The owner of a restaurant opens the monthly P&L then looks over sales, then jumps to the bottom line, and then closes the report.
Does this sound familiar to you?
The report may be perfectly precise, but if these are the only two numbers being reviewed the bulk of its value is being left on the table.
Good restaurant bookkeeping shouldn’t make owners more dependent on an accountant. It should make them more comfortable with their own financials. It is not necessary to be aware of every accounting rule or be a slave to invoices for hours. However, you must understand how profit moved in relation to food and labor costs and what questions need focus next week.
Bookkeeping Chef’s philosophy is to automate bookkeeping chores which don’t take the time of restaurant owners, while providing customers with more precise financial information that they can make use of.
You must begin looking at Weekly Numbers and Not Just Month-End
Restaurants aren’t operating on per month. This week, managers plan their work. The chef has ordered food for today. Vendors change prices now.
Bookkeeping Chef’s weekly prime-cost reports are available alongside the financial statements for the month.
The principal cost includes the cost of labor and the purchase of goods and labor, two areas where restaurants can make rapid progress. The data provided by the Bookkeeping Chef reveals that prime costs typically account for 60 percent of sales in restaurants.
Suppose sales have barely changed and the prime cost has increased. This percentage does not provide an answer. It gives the owner reason to investigate.
Was there an increase in the number of hours employed? Was there any overtime? Did the price of food changed? Was the invoice of a vendor excessively high? Does the mix of sales changed?
That is far more useful than finding the same problem several weeks later.
Automate the repetitive Work
DIY bookkeeping doesn’t have involve manually transferring POS totals into spreadsheets, after service.
Modern bookkeeping automation in restaurants can take care of a large portion of the routine movement of financial data. The service connects systems including POS, QuickBooks, payroll vendors, vendor platforms inventory management, recipe and recipe management as well AP/payment tools.
Automating for the sake automated is not the aim.
This helps to cut down on the manual data entry. This also helps keep current financial records so that owners can spend time on reviewing information, rather than collecting it.
It provides a completely new accounting model for restaurants. Technology handles the mechanics and the proprietor remains involved in the financial aspect.
Learn to ask the P&L More Questions
If you stop thinking of the P&L as a test, it becomes less intimidating.
Begin with sales. Begin with sales. Compare the efficiency of drinks and food. Consider labor. Take a look at the labor.
More importantly, compare periods.
Somewhere between these two lines has changed, if sales increased but the profits haven’t. What changed in the company as food prices increased. If the percentage of labor changed between staffing and sales activity. Investigate if a number seems strange, instead of assuming that the restaurant experienced a bad period.
Bookkeeping Chef will send monthly P&Ls on five days. This allows owners to review recent results without having to wait for financial statements which usually arrive months after the conclusion of the operating period.
Understanding is more important than speed when it comes to owners searching for bookkeeping solutions in restaurants.
There’s no need to handle everything on your own by doing it yourself
There’s a middle way between delegating the entire financial responsibility to another and being your own bookkeeper full-time.
You are able to be an owner of a business without having to perform the entire accounting process by hand.
It could be as simple as making use of automated systems to manage information flow, looking over a monthly P&L and weekly reports on primary expenses and asking questions in the event that something unexpected occurs.
Restaurant bookkeeping services that specialize in restaurant bookkeeping can help proprietors comprehend the significance of reports by organizing the books and keeping them in order.
It is unlikely to get an accountant that can do all the duties.
It’s an owner who can have a conversation with the P&L and engage in a thoughtful conversation about their business.
The objective of financial freedom is not to generate additional reports, but to attain financial freedom
Restaurants already generate massive amounts of information. The other dashboards aren’t necessarily useful.
The real value comes when an operator is able to look at a weekly report on the prime cost and notice that something changed, then access the P&L and know the next steps to take.
Bookkeeping Chef’s approach to bookkeeping includes restaurant accounting automation, weekly reports, monthly P&Ls as well as the provision of financial support for specific restaurants to make this feasible.
Automate repetitive tasks. Review the prime cost each week. Learn the terminology employed in your P&L.
You don’t have to be an accountant.
It is essential to be aware of the financials of your establishment before you can become a proprietor.