19 Jan Basic Accounting Tips All Restaurant Owners Should Know
At Artisan Food Brokers & Restaurant Consultants we recognize that operating a restaurant means you have very little time between service, employee’s issues, dealing with customers, dealing with suppliers and trying to balance between work and family. As a restaurant owner, you are required to have correct and up-to-date financial information so you can make imperative positive business judgments.
See our basic five points that you can implement and take back control of your business.
Point 1: Establish your accounting records
There are the four main records that restaurant owners should keep updated and organized.
As the business owner, you should be performing a daily reconciliation of your sales and updating your accounts payable. Then there are the salary of employees and GST to take account of.
Point 2: Monitor cash flow
It takes tenacious work to keep expenses and profits balance. When it comes to cash flow management one of the most essential rules is to always have accessible money to cover urgent and due expenses. There will be times when you accept catering event (in a month’s time) and you only deal with a 10% deposit. Where do you get the money to set up the event, gather all ingredients, and fund the manpower? You have to monitor your cash flow properly to avoid lending from banks and having a bad record with suppliers.
Point 3: Track inventory costs
Keeping track of your stock involves your hands and eyes as well as a good POS. Ensure that you perform an actual count of the remaining ingredients in your stock room on a weekly basis for beverages and for a monthly basis for food.
Determine the budgeted usage and actual usage of items in your inventory, and then find out if there is variance. It could mean hundreds if not thousands of dollars to your bottom line.
Point 4: Understand you Profit & Loss Statement
As a minimum, on a weekly basis, you need to produce a summary of your sales and expenses to know if your restaurant gained or lost money. This Profit and Loss Statement document outlines two vital facets:
1. The sources of revenue, with total profit from each source recorded
2. The expenses, with each item identified (rent, tax, insurance, repairs, wages, etc.).
This report also gives an idea of the percentage taken by each item from your total weekly, monthly, or yearly revenue. Understanding this report is crucial in making business decisions, such as when deciding to roster employees, remove unpopular items in the menu, or cut down on repair and maintenance costs.
Point 5: Rely on good accounting software
As a restaurant owner, you need to admit the reality that the old-style manual accounting is uneconomical for your growing business. The quicker you appreciate this, the sooner you can lead your business to growth. Accounting software can save you a considerable time by computerizing those repetitive tasks; performing smart & precise computing of sales, expenses, and inventory; and providing many other essential functions for your easy business management.
The triumph of your restaurant business rests on having an effective back-office accounting base, a program that can take care of most of your responsibilities so you can spend more time in analyzing the business data and observing trends.
TAKE BACK CONTROL OF YOUR BUSINESS