Hot Tips & Takes: Restaurant Accounting Tips from MarginEdge

How can restaurant operators use tech to stay on top of their accounting? Ask Kevin and Eric.

At Kickfin, we know the right technology helps restaurants run more efficiently — and makes operators’ jobs easier. But if you know, you know: restaurant accounting can be a beast. So we connected with MarginEdge’s Kevin O’Nell (SVP of Payments and Partnerships) and Eric Jeffay (Senior Partnership Manager) to talk about the specific accounting challenges restaurant owners face, and how tech is solving them.

What makes restaurant accounting different from other businesses?

Kevin O’Nell: I think two things stand out when it comes to accounting at a high level. First, most restaurants are structured on 4-5-4 accounting, which is unique from other small businesses and not necessarily supported in QuickBooks Desktop as well as restaurant owners would like it to be.

The second thing: A lot of owners own multiple locations, so they probably run accounting across those locations. Perhaps those locations have different ownership groups, so then when they report out earnings and dividends, they have to account for that as well.

What are some common accounting mistakes restaurant owners make?

Kevin O’Nell: The mistakes someone would make are not unique to the restaurant industry. For example — any growing entrepreneur will see accounting become more and more important as you grow and become profitable.

Sometimes, in the beginning, it’s not always the highest priority. Surely building a business, hiring the right people, putting the right processes in place, and growing sales matters, but as an organization expands and as there are more stakeholders, then all of a sudden accounting really matters.

Many people start off with their accountant as themselves, their spouse, or someone in their family. But at some point, outsourcing or hiring a professional becomes an important piece of growing their business.

Eric Jeffay: Restaurant owners very often are not traditional business people. They don’t have offices and desks, and it’s easy to fall behind on your data entry when you’re doing accounting as a restaurant operator. So they should be aware that accounting is not something that happens on the last day of the period —and certainly not at the end of the year. That’s not the time to do your data entry.

And it’s a fairly common mistake to think accounting is not a daily process. But at the end of the day, somebody has to do the data entry on a somewhat daily basis, whether it’s a software or the restaurant operator themselves.

How does tipping play into restaurant accounting?

Eric Jeffay: I’m sure you guys know this at Kickfin — but tips are liabilities, not assets. It’s important to make sure you have those funds set aside. You’re not realizing those funds, or if you are, you have to be really careful you do pay those out in full. It’s really the same as sales tax. It’s not your money.

How can tech ease the burden of accounting?

Kevin O’Nell: No one wants to have to stay and do accounting either at two o’clock in the morning after a restaurant closes or all day on Sunday morning instead of spending time with their family.

With technology like MarginEdge, QuickBooks, and Kickfin, we are allowing restaurant owners to easily digitize those transactions and that information in a way that just wasn’t possible five or 10 years ago. And so all of the paper processing that you would have done now is in a digital format that saves people tons and tons of time.

Eric Jeffay: I think Kevin is spot on. You just have to realize a lot of accounting reporting is not meant to be actionable on a day-to-day basis or a week-to-week basis. Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.

“Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.”

Are restaurants automating their accounting?

Kevin O’Nell: The main way restaurants are automating their accounting is in the data entry. You used to manually enter that data, but now there are a number of tools, including MarginEdge, that do it automatically.

For one, we’re seeing that automation is moving sales from their point of sale system into accounting software. You’re also seeing it in payroll – which is a large expense for restaurants – it can now be pulled into your accounting software on nearly a real-time basis. And, of course, receivables (like food and other orders) can be pulled into their accounting software digitally as well.

Eric Jeffay: Yes and all that data entry is super important. I also want to mention one thing — there’s absolutely a role for an accountant. Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt, but it’s not nearly at the level of replacement.

“Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt…”

What are the advantages of outsourcing your accounting?

Eric Jeffay: The advantage of outsourcing your accounting, especially if you’re a smaller restaurant or a small group of restaurants, is that you need the economy of scale to have an in-house staff accountant that you can afford to pay. So if you are smaller, if you’re growing, if you’re in an early stage, then it’s really much more cost-effective to outsource your accounting. But there are disadvantages to that. Oftentimes, I think when you outsource, you fit into that accountant’s processes and their workflow.

