The restaurant’s owner examines the sales and then the bottom line before closing the report.
Does this sound familiar to you?
The report may be totally precise, but if these are the only two figures to be reviewed the bulk of its value is being ignored.
This shouldn’t force them to be more dependent on an accounting firm. It should provide them with confidence in their own financials. There is no need to be familiar with every accounting rule and be a slave to invoices for hours. It is important to know what caused the change in profit as well as what happened to the use of labor and food, and which questions need attention next week.
Bookkeeping Chef is a software that makes bookkeeping easier, meaning owners can concentrate on other things while getting more clear financial reports.
Begin with the Weekly Numbers, Not Just Month-End
A monthly P&L matters, but restaurants don’t run monthly. Managers are able to schedule work this week. Chefs order food right now. Vendors change prices now.
This is the reason Bookkeeping Chef provides weekly prime-cost flash reports along with monthly financial statements.
Prime cost is the sum of cost of goods sold and labor, two areas that can be swiftly moved in restaurants. The information supplied by the Bookkeeping Chef shows that prime costs usually represent 60 percent of the sales in restaurants.
Imagine that sales barely changed but the cost of production increased. This percentage by itself will not offer the answer. The owner has an excuse to do some investigation.
Is the hourly wage increasing? Did overtime occur? Costs of food changed? A vendor’s invoice appeared to be unusually large? Did sales mix changes?
It is better to identify the problem now instead of waiting until later.
Automate repetitive tasks
DIY bookkeeping does not have to be a manual process of transferring POS (point of sale) amounts onto spreadsheets.
Automating the bookkeeping process in restaurants will eliminate routine data movement. The service can connect to systems such as POS as well as QuickBooks, payroll vendor platforms, inventory and recipe management, as well AP/payment tools.
Automation is not the goal.
It is to reduce manual data entry and to keep financial records current enough that the owner can spend time reviewing information instead of making it.
This is a completely different way of bookkeeping for restaurants. technology handles more of the mechanics, while the proprietor remains active in the financial aspect.
Learn to Ask the P&L Better Questions
A P&L can be a lot less intimidating when you don’t treat it as an accounting exam.
Begin by looking at the numbers of sales. Start with sales. Compare food and beverage performance. Look at the cost of labor. Take a look at the labor.
The importance of comparing periods.
If the sales increased, but the profit was not, something between the two lines occurred. What happened when food prices were rising? If the labor percentage changed, compare staffing and sales activity. Find any data that seems strange, rather than assuming that a restaurant has had a bad week.
Bookkeeping Chef provides monthly P&Ls in five working days. This lets owners review the latest results without having to wait for financial statements which often arrive months later than the close of an operating period.
Understanding is more important than speed when owners are seeking bookkeeping solutions for restaurants.
It’s not necessary to do everything.
It’s not necessary to become your own bookkeeper full-time If you’d like to avoid handing the complete accounting responsibility to another person.
Owners are still able to participate in the accounting process without needing to complete every task by hand.
That might mean using automated system connections to maintain information flow through, examining a weekly prime cost report, looking at the monthly P&L and posing questions in the event of an unexpected change.
Specialized restaurant bookkeeping can help in this way by making sure that the books are organized as well as helping the owner know what they are.
This doesn’t mean the owner will be able to perform all bookkeeping duties.
Owners who are able to sit down and talk intelligently about their business with the P&L are more likely to succeed.
The Goal Is Financial Independence, Not More Reports
Restaurants already produce huge quantities of information. A different dashboard won’t be as effective.
The most valuable thing is when an operator is able to look at a weekly report on prime costs and realize that something has was different, then look at the P&L and determine the next steps to take.
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. Review prime cost every week. Study the language used in your P&L.
There is no need to become an accountant.
Owners who are knowledgeable about the financial aspect of their restaurant will be able make better choices.
