A restaurant owner opens the monthly P&L examines sales, skips down to the bottom line and then closes the report.
Do these sound like familiar to you?
If just those two numbers are examined the true value of the report is not realized.
A good bookkeeping system for restaurants shouldn’t make owners more dependent on an accountant. It should help them become more confident in their own numbers. You don’t need to be an expert in accounting, or to spend the night entering invoices. However, you must understand the reasons why profit fluctuated in relation to food and labor costs and what questions need the attention of next week.
Bookkeeping Chef is a software which automatizes bookkeeping, so owners can spend more time working on other tasks while receiving more precise financial reports.
Start With the Weekly Numbers, Not Just Month-End
A monthly P&L is crucial, but restaurants don’t operate monthly. Managers schedule labor for the week. The chef is ordering food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on the top costs, together with monthly financial reports.
Prime cost is the sum of the cost of goods sold as well as labor two major sectors that can quickly move in the restaurant. Based on the information provided by Bookkeeping Chef, prime costs make up around 60% of restaurant sales.
Let’s say sales have not changed at all however the price of prime is increasing. This number does not give an answer. It gives the owner a reason to do some research.
Has the hourly wage increased? Did there occur overtime? The cost of food changed? An invoice from a vendor appeared unusually big? Are there any changes in the sales mix?
That is far more useful than discovering the same issue several weeks later.
Automate repetitive tasks
DIY bookkeeping does not need to be a manual process of transferring POS (point of sale) totals onto spreadsheets.
Modern bookkeeping automation for restaurants can handle a significant portion of the repetitive flow of financial data. The service is able to connect systems like POS Payroll, QuickBooks, POS, vendor platforms, inventory and recipe management as well as payment and AP tools.
The purpose is not to automate to achieve its own ends.
This reduces the amount of manually entering data. Additionally, it keeps accounts of financial transactions up to date so that the owners have time to spend looking over information instead of gathering 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.
You can also ask more questions regarding P&L
Stop taking your P&L as if it were an accounting test.
Begin by looking at the sales. Next, look at the cost of production. Compare the food and beverage performance. Look at the cost of labor. Examine labor.
And, most importantly, compare times.
Something that lies between these two lines has changed if sales have increased but the profits haven’t. What changed when the cost of food rose? Check the levels of staffing and sales activities if the labor percentages changed. Examine any figures that appear unusual, instead of just thinking that the restaurant experienced a poor week.
Bookkeeping Chef delivers monthly P&Ls on five working days. This lets the owners look at recent performance without waiting for financial statements, which are often received months after the close of an operating period.
For those who are looking for bookkeeping restaurant solutions, speed is useful but understanding is the more important purpose.
It’s not necessary to do everything.
There is a middle ground between handing the entire financial function to someone else and having your own bookkeeper full-time.
Owners can still be involved in the process of accounting without being required to do every job by hand.
It could be as simple as using automated system connections to ensure information flows, reviewing a weekly prime-cost report, or studying the monthly P&L, and asking questions in the event of an unexpected change.
The services of specialized restaurant bookkeeping can aid in this process by maintaining the book’s structure and helping the restaurant owner know what the reports mean.
However, this does not mean the owner will be in a position to complete all bookkeeping tasks.
A business owner can talk to a P&L regarding the business.
The goal is financial security, not more reports
Restaurants already generate massive amounts of data. The other dashboards aren’t necessarily useful.
The most valuable thing is when an operator can look at the weekly report of prime cost and notice that something occurred, then open the P&L and determine the next steps to take.
Bookkeeping Chef’s strategy includes automated bookkeeping for restaurants daily reporting along with monthly P&Ls and the financial support for specific restaurants for making this possible.
Automate the repetitive work. Check your prime costs every week. Be aware of the language that is used in your P&L.
There is no need to be an accountant professional.
You should be a successful owner who knows the financial story of your own restaurant.