As you grow, the advantage to keeping your accounting in-house is you have more autonomy over accounting. That speeds up your reporting very often, and you can better customize your accounting reporting and your accounting processes if you are doing it in-house. You probably have more flexibility on what your period structure is, what your chart of account structure is, what type of flash reporting you get, and what type of tech you use.

I would also say — obviously all restaurants strive for profitability, but they do so to varying degrees and varying levels. So there are operators who have more of an economic focus on their businesses compared to others, and you probably want to shore up your weaknesses.

If you’re a chef-owner who maybe doesn’t have experience in business school – which, quite frankly, that was me – you would want to shore up by having a really strong accountant. Then you might say, “I’m going to outsource my accounting because I’m not an expert on it.” If you can’t manage an accountant or a team of accountants onsite, it might make more sense to go with experts from the outside who are going to manage themselves.

What accounting advice would you give to new restaurant owners?

Eric Jeffay: Operators often view accounting as almost a dirty word, but accounting can be a really positive thing. It’s much better to know what’s happening in terms of building a sustainable business, taking care of your staff, and making sure you’re efficient with your resources. There’s a real upside to having good accounting practices.

The other thing I would say is to get an early start on it. Make sure that you spend time on setting up systems, setting up software, and setting up processes early on that will help sustain you because it’s really easy.

Accounting is not the focus of restaurant owners and it shouldn’t be, but you should be able to have the processes on the back burner. That way you can focus on what’s happening in your dining room, what’s happening in your kitchen, and what’s happening with your marketing — the things that are sexier and more fun to spend your time on.

I think that’s where we get back into the discussion of tech being helpful. There are a lot of great programs that can make your life so much easier and more efficient by setting a lot of those things on autopilot for you.

Kevin O’Nell: When set up correctly, accounting can be a tool that allows you to spend more time with your customers and know when you’re making a dollar or losing a dollar. Set up incorrectly, it can be a complete blind spot, so it’s completely worth the time to do upfront.

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Restaurant Management

Tip Pooling: Pros and Cons

For restaurant owners looking to boost teamwork and make sure every employee gets their fair share, a tip pool or tip share seems like a natural solution. But like there are pros and cons to tip pooling that every operator should be aware of.

Of course, it doesn’t always make sense to pool tips. (And when it does make sense, tip pooling policies are definitely not one-size-fits-all!)

If you’re on the fence, check out our tip pooling pro-con list below and consider how they would affect your restaurant’s unique dynamics.

What are the pros of tip pooling?

It takes a lot of hard work and collaboration to deliver an excellent guest experience. For most restaurants, the primary goal of tip pooling is to ensure all employees are fairly rewarded for their contributions.

Here are a few of the benefits that tip pooling offers restaurant teams.

1. Improved performance

When executed strategically, tip pooling can bring your team together around a shared goal — delivering a top-notch guest experience — and reward them for doing so.

And when employees are all working toward a common goal, they’re much more likely to work together and go out of their way to lend a helping hand or fill in gaps. This can be particularly true for tip pools that include employees who generally aren’t directly tipped, like bussers, hosts, and back-of-house employees.

2. Reduced competition among servers

Does one section get all of the large parties (aka all the large tips)? Or does your patio section get too hot for most guests during the summer? When employees aren’t sharing tips, your workplace culture might start to feel (overly) competitive and even lead to tension or disputes. When servers start feeling slighted or get hung up on who-got-which-table, not only does that affect morale — it slows everyone down.

An equitable tip pool can keep servers from feeling like they need to keep score, so they can focus on providing top-notch service to all of the guests in the restaurant.

3. Increased focus on training

When you bring on new staff, you typically have them train with your best veteran servers. And when those vets know that their trainee will be part of their future tip pool, they’ll be more invested in the training, making sure to give them a master class in upselling and customer service.

4. More equitable distribution

Unfortunately, customer biases — conscious or not — can impact tip amounts. Whether based on race, gender, or other factors, this kind of discrimination can affect your employees’ livelihoods.

While restaurant operators can’t control if some employees receive preferential treatment, they can help to compensate for those injustices by pooling and fairly distributing tips.

