Restaurant owners open their monthly P&L reports, look at the sales and then move down to the bottom and close the report.
Sound familiar?
It may be a perfectly accurate report, but when you only look at those two numbers, it leaves most of its worth on the table.
A well-designed restaurant bookkeeping system should not increase the dependence of the owners on accountants. They should be more confident in their own financials. You don’t need to know all accounting rules or have to spend hours completing invoices. It’s essential to know what caused the change in profit and what transpired with food and labor and which areas require focus next week.
Bookkeeping Chef is a software which automatizes bookkeeping, so owners can spend more time doing other things and receive better financial reports.
You Should Start By Looking at Weekly Numbers and Not Just Month-End
Restaurants don’t run on an annual basis. Managers plan the labor for the week. The chef orders food today. Vendors change prices now.
Bookkeeping Chef’s weekly prime-cost reports are published alongside the financial statements for the month.
The main cost is a combination of cost of labor and the purchase of goods as well as the cost of labor. These are two areas in which a restaurant can achieve rapid growth. Bookkeeping Chef’s supplied information notes that prime costs usually comprise about 60% of the sales at restaurants.
Imagine a situation in which sales are barely changing however, the cost of prime services are growing. The percent by itself does not answer the question. This gives the owner an excuse to do some investigation.
Did you notice an increase in the amount of time was worked? Was there overtime? Was the cost of food fluctuating? A vendor’s invoice was unusually high. Did you notice any changes in your sales mix?
It’s far more beneficial than finding the same problem several weeks later.
Automate the repetitive work
The DIY bookkeeping process doesn’t have to be limited to manually transposing POS numbers into spreadsheets.
Modern bookkeeping automation in restaurants can handle a significant portion of the routine transfer of financial information. The service connects POS systems and QuickBooks, vendor platforms as well as recipe management and inventory management, and payments instruments.
Automation is not the goal.
This is done to reduce the manual data entry. Also, it keeps current financial records so that owners can focus on reviewing information, rather than collecting it.
It creates a completely different bookkeeping model for restaurant establishments. Technology takes care of the mechanical aspects while the proprietor is involved in the financial aspect.
Ask more questions about P&L
A P&L is less daunting when you stop treating it as an accounting test.
Start by reviewing the number of sales. Begin with sales. Compare the food and beverage industry’s performance. Analyze the costs of labor. Look at labor.
And, most importantly, compare times.
If profit increased but sales rose, wasn’t, something else between those two lines occurred. If the cost of food increased, ask what happened operationally. Examine sales and staffing levels to see if the labor percentage has changed. Find any data that seems odd, instead of assuming a restaurant had a bad week.
Bookkeeping Chef provides monthly P&Ls that are completed in five business days. This gives owners the opportunity to evaluate the performance of their business, rather than getting financial statements long after the operational period is completed.
Understanding is more important than speed for those searching for bookkeeping solutions in restaurants.
It’s not required to make everything.
There’s a compromise between delegating the entire financial functions to someone else and being your own bookkeeper full-time.
Owners can remain in the loop without manually completing every accounting task.
This could mean making use of automated system connections to maintain information flow by reviewing a weekly prime-cost report, analyzing the monthly P&L and posing queries whenever something happens unexpectedly.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
It is highly unlikely to find an accountant that can do all the duties.
It’s an owner who can sit down with an P&L and engage in a thoughtful discussion on the business.
The goal of financial independence isn’t just to write additional reports, but to be able to live a life of financial freedom.
Restaurants create a lot data. A different dashboard might not be beneficial.
Real value occurs when an operator is able to open the P&L report, be aware that there is a change, and then review the reports on prime costs.
Bookkeeping Chef’s method is a combination of financial support for restaurants weekly reporting and automated bookkeeping for restaurants to accomplish this.
Automate repetitive tasks. Review the prime cost each week. Learn to understand the language of your P&L.
It’s not necessary to become an accountant.
Restaurant owners who are aware of the financial aspect of their restaurant will be able make better choices.
