The owner of a restaurant opens the monthly P&L examines sales, then skips to the bottom line, and then closes the report.
Sound familiar?
It could be an amazingly exact report, but just by examining two numbers, it leaves a lot of its worth to be debated.
Good restaurant bookkeeping shouldn’t make owners more dependent on an accountant. They should be more confident with their own numbers. It doesn’t require an accounting expert or spend at night filling out invoices. You do need to understand why profit moved in relation to food and labor costs, and which questions deserve consideration next week.
Bookkeeping Chef’s ethos is to automate tasks in bookkeeping that do not require the attention of restaurant owners, and provide users with better financial information that they can make use of.
Don’t stop at month-end Numbers. Start with the Weekly Numbers
Although restaurants do not operate on a calendar month, they still need to have a P&L. This week, the managers plan their work. The chef ordered food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on the top costs, along with monthly financial statements.
Prime cost is the sum of two major areas that are easily relocated in a food service establishment: the price of the food that are sold, as well as labor. The information provided by the Bookkeeping Chef shows that prime costs generally account for 60 percent of sales at restaurants.
Imagine that sales barely grew, yet the cost of production increased. The percentage alone does not give the answer. This gives the owner an opportunity to conduct some research.
Is the hourly wage increasing? Was there overtime? Was the cost of food fluctuating? Did a vendor invoice seem unusually high? Did sales mix changes?
This is much better than finding the same problem two weeks later.
Automate the repetitive Work
Self-bookkeeping doesn’t mean manually transferring POS figures into spreadsheets.
Modern restaurant bookkeeping automation is able to handle much all the repetitive flow of financial data. The service is able to connect systems like POS, QuickBooks, payroll, vendor platforms inventory management and recipe management and tools for AP/payment.
The purpose is not to automate for its own sake.
It’s to cut down on manual data entry and keep the accounting records up to date so that owners can spend their time reviewing data rather than creating it.
This creates a new model of bookkeeping in restaurants. The software takes care of more of the mechanical aspects, but the owner remains involved with the financial implications.
Learn to ask the P&L Better Questions
A P&L will be much more manageable when you stop thinking of it as an accounting test.
Begin with sales. Then look at the costs that are required to generate those sales. Compare the food and beverage performances. Study the cost of labor. Examine labor.
Compare periods.
If the sales increased, but the profit did not, something in between those two lines changed. What happened when food prices increased? Compare staffing with sales to determine if the labor percentage has changed. Find out if a figure seems odd, rather than thinking that the restaurant experienced a bad period.
Bookkeeping Chef provides monthly P&Ls finalized within five business days. This gives owners the opportunity to evaluate recent performance rather than receiving financial statements long after the operating period has passed.
Speed is important, but the goal is to understand.
It’s not necessary to DIY everything.
It is not necessary to be your own full-time bookkeeper If you’d like to avoid giving the entire accounting responsibility to another person.
Owners can still be involved in the process of accounting without needing to complete every task by hand.
This may mean using automated systems to maintain information flow, looking over an annual P&L and weekly reports regarding prime expenses, or asking questions if something unexpected occurs.
Specialized restaurant bookkeeping services could assist in organizing the books and assisting the owner to understand what the reports mean.
It’s not an owner who can do every bookkeeping function.
The owner should be able to sit down with the P&L and engage in a thoughtful discussion about the company.
The Objective Is Financial Independence, Not More Reports
Restaurants create a lot data. A different dashboard won’t be as effective.
The true value is when an operator is able to look at a weekly prime-cost report and see that something has changed, then open the P&L and determine the next steps to take.
Bookkeeping Chef’s method incorporates restaurant accounting automation, weekly reports, monthly P&Ls, and the provision of financial support for specific restaurants to make this process possible.
Automate repetitive work. Review the prime cost each week. Understand the language employed within your P&L.
You don’t need to be an accountant professional.
You should be an owner who is aware of the financial story behind your own restaurant.