Restaurant owners open the monthly P&L then looks over sales, then jumps to the bottom line, and closes the report.
Does this sound familiar to you?
The report may be totally precise, but if these are the only two numbers being reviewed the majority of its value is being left unreviewed.
A well-designed restaurant bookkeeping system won’t make it more dependent on the owners on accountants. They should have confidence in their own numbers. You don’t have to know every accounting rule and have to spend hours completing invoices. It’s essential to know the reason for the fluctuation in profits as well as what happened to food and labor and which areas require consideration next week.
That’s the idea Bookkeeping Chef’s mission: to Automate the bookkeeping task which doesn’t require the owner’s time and gives restaurant managers more precise financial data they can actually use.
Don’t stop at Month-End Numbers. Begin with the Weekly Numbers
Although restaurants do not operate within a calendar month they do require an P&L. The managers this week plan their activities. Chefs order food today. Vendors change prices now.
This is why Bookkeeping Chef provides weekly prime-cost flash reports along with monthly financial statements.
The prime cost comprises two important aspects that can be easily relocated in a food service establishment: cost of goods sold and labor. According to data offered by Bookkeeping chef, prime costs represent approximately 60% of the sales at restaurants.
Take a look at a scenario where sales are not changing at all and the costs of primary production are increasing. The percentage alone does not provide the answer. This gives the person in charge an opportunity to conduct some digging.
Did the hourly rate increase? Did overtime happen? Was the cost of food fluctuating? The invoice from the vendor seemed oddly large? What changes have occurred in the sales mix?
This is a lot more helpful than identifying the same issue several weeks later.
Automate repetitive tasks
DIY bookkeeping does not need to be difficult. It can simply involve manually transfer POS (point of sale) totals into spreadsheets.
Automating bookkeeping for restaurants can assist with the frequent movement of financial information. The service is able to integrate systems like POS and QuickBooks payroll vendor platforms and inventory management.
Automation isn’t the only goal.
The goal is to eradicate manual data entry, and ensure that financial records are up-to-date so that managers are able to spend more time analyzing the data rather than assembling it.
It creates a completely different bookkeeping process for restaurant establishments. Technology takes care of the mechanics while the proprietor is involved with the financial aspects.
Learn to ask the P&L More Questions
Stop looking at your P&L as something that could be an accounting test.
Begin with the sales. Begin with sales. Compare the effectiveness of beverages and food. Examine the cost of labor. Reduce operating expenses and look at what’s left.
Comparing the time spans is crucial.
Something between these two lines has changed in the event that sales have been increasing, but profits have not. If food costs has increased, find out what was happening operationally. Examine the staffing levels and sales activities if the labor percentages have changed. Investigate if a number seems unusual, rather than believing that the restaurant went through an unfavorable time.
Bookkeeping Chef will send monthly P&Ls on five days. This lets the owners look at recent results without having to wait for financial statements which are often received months after the close of an operating period.
Understanding is more crucial than speed when owners are looking for bookkeeping solutions in restaurants.
DIY Doesn’t Need to Mean Making Everything You Need
There is a middle ground between handing the entire accounting function to a third party and having your own full-time bookkeeper.
Owners can continue to be involved in the process of accounting without being required to do every job by hand.
The process could be as simple as using automated system connections to ensure that the information is flowing. However, it could be as intricate and complicated studying the monthly P&L or even a review of the weekly Prime-cost Report.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
The result is not an owner who knows how to complete every bookkeeping task.
An owner is someone who can talk to the P&L regarding the business.
The aim of financial independence is not to produce more reports, but rather to be able to live a life of financial freedom.
Restaurants are a major source of data. The other dashboards aren’t necessarily useful.
The most valuable thing is when an employee can look at a weekly report on prime costs and realize that something has occurred, then open the P&L and know what to do next.
Bookkeeping Chef’s method incorporates automation of bookkeeping in restaurants daily reporting monthly P&Ls, as well as special financial assistance to restaurants in order to enable this.
Automate repetitive work. Check your prime costs every week. Learn the terminology employed in your P&L.
You don’t need to be an accountant.
It is crucial to comprehend the financials of your restaurant prior to when you become an owner.