricing strategies can drive profitability. Offering discounts during slow hours, or bundling certain items together at a lower price, can boost sales and enhance customer satisfaction.
- If you have the space, hosting private events can also increase sales while making your restaurant feel like an entertainment destination — and can be an opportunity for new guests to visit your business.
- Live music nights, themed dinners, or cookery workshops can generate buzz around your establishment and foster a sense of community amongst your customers.
- Rethinking the decor — whether it’s a true overhaul, a spruce-up, or simply decorating for seasonal trends — can make your space feel fresh and inviting, which in turn elevates the dining experience.
8. Be aware of your cash flow and accounting
Keeping a close eye on cash flow and accounting is essential for maintaining sustainable restaurant operations. Inconsistent or inadequate cash flow can lead to various challenges, potentially affecting your ability to pay employees, suppliers, and other expenses.
Remember, as a manager, your continuous focus on cash flow and accounting is critical to the financial health and success of your restaurant. Using technology like bookkeeping software can significantly aid in this endeavor, allowing you to focus more on delivering exceptional food and service to your customers.
This is another area where digital tipping can make restaurant management more efficient. With more credit card tips than ever before, many restaurant managers know the pain of not having enough cash in the safe to pay out tips at the end of a shift. Kickfin makes it easy to distribute tips instantly (no cash required) by instantly transferring funds to your employees’ bank accounts. Not only do real-time, digital payouts make for happier customers — it also makes reconciliation and reporting a breeze, and gives everyone greater visibility into cash flow.
9. Connect with a mentor or other restaurant owners
Establishing connections with a mentor or other restaurant owners can provide invaluable insights and guidance for your business. A mentor with industry experience can offer advice based on their own triumphs and mistakes, helping you to navigate the challenges of the restaurant business and stay up-to-date with the latest trends and best practices. They can provide a fresh perspective when you’re faced with difficult decisions, and their wisdom can prevent you from making common mistakes.
Similarly, joining a community of restaurant owners or managers can offer a platform for mutual support and information exchange. Communities often host forums or meetings where members discuss industry changes, innovations, and common hurdles, providing practical solutions based on their experiences. Amidst the ups and downs of the restaurant business, these connections can serve as a lifeline, providing emotional support and reassurance.
Having a mentor and being part of a community enables you to continuously learn, grow, and adapt, enhancing your ability to manage your restaurant effectively and successfully.
10. Be the manager you’d like to work for
Being a successful restaurant manager takes more than just business acumen; it requires embodying the qualities of a leader. As a manager, you need to be an excellent multitasker, capable of overseeing several operations simultaneously.
You also need to be transparent. Being open and honest with your staff fosters a sense of trust, respect, and loyalty. Share relevant information, provide clear instructions, and involve employees in decision-making processes where appropriate.
If you own or manage a restaurant, you set the tone for the entire establishment. A positive attitude is contagious, inspiring employees to put their best foot forward and delivering an exceptional dining experience to customers. Through your enthusiasm, commitment, and resilience, you can create a motivating work environment that translates into the overall success of your business.
The Ultimate Guide to Restaurant Tip Management
Restaurant tip management can be confusing and time-consuming, especially if your restaurant has a large staff. Differences in state laws regarding employee wages and tipping, as well as the overall increase in credit card usage, further complicate how tips are shared with your employees.
If you own or run a restaurant, you’re responsible for creating an in-house tipping system that’s fair to both your front-of-house and back-of-house staff members — as well as your customers.
Read on to learn everything you need to know about managing tips in your restaurant — or click here to schedule a demo with our team to hear more about how Kickfin can help manage your restaurant’s tips.
Understanding tips and wages
Federal law requires that everyone employed in the U.S. be paid at least $7.25 per hour. Many states have minimum wages higher than the federally-mandated minimum. However, due to the long-standing practice of tipping, many states have instituted lower paid minimum wages for employees expected to supplement their income with tips. Paying a wage lower than $7.25 to tipped employees helps your business save money, but is not legal in every state and situation.
