The restaurant’s owner will look at the sales and then at the bottom line prior to closing the report.
Do these sound like familiar to you?
It may be a perfectly accurate report, but when you only look at those two figures, it leaves the majority of its worth left to chance.
Good restaurant bookkeeping shouldn’t make owners more dependent on an accountant. It should make them more confident in their own numbers. You don’t need to be an expert in accounting, or to spend in the dark completing invoices. It is important to know why profit moved from food and labor costs, and which questions deserve attention next week.
Bookkeeping Chef is a program which automatizes bookkeeping, so users can focus on other things while getting better financial reports.
Begin With the Weekly Numbers Don’t Just Focus on Month-End
Restaurants aren’t operating on an annual basis. Managers plan their labor for this week. The chef has ordered food for today. Vendors change prices now.
The Bookkeeping Chef’s weekly reports on prime costs are provided alongside the monthly financial statements.
The prime cost comprises two important areas that are easily transported in a restaurant establishment: the price of the food sold, and labor. The Bookkeeping Chef’s information notes that prime costs generally comprise roughly 60% of restaurant sales.
Think about a situation where sales are barely changing while the prime cost is growing. This percentage does not provide an answer. It gives the person in charge a reason to look into the issue.
Have the hourly wages increased? Did you have any overtime? The cost of food changed? An invoice from a vendor appeared unusually large? Are there any changes in the sales mix?
This is far more beneficial than locating the same issue two weeks later.
Let Automation Handle the Repetitive Work
DIY bookkeeping doesn’t need to be difficult. It can simply involve manually transfer POS (point of sale) amounts onto spreadsheets.
Automating restaurant bookkeeping can help with repetitive financial data movements. The service is able to connect systems like POS, QuickBooks, payroll, vendor platforms inventory and recipe management, as well tools for AP/payment.
Automating solely for the sake automating is not the main goal.
The objective is to stop manual data entry, and to ensure that financial records are kept up-to date to allow owners to spend more time looking over the information rather than assembling it.
This creates a new model of bookkeeping for restaurants. The technology handles more of the mechanics, while the proprietor is still involved in the financial aspects.
You can also ask more questions about P&L
Stop treating your P&L as like an accounting test.
Start by taking a look at sales. Next, look at the costs of production. Compare the food and beverages performance. Look at labor. Reduce your operating costs.
It is vital to compare periods.
If the sales increased, but the profit was not, something between the two lines occurred. What was the result when food prices went up? Examine the staffing levels and sales activity if labor percentages have changed. Investigate any numbers that seem odd, instead of assuming a restaurant had a bad week.
Bookkeeping Chef sends monthly P&Ls within five working days. This allows owners to review recent results without having to wait for financial reports that often arrive months later than the close of an operational period.
Speed is important, but it is important to know.
DIY doesn’t have to mean Self-Employing Everything
There is a middle ground between outsourcing the entire financial responsibility to another and being your own bookkeeper full-time.
Owners are still able to participate in the accounting process without needing to complete every task by hand.
It could be as simple as making use of automated system connections to ensure information flows by reviewing a weekly prime-cost report, looking at the monthly P&L and posing questions when something moves unexpectedly.
Specialized restaurant bookkeeping services could help with this by organizing the books and assisting the owner to know what the reports mean.
It does not mean the bookkeeper will be capable of performing all bookkeeping functions.
Owners who are able be able to sit down and discuss intelligently about their business and the P&L are more likely to succeed.
The goal is Financial Independence, Not More Reports
Restaurants already generate massive amounts of data. The dashboards aren’t always making sense.
Real value occurs when an operator can open the P&L report and recognize that there has been a change, and then go through the prime-cost reports.
Bookkeeping Chef’s strategy includes financial support for restaurants, daily reporting, and automated restaurant bookkeeping to achieve this.
Automate repetitive tasks. Examine your prime cost each week. Know the language that is used in your P&L.
You don’t have to be an accountant professional.
It is essential to be aware of the financials of your restaurant prior to when you take over as the owner.