A restaurant’s owner opens the monthly P&L, looks at sales, skips down to the bottom line and then closes the report.
Do you recognize the sound?
The report could be completely precise, but if these are the only two numbers reviewed the bulk of its value is being put to waste.
A well-designed restaurant bookkeeping system shouldn’t increase the dependence of proprietors on accountants. They should be more confident with their own financials. There is no need to be familiar with all accounting rules or do a lot of work in the evenings completing invoices. You must understand the way profit has fluctuated in relation to food and labor costs, and what questions should be addressed in the coming week.
Bookkeeping Chef is a program that helps automate bookkeeping so the owners can focus doing other things and receive clearer financial reports.
Start With the Weekly Numbers, Not Just Month-End
While restaurants don’t operate within a calendar month they still need to have an P&L. This week, managers plan their schedules. The chef ordered food today. Vendors change prices now.
That’s why Bookkeeping Chef provides weekly prime-cost flash reports, along with monthly financial statements.
Prime cost combines the cost of goods sold and labor. These are two main areas that are able to move quickly in restaurants. The Bookkeeping Chef’s information notes that prime costs usually comprise around 60% of sales in restaurants.
Imagine sales haven’t drastically changed however, the cost of prime increases. This number does not give an answer. It gives the owner a reason to investigate.
Was there an increase in the number of hours employed? Was overtime a factor? The cost of food increased? A vendor’s invoice was abnormally high. Are there any changes in the sales mix?
This is a lot more helpful than finding the same problem several weeks later.
Automate the repetitive work
DIY bookkeeping doesn’t have to be difficult. It can simply involve manually transfer POS (point of sale) amounts onto spreadsheets.
Automating the restaurant’s bookkeeping process will eliminate repetitive data movement. The service integrates systems like POS as well as QuickBooks payroll vendor platforms and inventory management.
The purpose is not to automate to achieve its own ends.
The objective is to stop the need for manual data entry and to ensure that financial records are kept up-to date so that managers are able to spend more time looking over the data rather than assembling it.
That creates a different model of bookkeeping for restaurants: technology handles more of the mechanics, while the owner stays involved in the financial aspects.
P&L Questions: Find out to Ask Better Questions
A P&L becomes much less intimidating when you stop thinking of it as an accounting test.
Start by studying the number of sales. Begin with sales. Compare the performance of food and beverages. Think about the labor. Go through operating costs and then look at what’s left.
Comparing the time spans is crucial.
If the sales rise but the profits aren’t, there’s an alteration between them. Find out what happened within the organization in the event that food costs went up. If the labor rate changed in the past, look at sales and staffing activity. Check if the percentage seems unusual, rather than believing that the restaurant went through poor times.
Bookkeeping Chef sends monthly P&Ls with five days. This allows owners to review recent results without having to wait for financial reports that usually arrive months after the close of the operating period.
For owners searching bookkeeping restaurant solutions, speed is a must but understanding is the bigger goal.
It’s not necessary to DIY everything.
You can find a comfortable middle between having someone manage your financial needs and becoming your own accountant full-time.
You could be a part of a business owner and not be required to complete every accounting task manually.
This may mean automatizing systems to ensure information flow, reviewing a monthly P&L and a weekly report on the primary costs or asking questions when something unexpected happens.
Specialized restaurant bookkeeping services can assist in keeping the underlying books organized and assisting the owner to comprehend what the reports are saying.
There is a good chance to have an accountant that can do all the duties.
An owner is able to have a discussion with the P&L regarding the business.
The goal is Financial Independence Not More Reports
Restaurants already generate enormous quantities of data. Another dashboard may not be helpful.
The real value is when an operator looks at the weekly report of prime cost and see that something has changed, then open the P&L and figure out where to investigate further.
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. Review the prime cost each week. Learn the language of your P&L.
You don’t need to be an accountant professional.
Owners who are knowledgeable about the financial aspects of their own establishments are able to make better decisions.