A restaurant’s owner opens the monthly P&L, looks at sales, then jumps to the bottom line, and closes the report.
Do you recognize the sound?
The report could be completely correct, but if they are the only two figures reviewed the bulk of its value is left on the table.
A well-designed restaurant bookkeeping system will not put more restaurant owners on accountants. It should help them feel confident in their own financials. It is not necessary to be aware of every accounting rule or do a lot of work in the evenings completing invoices. It’s crucial to understand why the profit changed, what happened with the labor and food items, and which questions need consideration next week.
Bookkeeping Chef’s goal is to automate tasks in bookkeeping that do not require the attention of restaurant owners while also providing the restaurant owners with better financial data they can use.
Start With the Weekly Numbers Instead of just the month-end
Even though restaurants do not operate within a calendar month they do require a P&L. The managers schedule the labor for this week. The chef placed an order for food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on prime costs along with monthly financial statements.
Prime cost is the sum of cost of goods sold and labor. These are two main areas that can be swiftly moved in a restaurant. According to information published by the Bookkeeping Chef prime cost accounts for about 60% of the sales at restaurants.
Imagine the sales remained static, however the prime cost rose. This number does not give an answer. This gives the owner an excuse to do some study.
Did you notice an increase in the hours employed? Did you have an overtime? Was the cost of food fluctuating? Did a vendor invoice seem uncharacteristically high? Did you notice any changes in your sales mix?
This is much more helpful than having the same issue several weeks later.
Automate the repetitive work
Bookkeeping for DIY isn’t just about manually transfer of POS numbers into spreadsheets.
Modern bookkeeping automation in restaurants can manage a lot of the routine movements of financial data. The service can connect POS systems including QuickBooks, QuickBooks, vendors platforms as well as recipe management and inventory management as well as AP/payment instruments.
Automatization is not the aim.
The aim is to reduce the manual entry of data, and ensure that financial records are up-to-date so that managers are able to spend more time looking over the information instead of assembling it.
That creates a different model of bookkeeping for restaurants: technology handles more of the mechanics while the owner remains engaged with the financial meaning.
Learn to ask the P&L Better Questions
Stop treating your P&L as like an accounting test.
Start with sales. Then, take a look at costs of production. Compare the food and drink performance. Check the cost of labor. Reduce your operating expenses.
Compare the different periods.
If profit increased but sales rose, didn’t, something between those two lines was changed. If food costs increased, ask what happened operationally. Compare staffing with sales to determine if the labor percentage has changed. If a number looks strange look into it rather than thinking the restaurant just had an unlucky month.
Bookkeeping Chef will send monthly P&Ls in five working days. This allows owners to review recent performance without waiting for financial statements, which usually arrive months after the close of an operating time.
For those who are looking for bookkeeping restaurant solutions, speed is useful but understanding is the more important aim.
DIY Doesn’t Need to Mean Making Everything You Need
There’s a compromise between handing the entire accounting function to a third party and having your own full-time bookkeeper.
Owners can be still involved in the process of accounting without being required to do every job by hand.
It could be as easy as utilizing automated system connections in order to ensure that the information is flowing. It could also be as extensive and intricate review of the month’s P&L or a study of the weekly Prime-cost Report.
Services for bookkeeping in restaurants that focus in restaurants can help owners understand the meaning of the reports by arranging the books and ensuring they are organized.
It is unlikely to end up with one who can carry out all of the tasks.
Owners who can be able to sit down and discuss intelligently about their business to the P&L will have more success.
The goal of financial independence is not to produce more reports, but rather to be able to live a life of financial freedom.
Restaurants already generate huge quantities of information. Another dashboard might not prove beneficial.
The real value comes when an operator is able to open an P&L report and recognize that there has been a change and then look at the reports on prime costs.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation daily reporting monthly P&Ls, as well as restaurant-specific financial support to enable this.
Automate repetitive tasks. Check the primary cost every week. Be aware of the language that is used in your P&L.
You don’t need to be a professional accountant.
Owners who are knowledgeable about the financial aspect of their own restaurants will be able to make better decisions.