The restaurant’s owner examines the sales, and then the bottom line before closing the report.
Does it sound familiar?
If only these two numbers are scrutinized the true value of the report is lost.
It shouldn’t make them more dependent on an accounting company. They should feel more secure of their financials. There is no need to spend in the dark putting together invoices or know every accounting rule. It’s crucial to understand why the profit changed and what transpired with the labor and food items and which issues require focus next week.
That’s the philosophy behind Bookkeeping Chef: Automate the bookkeeping task that doesn’t require an owner’s time and gives restaurant managers clearer financial information they can utilize.
You should begin by looking at Weekly Numbers and not just month-end numbers.
Even though restaurants do not operate in a calendar month, they must still have a P&L. The managers schedule the labor for this week. Chefs order food right now. Vendors change prices now.
Bookkeeping Chef’s weekly Prime-cost reports are available alongside the monthly financial statements.
The prime cost combines the cost of labor and the purchase of goods and labor, two areas where restaurants can accelerate its progress. The data provided by the Bookkeeping Chef reveals that the prime cost typically accounts for 60 percent of sales at restaurants.
Imagine that sales barely grew, yet the cost of production increased. This number does not give an answer. It gives the owner the reason to conduct an investigation.
Was there an increase in the number of hours was worked? Was overtime a factor? Has the cost of food increased? A vendor invoice seemed unusually big? Does the mix of sales changed?
That is far more useful than finding the same problem several weeks later.
Automate repetitive work
DIY bookkeeping doesn’t need to be done manually by transferring POS (point of sale) amounts onto spreadsheets.
Modern bookkeeping automation for restaurants can manage a lot of the repetitive flow of financial data. The system integrates with systems such as POS Payroll, QuickBooks, vendor platforms, and inventory management.
Automation is not the objective.
It is to reduce manual data entry and keep the financial records up-to-date so that owners have the ability to spend time reviewing information instead of gathering 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.
Learn to ask the P&L More Questions
A P&L can be a lot less intimidating when you don’t treat it as an accounting exam.
Start by reviewing the sales. Then, take a look at costs of production. Compare the performance of drinks and food. Examine labor. Continue to reduce your operating costs.
In addition, it is important to compare timeframes.
If the sales increased, but the profit did not, something in between those two lines changed. Find out what happened in the operation if food costs increased. Check sales and staffing to see if labor percentage has changed. Investigate any numbers that seem odd, instead of assuming a restaurant had a bad week.
Bookkeeping Chef provides monthly P&Ls within five working days. This lets owners review the latest results without having to wait for financial statements, which usually arrive months after the close of the operating period.
Speed is important, but the objective is to learn.
It’s not necessary to handle everything on your own when you make it DIY
There’s a middle-ground between handing the entire financial functions to someone else and being your own full-time bookkeeper.
It is possible to become a business owner without performing all accounting tasks by hand.
That might mean making use of automated system connections to ensure that information is flowing and analyzing 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 helping the restaurant owner know what they are.
It does not mean the owner will be competent to handle all bookkeeping tasks.
The owner should be able to take a seat with an P&L and engage in a thoughtful conversation about their business.
Financial freedom is not to generate more reports, but to be able to live a life of financial freedom.
Restaurants create a lot data. A different dashboard might not be efficient.
The real value is when an operator can look at a weekly prime-cost report and notice that something was different, then look at the P&L and figure out where to investigate further.
Bookkeeping Chef’s method combines restaurant financial support, daily reporting, and automated bookkeeping for restaurants to accomplish this.
Automate the repetitive work. Examine your prime cost each week. Learn the terminology used within your P&L.
You don’t need to be a professional accountant.
It is essential to be aware of the financials of your establishment before you can become a proprietor.