Cons of Tip Pooling

While most restaurants these days run some form of tip pool or tip share, there are some common drawback and pitfalls to tip pooling, which are worth considering before you implement a new policy

1. Top performers may feel negatively impacted

If your best servers are consistently bringing in far more than the standard 18-20% in tips, they might not be so pleased to share with employees who may not have the same experience, talent or work ethic.

Couple that with the fact that some servers can turn tables much quicker than others, resulting in a higher volume of sales and a whole lot more tip income — well, your top earners could start feeling cheated by the tip pool.

And in a tough labor market, if a hardworking employee isn’t happy with their earnings, they likely have other options.

2. Under-performers can slip through the cracks

On the flip side of that: a tip pool could allow lower-performing employees to slip through the cracks. If you’re not closely evaluating the average tip amount (and average check size!), you may miss that one of your employees is struggling with their customer service.

3. Compliance is an added consideration

Tip pooling is regulated at the federal and (usually) state level. Some municipalities also have their own rules around how to legally pool tips. These laws can get pretty complicated, making it all too easy to fall out of compliance without even knowing it. For example: managers can’t participate in a tip pool; but what happens if a manager is also performing server duties? Can you include back-of-house in your tip pool? Does your eligibility for the tip credit change if you operate a tip pool? It’s important to know the answers to all of these questions and fully understand the laws that apply to each of your locations. (Especially if you have locations in multiple states!)

Tip Pooling Pros and Cons at a Glance

That’s a lot of information to take in, so here it is a handy-dandy pro-con chart.

To Pool or Not to Pool?

The majority of restaurants in the U.S. operate some form of tip pool. At Kickfin, we’ve worked with thousands of restaurant teams who participate in tip pooling or tip sharing. We’ve found that often, the positives outweigh the negatives.

But that comes with a major caveat: the best tip pooling teams have been strategic and intentional with their policies — and as a result, no two tip pooling policies look exactly the same.

If you want to set yourself up for tip pooling success, here are a few general rules of thumb.

Evaluate your requirements: Ask yourself why you’re running a tip pool. What needs are you trying to address or problems are you trying to fix? Specifically consider your restaurant type, team size, org chart, and local market to find the best policy for you.
Don’t overcomplicate: It shouldn’t require a degree in calculus to calculate your tip pool. If you feel like it’s getting unwieldy, it’s possible you’re setting your team up for mistakes and tracking issues.
Get feedback for better buy-in: This shouldn’t be a decision-by-committee scenario, but it’s worth checking with management and even some of your team’s unofficial leaders to get their input before running with a new policy. This can help get the rest of your employees on board.
Write it down and run it by your counsel: Your tip pooling policy should be on paper, in black and white. You should also have your legal counsel review it to make sure you’re not inadvertently out of compliance with tip pooling regulations.
Communicate everything: Once you’re feeling good about your policy, share it. Make sure every tip-eligible employee understands how it works and has the opportunity to ask questions.
Ensure transparency by tracking everything: It’s not enough to share your policy. It’s important that every payout is tracked, including how those payouts were calculated. Not only does that streamline accounting and reporting; it also creates a culture of trust with your employees. If there is ever any question around a payout, having a digital paper trail is invaluable.

The best tip pools are automated

Tip pool calculations often happen in a spreadsheet, which is less than ideal. Kickfin integrates with your POS, so you can eliminate spreadsheet math, reducing the risk of human error and ensuring every payout is accurately calculated and tracked. Plus: Kickfin customers can send instant, cashless payouts directly to their employees’ bank of choice.

The result: All the benefits of tip pooling, without the hassles, risk, and time required. (In fact, many of our users can calculate and pay out tips at the end of each shift in under 60 seconds!)

Want to learn more? Request a demo today.

Product and Company News

Kickfin Recognized on the 2025 Inc. Regionals List

Kickfin has earned a top spot on the 2025 Inc. Regionals list in the Southwest region! This recognition places us among the fastest-growing privately held companies in America—and we couldn’t be prouder of what this means for our team, our customers, and the restaurant industry at large.

A Milestone Achievement

As the #1 tip distribution platform, Kickfin is trusted by thousands of restaurant teams to automate tip pooling and payouts. Since 2017, our technology has given managers hours back in their week while improving accuracy, visibility, and reporting for operators.

