Restaurant owners open their monthly P&L reports, look at sales, then scroll down to the bottom of the report and close the report.
Do these sound like familiar?
It may be an extremely exact report, but by only examining those two numbers, it leaves most of its worth left to chance.
The proper bookkeeping of a restaurant shouldn’t force proprietors more dependent on their accountant. They should be more confident in their own numbers. It’s not necessary to spend the night completing invoices or know every accounting rule. It is important to know what caused the change in profit as well as what happened to the labor and food items and which issues require to be addressed next week.
Bookkeeping Chef is a computer program that automates bookkeeping, so owners can spend more time in other activities while receiving more clear financial reports.
Do Not Stop at the Month-End Numbers. Start by calculating Weekly Numbers
Although restaurants are not operating within a calendar month they do require a P&L. Managers plan the labor for the week. The chef placed an order for food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on costs of the day and monthly financial statements.
Prime cost is the sum of two key areas which can be quickly relocated in a food service establishment: the price of the food sold, and labor. Based on the information from Bookkeeping Chef, prime costs represent approximately 60% of restaurant sales.
Let’s say sales have not changed at all, but prime cost rises. The percentage doesn’t give the solution. It provides the person with an incentive to look into the issue.
Have the hourly wages increased? Did overtime occur? Was the cost of food fluctuating? The invoice for a vendor was unusually high. Did sales mix changes?
This is far more beneficial than having the same issue several weeks later.
Automate the repetitive work
Bookkeeping for DIY isn’t just about manually transfer of POS numbers into spreadsheets.
Modern bookkeeping automation for restaurants can take care of a large portion of the repeated transfer of financial information. The service is connected to POS systems such as QuickBooks, QuickBooks, vendor platforms, recipe and inventory management, payment instruments and AP.
The purpose is not to automate to achieve its own ends.
It is to reduce manual data entry and to keep accounting records up to date so that the owners are able to spend their time looking over data instead of assembling it.
It’s a totally new bookkeeping model for restaurants. Technology takes care of the mechanical aspects and the restaurant owner remains engaged with the financial aspects.
Ask more questions regarding P&L
When you stop treating the P&L like a test, it becomes less intimidating.
Start with the sales. Next, look at the cost of production. Compare the performance of beverages and food. Examine labor. Keep working to cut down your operating expenses.
In addition, it is important to compare timeframes.
Something that lies between these two lines has changed in the event that sales have been increasing, but profits have not. What changed when the cost of food rose? If the percentage of labor changed by a significant amount, you can compare sales and staffing activity. If you notice a strange number, investigate rather than assuming that the restaurant had an unlucky month.
Bookkeeping Chef provides monthly P&Ls that are completed in five business days. This provides owners the opportunity to look over recent results rather than receive financial statements for a long time after the operational period is completed.
Speed is crucial, but it is important to know.
You don’t have to handle everything on your own when you DIY
It’s not necessary to become your own full time bookkeeper if you want to avoid handing the complete financial responsibility over to another person.
Owners can be still involved in the accounting process, without being required to do every job by hand.
This may mean automatizing systems to ensure information flow, checking the monthly P&L and weekly reports on prime costs and asking questions in the event that something unexpected occurs.
Specialized bookkeeping services for restaurants can aid in this process by organizing the books and assisting the owner to get the meaning of the reports.
The result isn’t a owner who can do every bookkeeping function.
The owner should be able to take a seat with a P&L and have an intelligent conversation about their business.
Financial independence isn’t just to write more reports, but rather to achieve financial freedom
Restaurants already generate massive quantities of information. A dashboard may not always make sense.
When an operator has the ability to look at the weekly prime cost report and discover that something has changed, they may then open up their P&L to determine what requires additional analysis.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate repetitive tasks. Check the primary cost every week. Study the language used in your P&L.
You don’t have to become an accountant.
It is best to become an owner who understands the financial story behind your own restaurant.