For example, according to the U.S. Department of Labor, it’s legal to pay tipped employees in Alabama as little as $2.13 per hour if the employee earns at least minimum wage by the time tips are factored in. However, in Washington, D.C., establishment owners must pay tipped employees a full wage of $8.00 per hour, regardless of tips earned. This wide variation makes it important to consult with a local employment lawyer versed in your state’s laws when establishing your restaurant’s tipping system.
What is a tipped minimum wage?
The federal minimum wage is $7.25 per hour, with many states implementing higher minimum wages. However, employers can pay employees who regularly receive tips a lower direct hourly wage, known as the tipped wage. A tipped wage is typically lower than the standard minimum wage and is set by law. The rationale behind these laws is that tips employees receive make up the difference between the rate the employer is paying and the minimum wage.
For the tipped minimum wage system to be valid, an employee must actually earn at least the state’s minimum wage after tips. Most businesses accomplish this by requesting that employees report tip earnings at the end of each shift. The business then adds together the total amount of money the employee has earned in tips versus an hourly wage and divides this figure by the number of hours the employee has worked. If this calculation reveals that the employee did not earn minimum wage, the employer must supplement their income.
What is a tip credit?
A tip credit is the extra money an employer must pay to an employee to make up the difference between the tipped wage and the state’s minimum wage.
Let’s take a look at an example of a situation where an employer might need to supplement a tipped minimum wage. Imagine you manage a restaurant in a state where the tipped minimum wage is $5 an hour and the standard minimum wage is $10 per hour. After working a 40-hour week, one of your employees reports a total tip-out of $180.
However, if your state has a minimum wage of $10 per hour, this means that any of your employees who work at least 40 hours must receive at least $400 in total compensation ($10 per hour). If an employee only earns $380 between wages in tips, you would need to make up the difference by including an extra $20 tip credit in the employee’s check.
If the employee earns more than minimum wage when calculating tips plus wages, no action is taken. For example, you can’t reduce an employee’s wages to $0 if they earn more than minimum wage in tips alone.
How to collect tips
There are a variety of ways your restaurant can accept tips from customers. Some of the most common ways to collect tips include:
- Cash: Cash is the most straightforward way to accept tips. Each employee may keep the cash they collect on each check, or pool tips together to split among the staff.
- Credit cards: Many customers prefer to put their tips on the credit card they use to pay for their meals. Accepting tips via credit card is convenient for customers, but will require calculation via your in-house system to pay them out correctly.
- Third-party payment apps: Some establishments ask individual employees to create payment accounts with third-party payment apps, like Venmo and CashApp.
Employees are allowed to independently collect tips with their user codes. These tips are usually treated as cash for reporting purposes, making this method unsuitable for establishments that pool tips.
Many modern point of sale (POS) systems or terminals used in restaurants have the functionality to suggest tip amounts to customers during the payment process. If using these systems, ensure your tip recording and reporting system complies with local regulations.
How do you combine cash and charged tips?
If your restaurant receives both cash and charged tips, it’s essential to have a clear process in place to handle and distribute them appropriately. This requires keeping a careful record of all tips received — regardless of whether they’re in cash or on a credit card. Most POS systems include a mechanism to collect this information automatically as it’s entered, but you may want to keep an additional backup record.
Store cash tips securely and separately from other funds to ensure accurate accounting and distribution. Establish a process where employees can safely deposit their cash tips in designated envelopes or containers, and have a standing protocol around who can access funds and how. It can be helpful to keep cash tips locked in a manager’s office until distribution.
There are a few options for disbursing credit card tips to employees. You can pay out credit card tips in cash to employees at the end of the day, but this requires taking credit card tips from the restaurant’s cash reserves, which may be limited during slow seasons. You can also include credit card tips on each employee’s wage check.
However, this strategy may require spending more resources on accounting and billing to ensure all employees are fully compensated.
And, keep in mind: Many hospitality employees are drawn to the industry because of the promise of daily payouts. Putting tips on payroll can be hard on your staff, especially if they’re accustomed to nightly tip-outs and have to start waiting days or weeks to receive their tip earnings.
A cashless tip distribution solution can be a helpful tool in streamlining and simplifying the process of distributing tips, especially when combining cash and charged tips. With a cashless solution, charged tips can be directly deposited into individual employee accounts or a centralized tip pool, reducing the need for manual handling of cash or checks. This also reduces the chances of making a costly mistake when distributing employee tips and calculating wages.
