The owner of a restaurant opens the monthly P&L and looks at the sales, then jumps to the bottom line, and then closes the P&L.
Are you familiar with the situation?
It may be an extremely complete report, however in focusing on just two numbers, it leaves most of its worth in the dust.
A good bookkeeping system for restaurants shouldn’t make proprietors more dependent on accountants. It should help them feel confident in their own financials. You don’t need to be an expert in accounting, or to spend your entire night completing invoices. It’s essential to know what caused the change in profit in relation to the use of labor and food and what questions require consideration next week.
Bookkeeping Chef is a program that makes bookkeeping easier, meaning users can focus doing other things and receive more precise financial reports.
It is recommended to begin by looking at the Weekly Numbers and Not just Month-End
Restaurants do not operate on per month. The managers schedule the labor for this week. The chef has ordered food for today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on prime costs and monthly financial statements.
Prime cost includes price of the goods sold and labor, two sectors that can quickly move in restaurants. The information provided by the Bookkeeping Chef shows that the prime cost typically accounts for 60 percent of sales in restaurants.
Imagine sales haven’t drastically changed however, the cost of prime increases. That percentage alone doesn’t provide the solution. It provides the owner with a reason to do some research.
Did hourly work get more expensive? Was overtime a factor? Costs of food changed? The invoice from the vendor seemed oddly large? Has the mix of sales changed?
It is better to identify the problem now than later.
Automate the repetitive work
The DIY bookkeeping process doesn’t have to be limited to manually transferring POS figures into spreadsheets.
Modern restaurant bookkeeping automation can handle a significant portion of the repeated movements of financial data. The service connects POS systems, QuickBooks, vendors platforms recipes and inventory management as well as payment instruments and AP.
The purpose is not to automate to achieve its own ends.
This reduces the time spent on manually entering data. Additionally, it keeps the financial records up-to-date so that owners can spend time on looking over information instead of gathering it.
It creates a completely different bookkeeping model for restaurant establishments. Technology takes care of the mechanical aspects and the owner stays engaged in the financial side.
You can also ask more questions about P&L
If you stop thinking of the P&L as a type of test, it becomes less intimidating.
Start with sales. Begin with sales. Compare the food and beverage performance. Consider labor. Continue to reduce your operating expenses.
Compare the different periods.
If profit increased but sales rose, wasn’t, something else between those two lines has changed. What did happen when prices for food rose? Compare the staffing levels and sales activities if labor percentages have changed. If a figure appears to be odd look into it rather than thinking the restaurant just had an awful month.
Bookkeeping Chef will send monthly P&Ls that are completed in five business days, allowing owners the chance to examine recent performance, not receiving accounts long after the operational period has passed.
Understanding is more crucial than speed for those searching for bookkeeping solutions in restaurants.
DIY Doesn’t Have to Mean Doing Everything Yourself
You can find a happy compromise between hiring someone else to take care of all your financial requirements and having your own personal accountant.
It is possible to become a business owner without performing the entire accounting process by hand.
The process could be as simple as utilizing automated system connections in order to ensure that the information is flowing. Or it could be as complicated and complex review of the monthly P&L or even a review of the weekly Prime Cost Report.
Restaurant bookkeeping services that specialize in the restaurant industry can assist owners understand the meaning of the reports by organizing the books and keeping them in order.
There is a good chance that you will find an accountant who is able to perform all the duties.
Owners who are able sit down and talk intelligently about their company with the P&L will be more successful.
The goal is financial independence and not the need for more reports
Restaurants already generate massive amounts of data. The dashboards aren’t always making sense.
Real value is when an operator can open a P&L report, and see the shift and then examine the prime-cost reports.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate repetitive work. Examine your prime cost each week. Be aware of the language employed within your P&L.
You don’t have to be a professional accountant.
It is important to understand the finances of your restaurant before you take over as the owner.