Only 951 companies made the cut across all regions, and in the Southwest alone, the businesses on this list contributed 13,809 jobs to the U.S. economy while achieving a median growth rate of approximately 106 percent from 2021 to 2023.

Powering the Future of Tip Management

In the past year, Kickfin has taken automated tip management to a whole new level. In addition to exciting new features that make our platform more robust than ever, we continue to add to the list of our direct integrations with the leading POS brands—which currently includes Toast, SkyTab, Square, Heartland, RPOWER, PAR POS, Oracle MICROS, NCR Aloha, and more.

→ See how the Kickfin-Toast integration “changed everything” for HOBNOB restaurants

Kickfin’s POS integrations give our customers the ability to auto-calculate even the most complex tip pools in just a few clicks, which eliminates unwieldy tip spreadsheets, saves managers even more time, and gives operators unprecedented visibility into payout calculations and history.

A Heartfelt Thank You

This achievement wouldn’t have been possible without the trust of our customers and the dedication of our team.

As Justin Roberts, co-CEO of Kickfin, puts it: “We’re incredibly grateful to our customers who have made this growth possible by trusting Kickfin with their tip management needs. This recognition is a testament to the value that automated tip management brings to restaurant teams—helping them save time, reduce risk, and take care of their people.”

We’re honored to be included in the 2025 Inc. Regionals list, and we’re excited to see what the rest of 2025 has in store!

Product and Company News, Technology and Software

Kickfin Integrates with RPOWER POS to Automate Tip Distribution for Restaurants, Bars and Nightlife

You heard that right — Kickfin has added yet another partner to our ever-growing list of POS integrations!

RPOWER POS has joined the list of leading POS systems that now integrate with Kickfin so users can fully automate tip calculations and payouts.

RPOWER is a trusted name in the restaurant industry known for its handheld devices, online ordering capabilities, and robust reporting. RPOWER’s dedication to staying on the cutting edge of restaurant tech makes the integration with Kickfin a perfect match!

With the RPOWER-Kickfin integration, restaurant operators can:

Easily build out highly complex tip policies
Calculate tip outs based on roles, shifts and hours worked
Distribute tips directly to employee bank accounts
Establish an electronic “paper trail” for every tip out

( …and more. Dive into the latest Kickfin updates for the full scoop.)

Like all of our integration customers, when RPOWER users activate the Kickfin integration, they’ll have access to our robust Customer Success team (at no extra cost!). We’re here 24/7 to review and build out your tip policy within the platform, so you’ll be up and running in a flash.

Collaboration with Riot Hospitality Group

This integration was especially exciting because we worked hand-in-hand with one of our longstanding customers, Riot Hospitality Group, to ensure the integration checked every box — and that it could handle their complex tip pooling policies.

“Kickfin has been an outstanding partner to Riot Hospitality Group for years,” said J Goldin, the systems director for RHG.

“They had already helped us go fully cashless, which eliminated a lot of risk for our teams. When we decided to completely automate tip payouts, they were a natural choice to help with that as well. We worked hand in hand with Kickfin and RPOWER to ensure the system could handle the intense complexity of our rules, while still being incredibly easy to use for our operators.”

“Kickfin is easy to implement and easy to use. If you’re thinking about trying it, you’ll be glad you did.”

As our co-CEO Justin Roberts puts it, this integration is a “no brainer for RPOWER users who understand how valuable their managers’ time is.”

RPOWER users, we’re ready for you! Schedule a demo to learn how you can activate your integration.

(Not an RPOWER user but want to take advantage of these time-saving features? See if Kickfin is integrated with your POS!)

Product and Company News

Kickfin Product Updates: New Year, New Features!

We kicked off 2025 with some major (!) updates to our Tip Calculator features.

It was a big release, and we’ll break it all down for you here — but the big headlines are:

More integrations
More speed
More flexibility

If you’re not already using Kickfin — or if you haven’t integrated Kickfin with your POS to automate tip calcs just yet — this is for you! Read on to see how you can use Kickfin’s newest tip calc features to un-clunk your tip pooling process.

More integrations, coming right up

We’re continuing to roll out integrations with the leading POS systems, giving restaurant teams the power to auto-calculate tip pools and shares in a matter of clicks.

