A restaurant owner opens the monthly P&L, looks at sales, skips down to the bottom line and closes the report.
Are you familiar with the situation?
It may be an extremely precise report, but when you only look at those two numbers, it leaves most of its worth to be debated.
Good restaurant bookkeeping shouldn’t make owners more dependent on an accountant. They should be more comfortable with their own numbers. It’s not necessary to spend in the dark putting together invoices or master every accounting rule. It is important to know what caused the change in profit in relation to labour and food and which areas require consideration next week.
Bookkeeping Chef is a computer program that makes bookkeeping easier, meaning the owners can focus working on other tasks while receiving better financial reports.
It is recommended to begin by looking at Weekly Numbers and Not Just Month-End
Although restaurants do not operate within a calendar month they do require a P&L. This week, the managers plan their schedules. Chefs order food today. Vendors change prices now.
This is the reason Bookkeeping Chef provides weekly prime-cost flash reports, along with monthly financial statements.
Prime cost combines the costs of selling goods and labor. These are two main areas that are able to move quickly in a restaurant. The information provided by the Bookkeeping Chef indicates that prime costs usually comprise about 60% of sales in restaurants.
Let’s say sales have not changed at all, but prime cost rises. The percentage doesn’t give the solution. The owner has an opportunity to conduct some study.
Was there an increase in the hours working? Did you have an overtime? Did food costs change? Did a vendor invoice seem excessively high? Did you notice any changes in your sales mix?
This is much more helpful than having the same issue two weeks later.
Automate repetitive tasks
DIY bookkeeping doesn’t have to be done manually by transferring POS (point of sale) totals onto spreadsheets.
Modern restaurant bookkeeping automation is able to take care of a large portion of the repeated transfer of financial information. The service connects POS systems and QuickBooks, vendor platforms, recipe and inventory management, and payment instruments and AP.
Automating solely for the sake automating is not the main goal.
The goal is to eradicate the manual entry of data, and to ensure that financial records are kept up-to date so that owners are able to spend more time looking over the information instead of assembling it.
It creates a completely different bookkeeping process for restaurant establishments. Technology takes care of the mechanical aspects while the proprietor is involved in the financial side.
P&L Questions: Find out to Ask Better Questions
If you stop thinking of a P&L as a test it will become less daunting.
Start with sales. Examine the costs that are required to generate the sales. Compare food and beverage performance. Look at the cost of labor. See the work.
Comparing periods is important.
If sales increase but profits do not, there is a difference between them. What happened when food prices increased? Check the levels of staffing and sales activities if labor percentages changed. Check if the percentage seems odd, rather than assuming that the restaurant went through an unfavorable time.
Bookkeeping Chef gives monthly P&Ls that are finalized in five days. Owners are able to review the performance of their business without waiting for months before receiving financial statements.
Speed is important, however the goal is to understand.
It’s not required to make everything.
There is a middle ground between outsourcing the entire financial function to someone else and establishing yourself as your own full-time bookkeeper.
It is possible to become a business owner and not be required to complete every accounting task manually.
It could be as simple as utilizing automated system connections in order to ensure that the information is flowing. Or it could be as extensive and intricate a study of the monthly P&L or even a review of a weekly Prime-cost Report.
Bookkeeping services for restaurants that are specialized in restaurant bookkeeping can help proprietors comprehend the significance of reports by arranging the books and keeping them organized.
It is highly unlikely to have one who can carry out all the functions.
The owner should be able to take a seat with a P&L and have a stimulating conversation about the business.
The objective is financial freedom without reporting
Restaurants already produce huge amounts of data. Another dashboard might not be beneficial.
The true value is when an operator can look at a weekly prime-cost report and notice that something changed, then access the P&L and understand the next steps to take.
Bookkeeping Chef’s strategy combines restaurant accounting automation, daily reports, monthly P&Ls, and special financial assistance for restaurants, making this feasible.
Automatize repetitive tasks. Check your top costs each week. Learn the language used in your P&L.
You don’t need to be an accountant professional.
You should be an owner who is aware of the financials of your own restaurant.