Ways to distribute tips to your employees
“Tipping out” refers to the service industry practice where employees who receive tips share a portion of those earnings with other employees who provide a service or support role during the customer’s experience. For example, while servers might directly receive tips, house rules might establish that servers tip out a small percentage of the tips they collect to the back-of-house staff or hosts who do not collect tips.
Not every establishment tips out, with some electing to pay higher wages to non-tipped employees. These are some of the most common tip division and redistribution strategies to consider for your restaurant:
Individual employee tips
The easiest method to handle tips is to allow each employee to keep the tips that they individually earn. Only tipped-wage employees are required to earn tips, so this method empowers those interacting directly with customers to keep the tips that they collect. However, this method benefits only individual tipped employees and may lead to uneven earnings across your staff.
Tip pooling
Tip pooling is a practice common in the service industry where a portion of the tips received by employees is combined into a common pool and then distributed among a group of eligible employees. Rather than keeping individual tips, employees contribute a portion of their earnings to be shared among the team.
Typically, a predetermined percentage or formula is used to allocate the pooled tips among the eligible employees. This is usually based on employee roles and contributions to the overall customer service experience. Some establishments tip out the same percentage to all employees, while others devote a larger percentage to the individuals collecting the tips.
The purpose of tip pooling is to foster teamwork, incentivize collaboration, and ensure all employees involved in providing excellent service receive a fair share of the tips — even if they don’t directly interact with customers or receive individual tips.
However, tip pooling may also foster contempt amongst employees, particularly if employees earning minimum wages receive the same percentage of tips as tipped-wage employees. That’s why it’s important to weigh the pros and cons for your team, ensure your policy is fully compliant with tip pooling laws, and create a culture of communication and feedback channels so you can understand what’s working and what’s not.
Percentage-based tip-outs
Percentage-based tip-outs involve distributing a specific percentage of the total tips earned by an employee to other individuals or groups. By dividing tips by varying percentages, management can ensure that tipped employees receive a larger percentage of their tips while also keeping things fair for non-tipped employees crucial to the customer experience.
For example, let’s say your restaurant has a 20% tip-out policy and a server earns a $100 tip. In this case, the employee will be required to distribute 20% of their tip ($20) to non-tipped employees. Depending on your restaurant, this may include hosts, prep cooks, bussers, and other qualifying employees. The remaining 80% of the server’s tip ($80) is theirs to keep.
Point system tip-outs
Some establishments use a points-based tip-out system. In a points-based tipping system, rather than distributing a percentage of the total tips, a certain number of points are allocated to each employee, and these points are used to distribute the tips among the team.
Let’s take a look at another example using a $100 tip. If your restaurant uses a point system, you might assign a server 50 points, a bartender 30 points, and a busser 20 points. In this example, points correlate to percentages, so a server would keep $50 of the tip. Accordingly, the bartender would receive $30, while the busser receives $20.
Points-based tipping systems allow for a more customized and flexible distribution of tips, considering the different roles and contributions of the employees. The allocation of points can be based on factors such as seniority, job responsibilities, or performance evaluations, enabling a more nuanced approach to distributing tips among the team.
Tax and reporting obligations
The IRS has specific regulations regarding tip reporting, withholding, and taxation. Failing to comply with these requirements can result in legal and financial consequences.
As a business owner, it’s crucial that you take steps to keep tips and payouts in order. Following these tips can help you stay on the right side of the law:
- Keep accurate records: Keep detailed records of all tip income, including cash and charged tips. Document tip allocations, distribute tips promptly, and maintain accurate records of tip pools and distributions. This documentation will be valuable in case of audits or employee inquiries.
- Implement clear and consistent policies: Establish written policies on tip reporting, allocation, and distribution. Ensure employees understand these policies and provide regular reminders or training sessions to reinforce compliance. This will help prevent disputes with employees, especially those collecting tips.
- Educate employees on their responsibilities: Train your staff on the IRS requirements for tip reporting and explain the importance of accurate record-keeping and reporting. Encourage employees to report their tip income correctly and provide them with resources or guidelines to do so.
