Restaurant owners open their monthly P&L reports, check the sales and then move down to the bottom and close the report.
Do these sound like familiar to you?
The report may be perfectly correct, but if they are the only two numbers reviewed the majority of its value is put to waste.
A good bookkeeping program for restaurants should not increase the dependence of proprietors on accountants. It should provide them with confidence in their own numbers. You don’t have to be an accountant or stay up all at night filling out invoices. However, you must understand how profit moved, what happened to costs for food and labor, and which questions deserve attention next week.
That’s the philosophy Bookkeeping Chef’s mission: to Automate the bookkeeping process that doesn’t require an owner’s time. It also provides restaurant owners with more precise financial data they can actually use.
Do Not Stop at the month-end Numbers. Begin with Weekly Numbers
Restaurants aren’t operating on a monthly basis. Managers schedule labor for this week. Chef orders food now. Vendors change prices now.
The Bookkeeping Chef’s weekly reports on prime costs are included with the monthly financial statements.
Prime cost is the sum of costs of selling goods and labor. These are two main sectors that can quickly move in a restaurant. According to data provided by Bookkeeping Chef, prime costs make up around 60% of the sales at restaurants.
Imagine that sales barely grew, yet the price of production grew. This percentage does not provide an answer. It gives the owner reason to do some research.
Did the hourly rate increase? Did you have any overtime? Has the cost of food changed? Was a vendor invoice uncharacteristically high? Did you notice any changes in your sales mix?
This is much better than finding the same issue several weeks later.
Automate the repetitive work
DIY bookkeeping doesn’t need to involve manually transferring POS (point of sale) amounts onto spreadsheets.
Modern restaurant bookkeeping automation can handle a significant portion of the routine transfer of financial information. The system integrates with systems like POS and QuickBooks payroll vendor platforms and inventory management.
Automation isn’t the only goal.
It’s to make it easier for manual data entry, and keep financial records updated so that owners can spend their time reviewing data rather than gathering it.
This has created a new form of bookkeeping for restaurants. The system handles more of the mechanics, while the owner is still tasked in the financial aspects.
Learn to ask the P&L Better Questions
If you stop thinking of the P&L as a type of test, it will become less daunting.
Begin by studying sales. Next, examine the cost of production. Compare the performance of food and beverages. Look at labor. Go through operating costs and then look at what’s left.
More importantly, compare periods.
Something that lies between these two lines has changed, if sales increased, but profit has not. Find out what happened within the business if food costs increased. If the labor rate changed by a significant amount, you can compare sales and staffing activity. Find out if a figure seems odd, rather than assuming that the restaurant experienced an unfavorable time.
Bookkeeping Chef provides monthly P&Ls which are completed within five days. Owners can review the performance of their business without waiting months to receive financial statements.
Understanding is more crucial than speed when it comes to owners who are looking for solutions to bookkeeping in restaurants.
There’s no need to be a pro when you make it DIY
It’s not necessary to become your own full time bookkeeper to avoid handing the complete bookkeeping responsibility to a different person.
A business owner can be active without having to perform each accounting task.
It could be as easy as utilizing automated system connections to keep the data flowing. However, it could be as complex and involved review of the monthly P&L or a look at the weekly Prime Cost Report.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
It is very unlikely that you’ll find an accountant who is able to perform all the functions.
The owner should be able to sit down with a P&L and engage in a thoughtful conversation about their business.
The goal of financial independence is not to produce additional reports, but to achieve financial freedom
Restaurants already produce huge amounts of data. Another dashboard might not prove beneficial.
Value is realized when an employee can open the P&L report, be aware the shift and then examine the reports on the cost of prime.
Bookkeeping Chef’s strategy incorporates restaurant accounting automation, weekly reports, monthly P&Ls as well as special financial assistance for restaurants, making this feasible.
Automatize repetitive tasks. Examine the cost of your prime each week. Learn to understand the language of your P&L.
You don’t have to become an accountant.
You should be an owner who is aware of the financial story of your restaurant.
