Restaurant owners open the monthly P&L then looks over sales, skips down to the bottom line and then closes the report.
Does this sound familiar?
It may be a perfectly complete report, however in focusing on just two figures, it leaves the majority of its value to be debated.
A good restaurant bookkeeping system won’t make it more dependent on proprietors on accountants. It should help them feel confident in their own financials. You don’t need to know every accounting rule or be a slave to invoices for hours. However, you must understand the reasons why profit fluctuated, what happened to costs for food and labor and which issues require focus next week.
Bookkeeping Chef is an application that automates bookkeeping, so owners can concentrate in other activities while receiving better financial reports.
Start with the Weekly Numbers Don’t Just Focus on Month-End
A monthly P&L is important, however restaurants don’t run monthly. This week, managers plan their labor. Chefs ordered food this morning. Vendors change prices now.
Bookkeeping Chef’s weekly prime-cost reports are provided alongside the financial statements for the month.
The principal cost includes the cost of the goods and labor both of which are areas where restaurants can quickly progress. The data provided by the Bookkeeping Chef indicates that prime costs typically account for 60 percent of the sales in restaurants.
Imagine that sales barely changed but the cost of production increased. The percentage alone does not give the answer. The owner has an excuse to do some digging.
Did you notice an increase in the hours employed? Did overtime happen? Costs of food changed? The invoice from the vendor seemed oddly big? Did you notice any changes in your sales mix?
This is far more beneficial than finding the same problem after a few weeks.
Automate repetitive tasks
Bookkeeping for your own needs doesn’t have to involve manually transferring POS totals into spreadsheets after service.
Modern restaurant bookkeeping automation can handle a significant portion of the repeated flow of financial data. The service can connect POS systems such as QuickBooks, QuickBooks, vendor platforms as well as recipe management and inventory management, and Payment instruments/AP.
The purpose is not to automate to achieve its own ends.
The objective is to stop the need for manual data entry and to keep financial records current so that managers are able to spend more time analyzing the information rather than assembling it.
It creates a completely different bookkeeping system for restaurants. Technology takes care of the mechanics and the owner stays engaged with the financial aspects.
Ask more questions regarding P&L
When you stop treating a P&L as a test, it becomes less intimidating.
Start by looking at the sales. Then, you can look at the cost of production. Compare the performance of beverages and food. Think about the labor. Reduce your operating costs.
Comparing the time spans is crucial.
If profits increased but sales grew, but profit wasn’t, something else between those two lines was changed. If food cost increased, inquire about what changed operationally. Check the levels of staffing and sales activities if labor percentages have changed. Check if the percentage seems odd, rather than assuming that the restaurant had poor performance.
Bookkeeping Chef will send monthly P&Ls completed within five business days. This provides owners the chance to examine the performance of their business, rather than getting accounts long after the operating period has ended.
Understanding is more crucial than speed for owners who are looking for solutions to bookkeeping in restaurants.
DIY doesn’t have to mean doing everything yourself.
You don’t have to become your own full time bookkeeper in order to avoid giving the entire bookkeeping responsibility to a different person.
The owner is able to remain active without having to perform each accounting job.
This could mean using automated system connections to ensure that information is flowing, reviewing a weekly prime-cost report, or studying the monthly P&L, and asking questions in the event of an unexpected change.
Specialized restaurant bookkeeping can help with this approach by making sure that the books are organized and assisting the proprietor to comprehend what they mean.
It is very unlikely to find an accountant that can do all the duties.
An owner is someone who can engage in a dialogue with an P&L regarding the company.
The aim of financial independence isn’t just to write more reports, but to be able to live a life of financial freedom.
Restaurants generate a lot of information. Dashboards don’t always make sense.
The most valuable thing is when an operator can look at the weekly report of prime cost and realize that something has occurred, then open the P&L and determine the best way to look into it.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate the repetitive work. Review your prime cost every week. Learn to speak the language of your P&L.
You don’t have to be an accountant.
You can be a successful owner who knows the financials of your restaurant.