Remember that as the business owner, the responsibility to maintain financial records falls on your shoulders. This is one area where a cashless tip management system can be majorly beneficial.
How software makes restaurant tip management easier
Even the most organized business owners can find themselves confused when managing dozens of tipped employees. Software, including tax reporting software and POS management systems, can make the process of tracking payouts and income easier. In particular, a cashless tip management system can provide a host of benefits to employers and employees themselves.
Enhanced accuracy and transparency: Cashless systems provide accurate tracking and recording of tip transactions. This helps ensure that tips are distributed correctly and transparently and minimizes the risk of human error that can lead to lawsuits and claims of improper employee payments.
More convenient for employees: Cashless tip distribution allows employees to receive their tips directly in their bank accounts or digital wallets, offering flexibility and convenience. With a growing consumer trend toward digital payments, some employees prefer the ease of non-cash payouts.
Increased efficiency: Cashless systems streamline tip distribution. Instead of manually handling cash, the system automates the process, saving time and reducing administrative burdens. Employees also don’t need to worry about the risk of loss and theft that comes with carrying cash.
How Kickfin helps with restaurant tip management
Kickfin really helps restaurant managers with facilitating the cashless disbursement of tips to eligible employees. Fewer and fewer customers pay for transactions with cash — which is why so many managers find themselves running to the bank on a daily or weekly basis because the safe is empty, and there’s not enough cash to pay out tips.
With Kickfin, you’re able to track your tipped employees’ earnings through your normal POS, and quickly total their tipped earnings at the ends of their shifts. Then, with the touch of a button, you can distribute their tips to them electronically, without having to count cash or stuff envelopes. And your employees’ tips hit their accounts instantly.
Click here to learn more about Kickfin and how our cashless tipping solution can work for you
[WEBINAR] A Tip Pooling “Deep Dive” with Restaurant Strategy Podcast Host Chip Klose
Tip pooling can have big benefits for your entire team…but landmines abound.
Don’t just take our word for it: a quick Google News search for “tip pools” will return countless stories detailing costly lawsuits against operators who were — sometimes unknowingly — running illegal tip pools.
Of course, if you’re going to pool or share tips in your restaurant, compliance is only one (albeit very important) consideration.
It’s also critical to choose the best structure for your restaurant based on a variety of factors — including your restaurant type, team size and local market. And then there’s the rollout: Properly communicating the policy to your team and soliciting feedback can go a very long way in ensuring the success of your tip pool.
If you’re considering instituting a tip pool or tip share — or if you want to evaluate your current tip distribution program — check out our recent webinar moderated by Restaurant Strategy Podcast host Chip Klose and featuring Justin Roberts (co-CEO, Kickfin); Larisa Thomas (VP Operations, Kickfin); Beth Schroeder (Partner, Raines Feldman LLP).
Watch the recording below to hear the panelists cover the ins and outs of tip pooling, including:
- Pros and cons of running a tip pool
- The most common types of tip pool structures
- Tip pooling myths and misconceptions
- Avoiding costly tip pooling compliance mistakes
- Best practices for launching or updating a tip pool policy
The Hidden Costs of Tipping Out in Cash
Roughly 4-in-10 Americans say they aren’t using cash in a typical week, according to a recent report from Pew. But even as we creep toward a cashless economy, a large chunk of the hospitality industry is holding fast to cash — at least, when it comes to tip distribution.
Most of the restaurants, bars and hotels groups that continue tipping out in cash do so because it’s “the way they’ve always done it.”
And if you’re in that camp? We get it. Sticking with the status quo can feel like the path of least resistance. (Which counts for a lot these days.)
Plus: Paying out in cash daily also helps with recruitment and retention: hospitality employees expect and deserve to get paid in real-time. Meeting that need is critical in the face of an ongoing labor crisis, when restaurants and bars are competing for talent with other establishments and gig economy employers (hi, Uber and DoorDash).
But the reality is that cash distributions aren’t the only way to tip out in real time. And they actually come with a whole host of hidden (unnecessary!) costs that could be putting a major dent in your bottom line.
Don’t take our word for it: here are seven ways that your business may be “paying” for cash tips.
