A restaurant’s owner opens the monthly P&L and looks at the sales, then skips to the bottom line and then closes the P&L.
Do you recognize the sound?
If just those two numbers are scrutinized, the report’s true value is gone.
A good bookkeeping program for restaurants won’t make it more dependent on owners on accountants. It should provide them with confidence in their own financials. You don’t have to know every accounting rule and spend nights entering invoices. It’s important to understand how the profit fluctuated as well as what happened to the labor and food items and which areas require attention next week.
Bookkeeping Chef is a program that automates bookkeeping, so the owners can focus on other things while getting better financial reports.
Start with the Weekly Numbers Instead of just the month-end
Restaurants aren’t operating on a monthly basis. Managers schedule labor this week. The chef has ordered food for today. Vendors change prices now.
This is why Bookkeeping Chef provides weekly prime-cost flash reports alongside monthly financial statements.
Prime cost is the sum of the cost of goods sold as well as labor. Both of these are major areas that can move quickly in restaurants. Based on the information from Bookkeeping Chef, prime costs make up around 60% of sales in restaurants.
Take a look at a scenario where sales aren’t changing much, but prime costs are rising. That percentage alone doesn’t provide the answer. It gives the owner a reason to investigate.
Was there an increase in the amount of time worked? Was overtime a factor? Changes in food costs? Was a vendor invoice uncharacteristically high? What changes have occurred in the sales mix?
It’s better to know about the issue sooner rather before it gets worse.
Automate repetitive work
DIY bookkeeping doesn’t need to be a manual process of transferring POS (point of sale) amounts onto spreadsheets.
Modern bookkeeping automation for restaurants can handle a significant portion all the repetitive flow of financial data. The system integrates with systems such as POS, QuickBooks payroll, vendor platforms and inventory management.
The aim is not to automate for its own sake.
It’s a way to streamline data entry and to keep financial records updated so that the owner can spend time reviewing information instead of making 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 ask better questions about P&L
A P&L is less daunting when you stop treating it like an accounting test.
Start by analyzing the sales. Next, examine the costs of production. Compare the results of beverages and food. Take a look at the labor. Examine labor.
In addition, it is important to compare timeframes.
If profit increased but sales rose, did not, something in between those two lines occurred. What changed when the cost of food increased? Examine sales and staffing levels to determine if the labor percentage has changed. Check if the percentage seems strange, instead of assuming that the restaurant went through poor times.
Bookkeeping Chef will send monthly P&Ls within five working days. This allows owners to view recent performance without waiting for financial reports that are often received months after the end of an operating period.
For restaurant owners who require bookkeeping solutions, speed is important but understanding is the more important objective.
It’s not necessary to do everything.
There is a middle ground between outsourcing the entire financial responsibility to another and being your own full-time bookkeeper.
Owners can remain active without having to perform each accounting task.
This could include automatizing systems to ensure information flow, checking a monthly P&L and a weekly report regarding prime expenses or asking questions when there is an unplanned event.
Specialized restaurant bookkeeping can help in this manner by making sure the books are in order and helping the restaurant owner know what they are.
It is highly unlikely that you’ll get an accountant who is able to perform all of the tasks.
Owners who are able be able to sit down and discuss intelligently about their business and the P&L will have more success.
The goal is financial security without reporting
Restaurants produce a lot of information. Another dashboard might not be useful.
The real value comes when an operator is able to look at a weekly report on the prime cost and see that something has changed, then open the P&L and know where to investigate further.
Bookkeeping Chef’s method incorporates financial support for restaurants, daily reporting, and automated restaurant bookkeeping to achieve this.
Automate repetitive tasks. Review prime cost every week. Learn the language of your P&L.
You don’t have to become an accountant.
You must become an owner who understands the financial story of your restaurant.