A restaurant owner opens the monthly P&L then looks over sales, then jumps to the bottom line, and then closes the report.
Does this sound familiar?
It may be an extremely complete report, however by only examining those two figures, you leave the bulk of its value left to chance.
It shouldn’t cause them to become more dependent on an accounting company. It should help them become more comfortable with their own financials. It’s not necessary to spend in the dark putting together invoices or know every accounting rule. It is important to know how profit has changed, what’s happened to labor and food costs, and the issues that need to be addressed in the coming week.
This is the premise behind Bookkeeping Chef: Automate the bookkeeping task that doesn’t need an owner’s time and gives restaurant managers better financial information that they can utilize.
You must begin looking at Weekly Numbers and Not Only Month-End
Although restaurants do not operate within a calendar month they do require an P&L. Managers are able to schedule work this week. Chef has ordered food. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on prime costs along with monthly financial statements.
Prime cost is the sum of two key areas which can be quickly moved in a food service establishment: the price of the food that are sold, as well as labor. The information provided by the Bookkeeping Chef shows that prime costs generally account for 60 percent of the sales in restaurants.
Let’s say sales have not changed at all and the prime cost has increased. This percentage does not provide an answer. It gives the owner a reason to investigate.
Did hourly wages grow? Did you have overtime? Food costs changed? A vendor’s invoice was abnormally high. Have the sales mix changed?
This is much more helpful than finding the same problem several weeks later.
Automate repetitive tasks
DIY bookkeeping isn’t limited to manually transposing POS numbers into spreadsheets.
Modern bookkeeping automation in restaurants can handle much all the repetitive transfer of financial information. It integrates various systems like POS, QuickBooks payroll, vendor platforms, and inventory management.
The goal isn’t to automate to achieve its own ends.
This is done to reduce the manually entering data. Also, it keeps current financial records so that owners can spend time on reviewing information, rather than gathering it.
It is a totally different bookkeeping process for restaurant establishments. Technology takes care of the mechanics while the proprietor is involved with the financial aspects.
You can also ask more questions regarding P&L
Stop thinking of your P&L as something that could be an accounting test.
Start with the sales. Examine the costs needed to make those sales. Compare the food and drink performance. Examine the cost of labor. Look at labor.
Compare the different periods.
If profit increased but sales rose, didn’t, something between those two lines was changed. What changed when the cost of food went up? If labor percentage moved in the past, look at sales and staffing activity. Investigate if a number seems unusual, rather than believing that the restaurant was in a bad period.
Bookkeeping Chef’s monthly P&Ls are completed within five business days. This provides owners the chance to examine recent performance, not receiving financial statements for a long time after the period of operation is over.
Speed is crucial, but the goal is to understand.
It’s not necessary to DIY everything.
You can find a happy middle between having someone manage your financial needs as well as being your own full-time accountant.
Owners can be still involved in the process of accounting without having to perform every task by hand.
This could mean the use of automated system connections in order to ensure information flows by reviewing a weekly prime-cost report, studying the monthly P&L and posing queries when something moves unexpectedly.
Specialized restaurant bookkeeping services can support that approach by maintaining the book’s structure and assisting the owner to comprehend what the reports are saying.
There is a good chance that you’ll end up with an accountant that can do all of the tasks.
An owner can sit down with the P&L and engage in a thoughtful discussion on the business.
The aim of financial independence is not to produce additional reports, but to achieve financial freedom
Restaurants already produce huge amounts of data. A different dashboard might not be helpful.
When an operator can review the weekly report on prime costs and see that something has changed, they are able to then review their P&L to find out what is in need of additional investigation.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate repetitive tasks. Check your top costs each week. Study the language of your P&L.
You don’t need to be an accountant.
It is essential to be aware of the financials of your restaurant before you become an owner.