1. Managers get pulled off the floor
Managers already have a lot on their plate — helping out on the floor, checking in with guests (and smoothing over any issues), or even working the line in the kitchen. They step in where they’re needed, but distributing cash tips is an unnecessary task that takes them away from work that really matters. In fact, the whole process can consume 10+ hours of their week, every week.
Cash tip-outs take so much time because more customers are paying with credit cards or digital payments. As a result, restaurants simply don’t have cash on hand to pay out server tips at the end of each shift.
That means:
- Many managers find themselves making frequent bank runs — sometimes every day.
- Once cash is in hand, they’re tasked with calculating tip pools and counting cash. It’s a tedious job for anyone, but for a run-down manager who’s trying to keep their eyes open while they’re closing out at 2 a.m.? It’s the worst.
- Not only is it tedious: cash tip distribution keeps them chained to the back office when they could be out on the floor, doing what they do best.
- If employees come to pick up their tips from the night before, the managers are once again pulled off the floor to ensure everyone gets what they’re owed.
2. Unnecessary labor costs
If you’re still paying out cash tips, your labor costs are likely higher than they need to be.
Sure, your managers might be salaried — but at many restaurants, hourly employees will be waiting on the clock for their manager to pay out their tips since both the employer and employee need to be physically present when currency is exchanged.
To quantify this, pick a state…how about Colorado where the server minimum wage is $10.63? If a Colorado restaurateur has 10 employees waiting together on the clock for 15 minutes, that’s 150 minutes of unnecessary compounded labor or $26.58/day – about almost $800/month.
(Of course: managers could send employees home to save “on clock time.” But that means they’ll have the inconvenience of either waiting until their next shift to get their payout, or trekking back to work on a day off — which comes with added gas money or public transit costs —to complete the envelope pass.)
3. Employee theft
You work hard to hire the right employees: people you can trust. You ask the right questions, check all their references, run the background checks.
You can do everything right, but employee theft still happens. An estimated $3-6 billion of revenue is lost annually as a result.
Does it mean your employees are bad people? Not necessarily. But tough personal times — or pure temptation — can lead good people to make bad professional choices and justify illegal behavior. Reducing or eliminating cash held on premises for tipping out mitigates the risk (and temptation) of both minor skimming and major theft.
4. Human error
Even if your employees don’t intend to skim from tips, counting errors happen. After a particularly exhausting Saturday night shift, your managers are often sitting there counting cash for so long that they start to feel cross-eyed — and they’re bound to slip up from time to time. Even if you just misplace $5 every other day, you could be losing nearly $1,000 every year.
And if a mistake is made, there’s no record of it. Once the cash is gone from your restaurant, you have no way to recuperate it.
5. The ABCs of fees
Accounting fees – Cash tip reconciliation and accounting for last-minute bank cash orders is time-consuming. Your bookkeeping firm will bill for the additional hours needed to accomplish these tasks. If you’re also at the helm of a multi-location establishment, you’ll need to plan for the reporting delays and additional costs involved in requesting payroll reports from each location.
Bank fees – As many banks outsource their vaulting to cash management companies, they roll a piece of their cost for this service down to their customers in the form of a fee for local cash pick up. Combine this particular fee with a massive liability issue: anything could happen while your GM is off premise to courier the cash, including theft or robbery. And of course, bank runs take up on-the-clock time that your GM could be spending managing the business.
Cash in transit fees – Choosing to use an armored car service to deliver cash is common practice for high-volume locations. However, it comes with both a fee for delivery and for the cash itself. Those can range from $250 – $400 per week.
6. Rounding up (and down)
Some employers use a time-rounding policy that can result in shortchanging employees on wages they were scheduled to earn.
Other employers round up or down to the nearest dollar to make the cash counting process easier — which either inflates the tip outs or withholds money that is supposed to be payable to the employee. The rationale used in both cases is that eventually it all evens out.
But beware the security risk you’re inviting here. Employees can claim that you are underpaying them for their time and/or their tips since it’s not an accurate disbursement each night. And for the teams that consistently round up: those quarter
7. Employee safety and financial wellness
Restaurateurs also often feel responsible for their employees in ways that don’t apply in other work environments. You spend a lot of time together, and it starts to feel like a family.
