Restaurant owners open their monthly P&L reports, look at sales, then scroll down to the bottom and close the report.
Does it sound familiar?
It might be a completely complete report, however in focusing on just two figures, it leaves the majority of its value on the table.
It shouldn’t make them more dependent on a accounting firm. It should give them confidence in their own numbers. You don’t have to be an expert in accounting, or to spend in the dark completing invoices. It is important to know the reason why profits moved, what happened to the cost of food and labor and which issues require focus next week.
Bookkeeping Chef’s ethos is to automate bookkeeping chores that do not require the attention of restaurant owners while also providing the restaurant owners with better financial data they can use.
Begin with the Weekly Numbers Start with the Weekly Numbers, Not just Month-End
Even though restaurants do not operate in a calendar month, they are still required to maintain a P&L. This week, the managers plan their work. Chef orders food today. Vendors change prices now.
The weekly reports on Bookkeeping Chef’s prime-cost report are provided alongside the monthly financial statements.
Prime cost is the sum of two key areas that can be swiftly moved in a food service establishment: cost of goods that are sold, as well as labor. The information supplied by the Bookkeeping Chef shows that prime costs usually represent 60 percent of sales in restaurants.
Suppose sales have barely changed and the prime cost has increased. This percentage doesn’t provide an answer. It gives the owner a reason to do some research.
Did hourly wages grow? Did overtime occur? Was the cost of food increased? Was a vendor invoice unusually high? Did sales mix changes?
This is a lot more helpful than discovering the same issue two weeks later.
Automate repetitive work
Self-bookkeeping doesn’t mean manually transferring POS numbers into spreadsheets.
Modern restaurant bookkeeping automation can take care of a large portion of the routine flow of financial data. The service connects POS systems such as QuickBooks, QuickBooks, vendor platforms, recipe and inventory management, and payments instruments.
The aim is not to automate for its own sake.
It is to reduce manual data entry, and keep financial records current enough that the owner can spend time looking over data instead of gathering it.
It provides a completely new bookkeeping system for restaurant establishments. Technology manages the mechanics and the restaurant owner remains engaged with the financial aspects.
You can also ask more questions about P&L
When you stop treating a P&L as a type of test, it will become less daunting.
Start by analyzing the sales. Start with sales. Compare the performance of drinks and food. Analyze the costs of labor. Continue to reduce your operating expenses.
More importantly, compare periods.
If the sales rise but the profits don’t, there is an alteration between the two. If the cost of food was up, you should ask about the changes operationally. Check sales and staffing to see if the labor percent has changed. Investigate any numbers that seem odd rather than just assuming that a restaurant has had a bad week.
Bookkeeping Chef will send monthly P&Ls within five working days. This allows owners to view recent performance without waiting for financial statements which typically arrive months after the close of an operating period.
Speed is essential, but the aim is to comprehend.
It’s not required to make everything.
There’s a middle-ground between delegating the entire financial function to someone else and having your own full-time bookkeeper.
The owner is able to remain active without having to perform every accounting task.
This could mean connecting to automated systems to ensure that information is flowing, reviewing a weekly prime-cost report, or studying the monthly P&L and posing questions when something moves unexpectedly.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
This does not mean that the bookkeeper will be able to perform every bookkeeping task.
An owner can engage in a dialogue with an P&L regarding the business.
The Goal Is Financial Independence, Not More Reports
Restaurants already generate massive amounts of data. A dashboard doesn’t always make sense.
If an operator is able to examine the weekly report on prime costs and discover that something has changed, they can then access their P&L to find out what is in need of further analysis.
Bookkeeping Chef s approach incorporates restaurant accounting automation, weekly reports, monthly P&Ls, and the provision of financial support for specific restaurants to make this possible.
Automatize repetitive tasks. Review prime cost every week. Know the language that is used within your P&L.
You don’t have to become an accountant.
It is crucial to know the financials of your restaurant before you are able to become the proprietor.