Payroll

Why KRG Hospitality Offers Tech-stack Planning

by David Klemt

Black-and-white photograph of shelves loaded with broken desktop computers and monitors

If your hardware looks like this, it may be time to update your tech stack.

Navigating the seemingly endless restaurant, bar, and hotel technology options available to operators can feel like an overwhelmingly complex task.

This can be particularly true for brand-new operators and those with a decade or more of experience under their belts. For the former, where does one with little to no experience even begin putting together their technology stack?

And for the latter, what tech upgrades are worth implementing, and which platforms are crucial; which are nice to have; and which are unnecessary for a particular concept?

Sitting down and sifting through the platforms within just a few categories can be a significant investment of time. Learning to use each solution and training relevant team members on them also requires considerable time and effort. That’s to say nothing of the initial and monthly outlay of precious monetary resources after making selections.

Of course, there’s also the nagging feeling that maybe the platforms chosen aren’t the “right” fit, or the best in class.

Most operators, regardless of the length of time they’ve been in hospitality, are aware of a handful of tech selections they need to make. They know they need a point-of-sale system, a customer relationship management option, an online ordering platform, a reservation system.

But what about inventory, gratuity management, marketing campaign management, guest feedback, scheduling, catering, website chatbots, AI-enhanced loyalty programs, and even kitchen displays?

According to Brizo Foodmetrics, operators need to consider a dozen tech categories. At KRG Hospitality, we say there are at least that many.

Difficult Choices

Per a new report from Nation’s Restaurant News, people are excited but cautious about the tech available to the hospitality industry. Anyone interested in reviewing the 2024 Restaurant Technology Outlook report can click here to gain access.

Among the report’s insights are the identification of a number of challenges operators face when it comes to tech decisions. The most-significant barrier is still pricing, with 37 percent of NRN survey respondents saying hardware comes with high costs. Further, 30 percent think there’s not enough transparency surrounding additional fees.

There’s also an interesting perception as regards features. While 33 percent of respondents feel the systems they’ve selected are light on functionality, 18 percent say their systems have functions that they don’t even use.

Thirty-two percent of survey respondents identify a lack of knowledge of systems as a barrier to adopting new tech solutions. In some good news, just ten percent of respondents say systems are too difficult to use. Still, ten percent of our industry is a significant number.

Combined, 87 percent of those surveyed will either possibly (24%), probably (33%), or definitely (30%) invest in tech in 2024. That’s an impressive number.

However, 39 percent of respondents were “definitely” going to invest in tech in 2023. That’s a drop of nine percent.

Here to Help

When we at KRG develop a tech stack for a client, it’s with their specific project and needs in mind.

And while we do have preferred partners, we present multiple options. Moreover, each option comes with a synopsis of features and a justification for its inclusion.

If a preferred partner isn’t the best option or the client wants to choose something else, we support that decision. Tech is challenging enough already without being steered toward specific platforms for no other reason than, “We like this one.” These decisions aren’t about us, they’re about what’s best for our clients.

At the end of each tech-stack plan are estimated costs for each option. We include the onboarding fees, monthly fees, and the annual cost. Again, these are close estimates as modules, additional features and hardware like handhelds, and subscriptions can increase or reduce the overall cost.

The hospitality industry tech landscape is transforming from a barren desert to a thriving wetland. KRG Hospitality is here to help you navigate this complex terrain.

Image: z yu on Unsplash

IRS Proposes New Tip Reporting Program

by David Klemt

The Internal Revenue Service is proposing a voluntary tip reporting program which they’re calling the Service Industry Tip Compliance Agreement (SITCA).

Making the announcement via Notice 2023-13 back in February, the IRS is giving people the chance to comment on the SITCA proposal.

Per the IRS, their intention is to “take advantage of advancements” in POS, scheduling, and e-payment technology. How do they intend to leverage all this tech? In short, the IRS is proposing that POS systems will have to process payments and tips in the same way.

To clarify further, if someone pays by credit card, they’ll have to tip via credit card. If a guest pays in cash, they’ll have to tip in cash. So, should SITCA become the industry standard, the days of paying with a credit card but leaving a cash tip will be over.

However, in my eyes, this isn’t a simple “modernization” of IRS processes.

If the IRS is proposing a new for businesses to process tips, they’re looking to catch non-compliant businesses and tipped workers. A likely culprit or contributing factor to this IRS scrutiny? The retail venues now asking for or suggesting tips when customers check out.

So, it would be wise to reiterate to your team the need to report tips accurately. And remember, business owners need to ensure they’re complying with tip reporting as well. Getting flagged for inaccurate reporting is a great way to catch an audit, penalties, and a huge bill.

Nuts and Bolts

According to the IRS, SITCA will reduce taxpayer burdens. And, of course, the service claims the program will also reduce their own administrative costs.

Additional “features,” per the IRS website, are as follows:

The monitoring of employer compliance based on actual annual tip revenue and charge tip data from their point-of-sale system. There will be allowance for adjustments in tipping practices from year to year.
Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year. This reduces the need for compliance reviews by the IRS.
Employers participating in SITCA will receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.
Participating employers have flexibility to implement employee tip reporting policies best suited for their employees and business model. Policies must be in accordance with the section of the tax law that requires employees to report tips to their employers.

Requests for Comment

Interestingly, Notice 2023-13 contains a request for comments in four specific areas:

By what means a technology-based time and attendance system may be used by tipped employees to report tips. This includes tips in cash and other forms of tipping made through electronic payments methods (other than a credit card), regardless of whether the tips are received directly from customers or through tip sharing arrangements.
How tip sharing practices vary across service industries and how the SITCA program can support employer participation while accommodating potential differences in Federal, state, and local labor and employment law requirements.
By what methods employers of large food or beverage establishments participating in the SITCA program may meet their filing and reporting obligations under section 6053(c) and also satisfy the SITCA program requirements for compliance, while minimizing the administrative burdens on taxpayers and the IRS.

Those interested in providing such feedback have until May 7, 2023 to do so. The IRS has set up two ways to provide comments on Notice 2023-13:

Mail: CC:PA:LPD:PR (Notice 2023-13), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044; or
Electronic: Visit the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and Notice 2023-13) and follow the instructions for comment submission.

Personally, I have more questions than comments. Bear in mind, the IRS will stop accepting comments, feedback, and questions on May 7, 2023.

Image: Jon Tyson on Unsplash