As the head of that family, you can make choices to further promote employee safety. For example, employees feel safer and more secure leaving at night without cash in their pockets. They also report that tipping out in something other than cash means they tend to spend less of their tips on frivolous things.
Digital tipping cuts the costs of cash
Yes, cash tip outs are slow, risky and costly — but for years, it was the only way to give employees instant access to their earnings.
That’s changing fast, thanks to the advent of digital tipping. No longer is cash tip distribution a necessary evil.
Innovative, easy-to-use technologies present safer, more efficient alternatives to tipping out in cash. They can make a standard process easier for you and your team, decrease liability, and eliminate other hidden costs to your business. The best part: it’s easy to use and a breeze to implement.
(Want to see digital tipping in action? Request a personalized Kickfin demo today!)
Electronic Transactions Association Recognizes Kickfin as Top 10 ISV
AUSTIN, Texas (February 21, 2023) — The Electronic Transactions Association (ETA) today announced that Kickfin has been named a Top 10 Payments Independent Software Vendor (ISV).
ETA launched this award in 2023 to recognize ISVs that are offering disruptive software solutions, making a recognizable impact, and driving the payments industry forward.
“The hospitality workforce truly makes the world go around. We built Kickfin because we wanted to change the way those front-line employees are paid, for the better,” said Kickfin co-founder Justin Roberts. “Electronic Transactions Association’s recognition of Kickfin underscores our leading position in the digital tipping category and is a meaningful validation of our mission to reimagine employee payments.”
Ranked the #1 tipping software, Kickfin is the nation’s largest provider of instant, cashless tip payments. Restaurants, bars and hotels use Kickfin to digitally accept, calculate and tip-out their employees in real-time. By removing cash from the tip payment process, businesses can focus on delighting their customers, while maximizing the earning potential of their people.
ETA’s recognition of Kickfin underscores our leading position in the digital tipping category and is a meaningful validation of our mission to reimagine employee payments.
To be considered for the ETA Top 10 award, candidates had to be ISVs that are “integrating payments solutions that disrupt the industry and drive payments forward.” Software solutions were judged on whether they add significant value to the organizations that use them, and whether they deepen the relationship between the user and the chosen platform.
Additionally, winning ISVs needed to demonstrate:
- Enhanced user experience
- Improved payments security and PCI DSS Compliance
- A quicker, more efficient payments process for merchants
- Increased revenue generation and stickiness
Kickfin will accept its Top 10 Payments ISV award at TRANSACT, ETA’s annual convention, April 24-26 in Atlanta.
To learn more about Kickfin’s digital tipping software, visit kickfin.com/demo.
US Foods Adds Kickfin to Innovative Partnerships Program
We’re kicking off 2023 with some big news: US Foods Holding Corp. (NYSE: USFD), one of America’s largest foodservice distributors, has announced the addition of Kickfin to its US Foods Innovative Partnerships incubator program.
The program was designed to help US Foods find the most innovative and proven technology solutions for their customers. Potential technology solutions are selected to participate in regional customer engagement events to demonstrate the solution and gauge operator interest and viability.
Following a successful introduction, Kickfin will be eligible to be activated nationally within the CHECK Business Tools program.
Joining the US Foods incubator program means we’ll be able to help even more restaurants solve for cash shortages, uncover new operational efficiencies and foster the financial wellbeing of their employees.”
“Restaurant teams are feeling the pain of old-school tip-out processes — which is why demand for digital tipping is at an all-time high,” said Kickfin cofounder Brian Hassan. “Kickfin enables thousands of hospitality employers to send instant, cashless tip payouts, directly to their employees’ bank of choice, at the end of every shift. Joining the US Foods incubator program means we’ll be able to help even more restaurants solve for cash shortages, uncover new operational efficiencies and foster the financial wellbeing of their employees.”
For more information about how US Foods is helping customers “Make It” through CHECK Business Tools, visit usfoods.com/our-services/check. View the full press release here.
About US Foods
With a promise to help its customers Make It, US Foods is one of America’s great food companies and a leading foodservice distributor, partnering with approximately 250,000 restaurants and foodservice operators to help their businesses succeed. With 70 broadline locations and more than 80 cash and carry stores, US Foods and its 28,000 associates provides its customers with a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions.
