The restaurant’s owner will look at the sales and then the bottom line, before closing the report.
Sound familiar?
It may be a perfectly accurate report, but by only examining those two numbers, it leaves a lot of its value on the table.
A reliable bookkeeping system for restaurants won’t make it more dependent on the owners on accountants. They should feel more confident of their financials. It doesn’t require an expert in accounting, or to spend the night entering invoices. It’s important to understand how the profit fluctuated as well as what happened to food and labor, and which questions need attention next week.
This is the premise Bookkeeping Chef’s mission: to Automate the bookkeeping task that doesn’t require a proprietor’s time and gives restaurant managers better financial information that they can use.
Don’t stop at Month-End Numbers. Start with Weekly Numbers
Even though restaurants do not operate according to a calendar, they still need to have a P&L. The managers plan the work for the week. The chef has ordered food for today. Vendors change prices now.
That’s why Bookkeeping Chef provides weekly prime-cost flash reports along with monthly financial statements.
Prime cost is the sum of price of the goods sold and labor. These are two main areas that can be swiftly moved in an establishment. According to the data from Bookkeeping Chef, prime costs represent approximately 60% of sales in restaurants.
Think about a situation where sales are barely changing however, the cost of prime services are rising. The percentage doesn’t give the answer. It gives the owner an incentive to look into the issue.
Did the hourly rate increase? Did overtime occur? Did food costs change? The invoice for a vendor was unusually high. Did you notice any changes in your sales mix?
This is much better than finding the same issue several weeks later.
Automate repetitive tasks
Bookkeeping for DIY isn’t just about manually transfer of POS figures into spreadsheets.
Modern restaurant bookkeeping automation is able to handle much of the repeated transfer of financial information. The service can connect to systems such as POS as well as QuickBooks, payroll vendor platforms inventory management, recipe and recipe management as well as tools for AP/payment.
Automatization is not the aim.
The goal is to eradicate the manual entry of data, and keep financial records up-to-date to allow owners to spend more time looking over the data instead of trying to assemble it.
This creates a new model of bookkeeping in restaurants. The technology will take care of the mechanics, while the proprietor is still involved in the financial aspects.
Learn to ask the P&L Better Questions
Stop treating your P&L as like an accounting test.
Start by looking at sales. Look at the cost that are required to generate the sales. Compare the efficiency of drinks and food. Examine the cost of labor. Look at operating expenses. and see what remains.
Check out the various periods.
Somewhere between these two lines has changed, if sales increased but the profits haven’t. Find out what happened in the operation as food prices increased. If the percentage of labor changed, compare staffing and sales activity. If the number appears odd take a look instead of assuming the restaurant simply had an awful month.
Bookkeeping Chef provides monthly P&Ls which are completed in five business days. Business owners can look over the performance of their business without having to wait for months before receiving financial statements.
Understanding is more crucial than speed when owners are looking for bookkeeping solutions in restaurants.
DIY Doesn’t Have to Mean doing everything yourself.
There’s a middle-ground between handing the entire financial responsibility to another and having your own full-time bookkeeper.
Owners can remain in the loop without manually completing each accounting task.
It could be as simple as using automated system connections to maintain information flow and analyzing a weekly prime-cost report, looking at the monthly P&L and posing questions whenever something happens unexpectedly.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
The result is not a bookkeeping owner who can accomplish every bookkeeping job.
An owner is someone who is able to have a discussion with the P&L regarding the company.
The goal of financial independence is not to produce more reports, but to attain financial freedom
Restaurants already generate enormous amounts of information. Another dashboard isn’t automatically useful.
If an operator is able review the weekly report on prime costs and see that something is different, they can then review their P&L to determine what requires additional examination.
Bookkeeping Chef’s approach to bookkeeping incorporates restaurant accounting automation, weekly reports, monthly P&Ls and specific financial assistance for restaurants to make this feasible.
Automate the repetitive work. Review your primary costs every week. Be aware of the language used in your P&L.
You don’t need to be an accountant professional.
It is crucial to comprehend the financials of your restaurant prior to when you become an owner.