Restaurant owners open their monthly P&L reports, and look at sales, then go down to the bottom of the report and close the report.
Do these sound like familiar to you?
It could be an amazingly precise report, but in focusing on just two figures, it leaves the majority of its worth to be debated.
It shouldn’t cause them to become more dependent on an accounting company. They should feel more confident about their numbers. It’s not required to sit the night completing invoices or know every accounting rule. You should know how profit has changed as well as what’s changed with food and labor costs, and what questions should be answered next week.
Bookkeeping Chef is a program that automates bookkeeping, so the owners can focus on other things while getting more precise financial reports.
Begin with the Weekly Numbers, Not Just Month-End
Even though restaurants do not operate according to a calendar, they still need to have an P&L. The managers schedule the labor for the week. The chef has ordered food for today. Vendors change prices now.
The Bookkeeping Chef’s weekly reports on prime costs are available alongside the monthly financial statements.
Prime cost is the sum of two key areas which can be quickly relocated in a food service establishment: the cost of goods sold and labor. According to the data provided by Bookkeeping Chef, prime costs account for around 60% of the sales at restaurants.
Imagine that sales barely grew, yet the cost of production increased. The percent by itself does not offer the answer. This gives the owner an excuse to do some digging.
Have the hourly wages increased? Did overtime occur? Costs of food changed? A vendor’s invoice appeared to be unusually large? Did you notice any changes in your sales mix?
It is better to discover the issue earlier rather before it gets worse.
Automate the repetitive work
Bookkeeping for DIY isn’t just about manually transferring POS numbers into spreadsheets.
Automating the restaurant’s bookkeeping process can help eliminate routine data movement. This service can be connected to POS systems, QuickBooks, vendors platforms Recipe and inventory management, Payment instruments/AP.
Automation isn’t the only goal.
The aim is to reduce manual data entry, and ensure that financial records are up-to-date so that the owners are able to spend more time reviewing the information instead of assembling 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.
Learn to ask the P&L Better Questions
Stop taking your P&L as something that could be an accounting test.
Begin with sales. Examine the costs that are required to generate those sales. Compare the food and beverages performances. Study the cost of labor. Reduce your operating expenses.
Check out the various periods.
When sales improve but profits aren’t, it is a change between the two. If food prices increased, inquire about what changed operationally. If the labor rate changed in the past, look at sales and staffing activity. If you notice a strange number examine it instead of thinking the restaurant simply had poor month.
Bookkeeping Chef will send monthly P&Ls in five days. This allows owners to review recent results without having to wait for financial statements, which usually arrive months after the close of an operating time.
If you are a restaurant owner looking for bookkeeping solutions, speed is important however understanding is the greater aim.
DIY Doesn’t Mean Doing Everything Yourself
You can find a middle between having someone handle your entire financial functions and having your own personal accountant.
Owners are still able to participate in the process of accounting without having to perform every task manually.
The process could be as simple as using automated system connections to ensure that the information is flowing. It could also be as complex and involved review of the month’s P&L or a review of the weekly Prime-cost Report.
Specialized restaurant bookkeeping services can assist in organizing the books while helping the owner comprehend what the reports are saying.
The result is not an owner who is skilled enough to do every bookkeeping function.
An owner can engage in a dialogue with the P&L regarding the business.
The aim of financial independence is not to produce more reports, but to achieve financial freedom
Restaurants already generate enormous amounts of data. Another dashboard isn’t automatically useful.
If an operator has the ability to take a look at their weekly prime cost report and discover that something has changed, they can then access their P&L to look into what’s required for more investigation.
Bookkeeping Chef’s approach incorporates financial support for restaurants, daily reporting, and automated bookkeeping in restaurants to achieve this.
Automate repetitive tasks. Review the prime cost each week. Be aware of the language that is used in your P&L.
It’s not necessary to become an accountant.
It is essential to be aware of the financials of your restaurant before you take over as the owner.