The Brass Tap/Beef ‘O’ Brady’s Partners with Kickfin and Visa Direct to Enable Cashless Tip-outs for Employees
FSC Franchise Co., which franchises more than 200 Beef ‘O’ Brady’s and Brass Tap locations, has long been known for a workplace culture that fosters the wellbeing of employees.
So it’s no surprise that the franchisor was an early adopter of digital tipping. Following an RFP process — and after soliciting input from their employees — FSC selected Kickfin as the the company’s digital tipping solution.
With Kickfin, Beef ‘O’ Brady’s and Brass Tap now employees receive tips in real-time(1), at the end of every shift — directly to their bank of choice. And, importantly, the brands have realized new efficiencies by eliminating cash tip-outs and all of the operational headaches that come along with cash. (Think: fewer bank runs, improved tracking and reporting, significantly reduced risk of theft, skimming and human error…the list goes on.)
For more details on our partnership, read the full press release below. (And if you’re ready to enable a secure, compliant, cashless tipping program across your org? You know where to find us!)
The Brass Tap/Beef ‘O’ Brady’s Partners with Kickfin and Visa Direct to Enable Cashless Tip-outs for Employees
The Brass Tap and Beef ‘O’ Brady’s, owned by FSC Franchise Co., reaffirm their employee-first culture by providing real-time1 access to tip earnings.
AUSTIN, Texas, Nov. 30, 2022 /PRNewswire/ — Kickfin, the largest tip disbursement enabler in the U.S., today announced its partnership with FSC Franchise Co., which franchises more than 200 locations, to serve as the franchisor’s gratuity management platform.
Leveraging the combined technology of Kickfin and Visa Direct, FSC Franchise Co. can send real-time1, cashless tip payouts directly to their employees’ existing bank accounts.
“Cash tip payouts had become unworkable for our team, so we began exploring digital tipping solutions,” said Scott SirLouis, COO of FSC. “After running an RFP process, we selected Kickfin because it ensured our tipping program would be scalable and compliant across our entire organization. And most importantly, we had buy-in from our employees: when we surveyed our staff, 100% opted to get instant tip payouts through Kickfin.”
Kickfin is the only gratuity management platform that gives employees the power to choose how and when they want to receive their tips, so they are not limited to a third-party issued paycard. Brands like FSC Franchise Co., Marco’s Pizza, Walk-On’s Sports Bistreaux and Rock N’ Roll Sushi use Kickfin to improve recruiting and retention while eliminating operational challenges related to cash management.
Kickfin’s technology also ensures organizations remain compliant with complicated, ever-changing tip pooling regulations, and integrates with existing POS and payroll systems. Kickfin customers have saved 5-15 hours per manager, per location every week.
“Many hospitality employees have chosen to work in this industry because they get access to their earnings after every shift,” said Justin Roberts, co-CEO of Kickfin. “As restaurants struggle to pay out cash tips, it’s critical that they digitize their tip payment program to ensure that their staff continue to get immediate access to their tips. Brands like FSC Franchise Co. are setting a new standard for employers that understand the importance of prioritizing the needs of their people and modernizing their operations.”
ABOUT FSC FRANCHISE CO
FSC Franchise Co. is the industry-leading franchisor behind Beef ‘O’ Brady’s and The Brass Tap, with nearly 200 locations across the United States. Beef ‘O’ Brady’s, with 143 locations in 21 states, is a family sports pub concept that provides the perfect atmosphere for friends and families to watch the game and grab a bite. The Brass Tap, a craft beer bar and entertainment venue with 44 current locations in 16 states, is known for extensive localized brewery offerings, specialty cocktails and premium wines paired perfectly with a select menu of upscale shareables.
ABOUT KICKFIN
Ranked the #1 tipping software, Kickfin is the nation’s largest provider of instant, cashless tip payments. Restaurants, bars and hotels use Kickfin to digitally accept, calculate and tip-out their employees in real-time. By removing cash from the tip payment process, businesses can focus on delighting their customers — while maximizing the earning potential of their people.
