The restaurant owner looks at the sales and then at the bottom line before closing the report.
Sounds familiar?
The report may be perfectly exact, but if those are the only two figures reviewed, most of its value is being left unreviewed.
Bookkeeping for restaurants that is efficient shouldn’t leave proprietors more dependent on an accountant. It should help them become more confident in their own numbers. You don’t have to know each accounting rule, or spend nights entering invoices. It’s important to understand the reason for the fluctuation in profits in relation to the labor and food items and which issues require focus next week.
Bookkeeping Chef’s philosophy is to automate tasks in bookkeeping that don’t require the time of restaurant owners, while providing the restaurant owners with better financial data they can utilize.
Start With the Weekly Numbers Don’t Just Focus on Month-End
Restaurants do not operate on per month. Managers schedule labor for the week. Chef orders food today. Vendors change prices now.
The weekly reports on Bookkeeping Chef’s prime-cost report are provided alongside the financial statements for the month.
Prime cost brings together the cost of goods sold as well as labor. These are two main areas that can be swiftly moved in restaurants. According to the data from Bookkeeping Chef, prime costs account for around 60% of sales in restaurants.
If sales haven’t changed much however, the cost of prime increases. That percentage alone doesn’t provide the answer. It provides the person with an incentive to look into the issue.
Did the hourly rate increase? Was there overtime? The cost of food increased? An invoice from a vendor appeared unusually large? Did sales mix changes?
This is much more valuable than finding the same problem two weeks later.
Automate repetitive work
DIY bookkeeping isn’t limited to manually transferring POS figures into spreadsheets.
Modern bookkeeping automation in restaurants can handle much of the repetitive movement of financial data. The service is able to integrate systems such as POS, QuickBooks payroll, vendor platforms, and inventory management.
The aim is not to automate for its own sake.
This helps to cut down on the amount of manual data entry. This also helps keep accounts of financial transactions up to date so that the owners are able to focus on reading information rather than gathering it.
This creates a new model of bookkeeping for restaurants. The technology takes care of more of the mechanics, while the owner remains involved with the financial implications.
You can ask better questions about P&L
A P&L will be much more manageable when you don’t treat it as an accounting exam.
Start with sales. Examine the costs needed to make the sales. Compare the food and beverage performance. Consider the labor. Reduce your operating costs.
In addition, it is important to compare timeframes.
If sales increase but profits don’t, there is a change between the two. What changed in the operation if food costs increased. Examine sales and staffing levels to see if the labor percentage has changed. Examine if the number appears odd, rather than thinking that the restaurant experienced a bad period.
Bookkeeping Chef gives monthly P&Ls that can be completed in five days. Business owners can look over the financial performance of their business without waiting for months to receive financial statements.
For restaurant owners who require bookkeeping solutions, speed is a must but understanding is the main aim.
It’s not required to make everything.
There is a middle ground between delegating the entire financial functions to someone else and becoming your own bookkeeper full-time.
It is possible to become a business owner without performing every accounting task by hand.
This could mean the use of automated system connections in order to keep information flowing by reviewing a weekly prime-cost report, looking at the monthly P&L and posing questions whenever something happens unexpectedly.
Specialized restaurant bookkeeping services could aid in this process by maintaining the book’s structure while helping the owner understand what the reports mean.
It does not mean the bookkeeper is capable of performing all bookkeeping functions.
An owner is someone who can talk to a P&L about the business.
The goal is Financial Independence not More Reports
Restaurants create a lot data. A dashboard doesn’t always make sense.
Real value occurs the moment an operator opens the P&L report, be aware that there has been a shift and then examine the reports on prime costs.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate repetitive tasks. Check your prime costs every week. Study the language used in your P&L.
You don’t have to be a professional accountant.
Restaurant owners who are aware of the financial aspects of their own establishments will be able make better choices.