The restaurant owner looks at the sales and then at the bottom line before closing the report.
Do these sound like familiar to you?
The report may be perfectly precise, but if these are the only two figures to be reviewed, most of its value is being ignored.
The proper bookkeeping of a restaurant shouldn’t force proprietors more dependent on their accountant. It should help them feel confident in their own numbers. There is no need to spend in the dark putting together invoices or know every accounting rule. However, you must understand the reason why profits moved in relation to the cost of food and labor and which issues require consideration next week.
This is the concept Bookkeeping Chef’s mission: to automate the bookkeeping work that doesn’t need an owner’s time, while providing restaurant owners with better financial information that they can actually use.
Do Not Stop at the month-end Numbers. Start with the Weekly Numbers
Restaurants aren’t operating on the basis of a monthly. Managers plan their labor for this week. The chef has ordered food for today. Vendors change prices now.
This is the reason Bookkeeping Chef provides weekly prime-cost flash reports along with monthly financial statements.
Prime cost is the sum of two major areas that are easily transported in a restaurant establishment: cost of the goods that are sold, as well as labor. According to the data published by the Bookkeeping Chef prime costs make up around 60% of the sales at restaurants.
Imagine the sales remained static, however the primary cost increased. This number does not give an answer. This gives the person in charge an excuse to do some study.
Was there an increase in the amount of time working? Was there overtime? Was the cost of food changed? The invoice from the vendor seemed oddly large? Did you notice any changes in your sales mix?
This is much more helpful than having the same issue two weeks later.
Automate the repetitive Work
Self-bookkeeping doesn’t mean manually transferring POS numbers into spreadsheets.
Automating the bookkeeping processes of restaurants can help eliminate repetitive data movements. The service can connect POS systems, QuickBooks, vendors platforms as well as recipe management and inventory management, and AP/payment instruments.
Automation is not the goal.
It is to reduce manual data entry, and keep accounting records up to date so that the owner can spend time reviewing information instead of gathering 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
A P&L will be much more manageable when you stop thinking of it as an accounting test.
Begin with the sales. Next, examine the cost of production. Compare the results of food and beverages. Study the cost of labor. Move down through operating expenses and then look at what’s left.
More importantly, compare periods.
When sales improve but profits do not, there is a difference between the two. What was the result when food prices increased? Examine the staffing levels and sales activities if the labor percentages changed. Check if the percentage seems odd, rather than assuming that the restaurant experienced a bad period.
Bookkeeping Chef offers monthly P&Ls, which are finished in five days. The owners are able to look over the company’s performance without waiting months to receive financial statements.
For those who are looking for bookkeeping restaurant solutions, speed is useful but understanding is the bigger goal.
DIY doesn’t have to mean Making Everything You Need
There is a middle ground between delegating the entire accounting function to a third party and having your own full-time bookkeeper.
The owner is able to remain in the loop without manually completing every accounting task.
That might mean using automated system connections to ensure that information is flowing, reviewing a weekly prime-cost report, or studying the monthly P&L and asking questions when something moves unexpectedly.
Restaurant bookkeeping services that specialize in catering can assist restaurant owners understand the meaning of the reports by organizing the books and keeping them organized.
The result is not a bookkeeping owner who knows how to do every bookkeeping function.
Owners who can sit down and talk intelligently about their company with the P&L are more likely to succeed.
The Objective Is Financial Independence, Not More Reports
Restaurants generate a lot of information. Another dashboard might not prove useful.
The real value is when an operator can look at a weekly report on prime costs and notice that something occurred, then open the P&L and know what to do next.
Bookkeeping Chef’s method is a combination of financial support for restaurants daily reporting, and automated restaurant bookkeeping to achieve this.
Automate the repetitive work. Examine the cost of your prime each week. Learn to understand the same language as your P&L.
There is no need to be an accountant.
It is essential to be aware of the financials of your establishment before you take over as the owner.