1 Actual fund availability depends on receiving financial institution and region.
North High Brewing Opens 5 New Locations with the Help of Kickfin
Success Stories
North High Brewing Opens 5 New Locations with the Help of Kickfin
Restaurant Group | FSR, Brewery
About the company
Founded in 2011, North High Brewing Company was one of only 7 breweries in the Central Ohio area. Ten years later, they’ve expanded into brewpubs and restaurants across four cities and two states.
Notable sites
While they now brew the beer off-site, the Dublin brewpub serves the flagship and the face of the business.
Number of locations
7 (with three more coming soon!)
Service type
FSR, Brewery
“Kickfin makes a huge difference when it comes to staying organized, making transitions seamless, and ensuring that we’re comfortable with how the business is going before we’re onto the next expansion.”
Jodi Skaff
Director of Finance
North High Brewing Company
Key Results
- Accountability. Cash never goes missing due to disorganized tipping methods.
- Happier employees. Managers only spend 15-20 minutes a week on tip distribution, and employees can count on their Sunday deposit.
- Rapid growth. Balanced books allowed them to open five new locations just in the past year.
Meet Jodi.
Jodi Skaff is the Director of Finance for North High Brewing Company, which has expanded from its original Columbus brewery to include six other brewpubs in Ohio and Indiana. Jodi’s oversight of NHB’s finances has made it possible to scale the business quite rapidly — with five locations opening in the past year and three more on the way.
As an early addition to the craft beer scene in central Ohio, North High has built a reputation for good beer and classic, midwestern-style menus. At all of the many NHB locations, they exclusively serve North High beer alongside favorites like fried pickles and buffalo cauliflower chunks.
Disappearing tips
Before adopting Kickfin, NHB tipped out their 50 employees in cash – and the disorganization was costing them. With that much cash floating around, mistakes are bound to happen, and NHB was losing money every week.
Jodi noticed the discrepancies in credit card tips and cash tips, but there was no way to recoup the losses and no accountability. “I think for restaurants, tipping poses one of the biggest risks for money to just disappear,” she said. “You pay someone too much cash and it’s gone. There’s no way to really trace it after that.”
Balancing the books with Kickfin
Jodi has her hands full with keeping seven brewpubs’ finances afloat, and missing money was making it even harder. When North High made the switch to Kickfin’s cashless tip distribution, she said the nightmare was over. “It was pretty much a no-brainer because dealing with cash from an accounting and finance standpoint was a nightmare,” she said. “I always struggled to balance the books and they would never match up. And now it’s a very cut and dry system.”
Not only was Jodi happier with the added accountability, her managers and employees bought into the system, too. Instead of having to come in person to collect tips, employees count on Kickfin to deliver their pay on a regular basis without interrupting their days off.
Jodi says the managers like the system because they no longer have to deal with her. “It’s less frustrating for managers because I’m not coming at them asking why money is missing anymore,” she said.
Scaling their restaurant
As North High grew, the company needed to quickly set up gratuity management systems at each new location. Jodi relied heavily on Derek from the Kickfin team to implement the platform throughout their expansion. “We’ve opened five locations in just the past year and it’s been very simple to just let him know we have a new location and he’s on it,” Jodi said. “He’s great, especially because half the time I’m reaching out last minute and need to get things set up and he just makes it happen.”
Not only has Kickfin supported North High’s expansion, but it also makes it easier to switch employees between locations, and hire new employees–especially now that they have 253 tipped employees. According to Jodi, the system is straightforward and easy for employees to get behind. “It’s so user-friendly for everyone, and I never really get questions about how to use it,” said Jodi.
While cashless tipping didn’t directly cause NHB’s rapid growth, using Kickin has certainly made it easier to scale. According to Jodi, “Balancing the books plays a huge role in our ability to expand. If you’re not super organized and keeping finances in check, you can’t expand as quickly as we have.” Going cashless has made finances much clearer for NHB, ultimately growing their confidence in their business and continuing to grow.
The bottom line
“Expanding is hard enough as it is. You need to set up so many new systems, have to make sure the books are balanced, and using Kickfin to easily pay out tips and check for discrepancies makes a huge impact.”
Jodi Skaff
Director of Finance
North High Brewing Company
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