(Side note: Kickfin only builds direct POS integrations — not using a third-party solution! — which streamlines your tech stack and keeps your costs lower.)

We were thrilled to add RPOWER to our growing list of integrations, which already includes Toast, Square, SkyTab, SpotOn, PAR and more.

If you’re an RPOWER user and you’re not yet a Kickfin customer, request a demo and we’ll show you the integration in action!

Handle autograts with ease

For servers and bartenders handling large parties, autograts can be great — but for managers, they can turn into a logistical nightmare. Now, Kickfin can help with that…

With this latest release, you can break tips and autograts into separate categories with their own set of rules for distribution. You have the flexibility to manage autograt tip splits completely separate from regular tip outs, so you can fairly reward a hardworking server-bartender-busser trio for a job well done on a 30-top.

Tips & Autograts Broken Out on Tip Data Page

Tips & Autograts Broken Out on Review Screen

With this new set up, you’ll also get more transparency in reporting. You’ll be able to see the breakdown of tips and autograts collected by each user in your reporting dashboards (more on that later!).

Include cash tips in your distributions

You heard that right — we can now distribute shares of cash tips digitally, directly to your employees’ bank accounts. Instead of doing the math on cash tips by hand, you can easily add cash to your tip pool, and we’ll calculate the share among employees for you.

Important note: cash distributions aren’t available for all of our integration partners. Contact us for more info.

Advanced Tip Rules (for even the unruliest policies)

Think your tip policy is extra tricky? Don’t worry — we’ve seen ‘em all. And there aren’t many Kickfin can’t handle, thanks to our Advanced Tip Rules feature.

If you have Advanced Tip Rules enabled, we’ve added a few new capabilities so you can further customize your tip share while we take care of the complicated math behind the scenes. Here are just a few examples of the new features we’re rolling out.

Not using Advanced Tip Rules? Reach out to us if you’d like to enable these features.

Per Segment Tip Sharing

We’ve been calculating tip shares on a check-by-check basis. For example, if you have servers sharing a percentage of tips with bussers, we would only calculate and deduct that percentage if a busser was working at the time that a check was processed. We call this Per Check Tip Sharing.

Now, we’re introducing Per Segment Tip Sharing, which gives you the option to deduct a tip share from every check processed during a shift. Let’s go back to our example — servers sharing a percent of tips with bussers. With Per Segment Tip Sharing, we would deduct a percentage of the server’s tip for every check processed, even if the busser gets cut two hours before the server.

Split Evenly

Would you prefer that all of your support staff take home an even share of their tip pool? We can now make that happen.

Previously, our tip shares entered a pool and were divided among beneficiaries based on how many minutes they worked during a shift, which we call splitting by Time Worked. With our new product update, we’re introducing the Split Evenly option, which enables you to send an equal part of a tip share to every beneficiary that worked within a segment.

More accuracy

In the past, cash autograt payments were lumped in with credit card autograts and credit card tips, resulting in credit card fee deductions on cash transactions. But that is no more!

Now we’re able to deduct credit card fees only where they apply, so you’ll no longer see credit card fee deductions attached to cash autograt transactions.

Plus, we’ve gotten even better at math. With our new update, we can prevent rounding errors, so our tip disbursal should match the tips collected in your POS to the penny.

Revamped and expanded reporting

We added new reporting views to give you more insight into each pay period, individual pay sets, and tip calculations. Here’s a quick look at your new pay period report with expanded filters:

Main Pay Period Report - Filter Bar Expanded

You’ll notice that there are now separate columns for tips and autograts, but you can still view the gross amount earned (tips + autograts = gross).

And it doesn’t stop at the main reporting page. You’ll see this more detailed reporting when you look at individual employee pay period reports, review a specific pay set, or export the information from any of your reporting dashboards.

We know this is a lot of new information to take in — but we’ve got you covered with our full Product Release Recap. Simply log in to Kickfin, click on your name in the upper left corner and select “Support” to access that portal.

Not using Kickfin? Dying to get rid of your old-fashioned gratuity management system? Drooling over these new features? We’d love to have you. Reach out to us today to see how our platform could save you time and money.