The owner of a restaurant opens the monthly P&L then looks over sales, skips down to the bottom line and closes the report.
Sound familiar?
It may be a perfectly complete report, however when you only look at those two numbers, it leaves most of its value left to chance.
They shouldn’t be more dependent on an accounting firm. They should feel more confident about their numbers. There is no need to be familiar with all accounting rules or be a slave to invoices for hours. It’s essential to know the reason for the fluctuation in profits as well as what happened to the use of labor and food and which issues require focus next week.
Bookkeeping Chef is a program that makes bookkeeping easier, meaning users can focus doing other things and receive more clear financial reports.
Begin With the Weekly Numbers, Not Just Month-End
A monthly P&L matters, but restaurants don’t run monthly. The managers schedule the labor for this week. Chef has ordered food. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on prime costs along with monthly financial statements.
The primary cost is comprised of the cost of goods and labor both of which are areas where a restaurant can make rapid progress. The data provided by the Bookkeeping Chef shows that prime costs usually represent 60 percent of the sales in restaurants.
Think about a situation where sales are not changing at all while the prime cost is rising. This percentage isn’t an answer. It provides the person with the reason to conduct an investigation.
Did hourly wages get more expensive? Was overtime a factor? Costs of food changed? An invoice from a vendor appeared unusually big? Did the mix of sales changed?
It is more beneficial to identify the issue now rather instead of waiting until later.
Automate repetitive tasks
DIY bookkeeping does not have to be a manual process of transferring POS (point of sale) totals onto spreadsheets.
Automating the restaurant’s bookkeeping process can help eliminate repeated data movement. The system integrates with systems such as POS as well as QuickBooks payroll vendor platforms, and inventory management.
Automating for the sake automated is not the aim.
It’s to make it easier for manual data entry, and keep financial records up-to-date so that owners can spend their time looking over data instead of creating 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.
P&L Questions: Learn to Ask Better Questions
When you stop treating the P&L like a test, it will become less daunting.
Start by reviewing sales. Begin with sales. Compare the food and drink performances. Check the cost of labor. Look at labor.
Compare periods.
If profit increased but sales rose, was not, something between the two lines was changed. If food costs has increased, find out what was happening operationally. Check sales and staffing to see if the labor percentage has changed. If the number appears odd take a look instead of assuming the restaurant was simply having an awful month.
Bookkeeping Chef sends monthly P&Ls on five days. This lets the owners look at recent performance without waiting for financial statements that usually arrive months after the conclusion of the operating period.
Speed is important, however the goal is to understand.
It’s not required to make everything.
There is a middle ground between delegating all financial function to someone else and becoming your own bookkeeper full-time.
You can be involved as an owner of a business without having to perform all accounting duties by hand.
This may mean making use of automated systems to manage information flow, looking over an annual P&L and weekly reports on primary expenses, or asking questions if there is an unplanned event.
Specialized restaurant bookkeeping can help with this approach by keeping the books in order and assisting the proprietor to know what they are.
There is a good chance that you’ll find an accountant that can do all the functions.
An owner can talk to a P&L regarding the business.
Financial freedom is not to generate more reports, but rather to be able to live a life of financial freedom.
Restaurants already generate enormous amounts of information. Another dashboard may not be efficient.
The real value comes when an operator is able to open an P&L report and recognize that there has been a change, and then review the prime-cost reports.
Bookkeeping Chef’s strategy incorporates automation of bookkeeping in restaurants weekly reports, monthly P&Ls, and the financial support for specific restaurants to help you achieve this.
Automate repetitive tasks. Review prime cost every week. Be aware of the language that is used within your P&L.
You don’t need to be an accountant.
It is crucial to know the finances of your restaurant before you take over as the owner.