Restaurant owners open the monthly P&L and looks at the sales, then jumps to the bottom line, and closes the report.
Do these sound like familiar to you?
It may be a perfectly precise report, but by only examining those two figures, you leave the bulk of its value to be debated.
It shouldn’t make them more dependent on a accounting firm. It should help them feel confident in their own numbers. It’s not necessary to spend long hours completing invoices, or master every accounting rule. You should know the way profit has fluctuated, what’s happened to food and labor costs and the other questions that must be answered next week.
This is the concept Bookkeeping Chef’s mission: to automate the bookkeeping tasks which doesn’t require the owner’s time. It also provides restaurant owners with more precise financial data they can actually utilize.
Begin with the Weekly Numbers Don’t Just Focus on Month-End
A monthly P&L is crucial, but restaurants don’t run monthly. Managers are able to schedule work this week. The chef is ordering food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on prime costs and monthly financial statements.
Prime cost is the sum of the cost of goods sold as well as labor. Both of these are major sectors that can quickly move in the restaurant. The data provided by the Bookkeeping Chef shows that prime costs generally account for 60 percent of sales at restaurants.
Imagine that sales have barely changed, but the prime cost rose. This percentage by itself will not offer the answer. It provides the owner with a reason to do some research.
Did the hourly wage rise? Was overtime a factor? Food prices changed? A vendor’s invoice was unusually high. Did the mix of sales changed?
This is much better than finding the same problem two weeks later.
Automate the repetitive work
Self-bookkeeping doesn’t mean manually transferring POS numbers into spreadsheets.
Automating restaurant bookkeeping can help with the frequent movement of financial information. The system integrates with systems such as POS and QuickBooks payroll vendor platforms, and inventory management.
Automating for the sake of automation is not the goal.
It’s a way to streamline data entry and ensure that the financial records up-to-date so that owners can spend their time reviewing data rather than gathering it.
That creates a different model of bookkeeping for restaurants: technology handles more of the mechanics while the owner remains engaged with the financial meaning.
P&L Questions: Learn to Ask Better Questions
If you stop thinking of a P&L as a test it will become less daunting.
Start with sales. Next, look at the cost of production. Compare the effectiveness of food and beverages. Check the cost of labor. Move down through operating expenses and then look at what’s left.
Comparing periods.
Something in between has changed, if sales increased, but profit has not. If food prices was up, you should ask about the changes operationally. If labor percentage moved by a significant amount, you can compare sales and staffing activity. Investigate if a number seems odd, rather than assuming that the restaurant went through an unfavorable time.
Bookkeeping Chef offers monthly P&Ls that can be completed within five business days. The owners are able to look over the financial performance of their business without waiting months before receiving financial statements.
Understanding is more important than speed when owners are who are looking for solutions to bookkeeping in restaurants.
There’s no need to be a pro by doing it yourself
It’s not necessary to become your own full time bookkeeper to avoid giving the entire financial responsibility over to another person.
Owners can continue to be involved in the accounting process without having to perform every task manually.
This could mean using automated systems to maintain information flow, checking the monthly P&L and weekly reports regarding prime expenses and asking questions in the event that an unexpected event occurs.
Specialized bookkeeping for restaurants can help with this method by making sure that the books are organized and helping the restaurant owner be aware of what they represent.
It is very unlikely that you’ll find an accountant who is able to perform all of the functions.
Business owners who can have a conversation about their business to the P&L are more likely to succeed.
The objective is financial freedom and not the need for more reports
Restaurants generate a lot of data. The dashboards aren’t always making sense.
Value is realized when an operator is able to open an P&L report, recognize that there was a change, and then go through the reports on the cost of prime.
Bookkeeping Chef’s method includes restaurant accounting automation, daily reports, monthly P&Ls, and the provision of financial support for specific restaurants to make this possible.
Automate repetitive tasks. Review the prime cost each week. Learn the terminology used in your P&L.
There is no need to be a professional accountant.
It is essential to be aware of the finances of your restaurant before you are able to become the proprietor.