Restaurant owners open their monthly P&L reports, check sales, then go down to the bottom and close the report.
Are you familiar with the situation?
The report may be totally accurate, but if those are the only two figures to be reviewed, most of its value is left on the table.
A well-designed restaurant bookkeeping system will not put more the owners on accountants. It should help them become more comfortable with their own financials. It doesn’t require an accountant or stay up all your entire night completing invoices. You must understand how profit has changed as well as what’s changed with food and labor costs, and the other questions that must be addressed in the coming week.
Bookkeeping Chef’s philosophy is to automate tasks in bookkeeping which don’t take the time of restaurant owners, while providing the restaurant owners with better financial data that they can make use of.
Do Not Stop at the Month-End Numbers. Begin with the Weekly Numbers
Although restaurants do not operate on a calendar month, they are still required to maintain an P&L. Managers schedule labor this week. Chef orders food 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 two crucial aspects that can be easily moved in a food service establishment: cost of goods sold and labor. The information provided by the Bookkeeping Chef indicates that prime costs generally comprise approximately 60% of sales in restaurants.
Imagine sales haven’t drastically changed however, the cost of prime increases. This percentage isn’t an answer. It provides the person with the reason to conduct an investigation.
Was there an increase in the hours employed? Did overtime take place? Food prices changed? The invoice from the vendor seemed oddly big? What changes have occurred in the sales mix?
This is a lot more helpful than discovering the same issue several weeks later.
Automate repetitive tasks
DIY bookkeeping isn’t limited to manually transferring POS figures into spreadsheets.
Automating restaurant bookkeeping can help with the frequent movement of financial information. The service is connected to POS systems, QuickBooks, vendors platforms recipes and inventory management, Payment instruments/AP.
Automation is not the objective.
It’s to make it easier for manual data entry and to keep financial records up-to-date so that the owners are able to spend their time looking through information rather than 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
A P&L will be much more manageable when you don’t treat it as an accounting test.
Begin by looking at the sales. Next, look at the costs of production. Compare the performance of food and beverages. Check the cost of labor. Look at labor.
Comparing periods is important.
If profits increased but sales grew, but profit was not, something between the two lines was changed. If food cost increased, ask what happened operationally. Check the levels of staffing and sales activities if the labor percentages changed. Examine if the number appears odd, rather than assuming that the restaurant went through a bad period.
Bookkeeping Chef will send monthly P&Ls within five working days. This allows owners to review recent results without having to wait for financial statements, which typically arrive months after the close of the operating period.
Understanding is more crucial than speed for owners looking for bookkeeping solutions in restaurants.
It’s not necessary to do everything.
There is a middle ground between delegating all financial responsibility to another and being your own full-time bookkeeper.
You could be a part of an owner of a business without having to perform all accounting duties manually.
It could be as simple as using automated systems to maintain the flow of information, examining the monthly P&L and a weekly report on prime costs, or asking questions if something unexpected happens.
The specialization in restaurant bookkeeping can assist in this way by making sure the books are in order and helping the owner to be aware of what they represent.
It is unlikely that you’ll get a bookkeeper who can perform all of the functions.
Owners can sit down with a P&L and have a stimulating conversation about their business.
The aim is financial independence and not More Reports
Restaurants produce a lot of information. Another dashboard might not prove useful.
The true value is when an operator looks at a weekly prime-cost report and see that something has occurred, then open the P&L and figure out the next steps to take.
Bookkeeping Chef’s method combines restaurant accounting automation, daily reports, monthly P&Ls and the provision of financial support for specific restaurants to make this feasible.
Automate the repetitive work. Examine your prime costs each week. Learn the language of your P&L.
You don’t have to be an accountant professional.
Owners who are familiar with the financial aspect of their own establishments will be able to make better choices.