Restaurant owners open the monthly P&L then looks over sales, then skips to the bottom line and then closes the P&L.
Sound familiar?
If only those two numbers are examined, the report’s true value is diminished.
A reliable bookkeeping system for restaurants shouldn’t increase the dependence of the owners on accountants. It should help them feel confident in their own financials. You don’t have to know each accounting rule, or have to spend hours completing invoices. You must be aware of the reason why profits moved in relation to food and labor costs, and which questions deserve focus next week.
Bookkeeping Chef is a program which automatizes bookkeeping, so owners can spend more time on other things while getting clearer financial reports.
Don’t stop at month-end Numbers. Start by calculating Weekly Numbers
A monthly P&L is crucial, but restaurants don’t run monthly. Managers schedule labor for this week. The chef is ordering food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on the top costs, together with monthly financial reports.
Prime cost is the sum of two important aspects that can be easily transferred in a food service establishment: cost of the goods that are sold, as well as labor. The information provided by the Bookkeeping Chef indicates that the prime cost typically accounts for 60 percent of the sales in restaurants.
Take a look at a scenario where sales are not changing at all while the prime cost is growing. This percentage alone isn’t enough to provide the solution. It provides the owner with a reason to look into the issue.
Did you notice an increase in the amount of time working? Did you have overtime? Was the cost of food fluctuating? Was the invoice of a vendor unusually high? Did the mix of sales changed?
It’s better to discover the problem now before it gets worse.
Automate the repetitive work
DIY bookkeeping does not have to be a manual process of transferring POS (point of sale) amounts onto spreadsheets.
Modern restaurant bookkeeping automation can handle much of the repetitive transfer of financial information. The service connects systems including POS Payroll, QuickBooks, POS vendors, vendor platforms inventory management, recipe and recipe management as well as payment and AP tools.
Automating for the sake of automated is not the aim.
The goal is to eradicate manually entering data and keep financial records up-to-date to allow owners to spend more time analyzing the data instead of trying to assemble it.
This is a completely new way of bookkeeping for restaurants. The technology handles more of the mechanical aspects, but the owner remains involved in the financial aspects.
P&L Questions: Find out to Ask More Effective Questions
If you stop thinking of the P&L like a test, it becomes less intimidating.
Start with sales. Then, you can look at the cost of production. Compare the results of beverages and food. Take into consideration the labor. Continue to reduce your operating costs.
More importantly, compare periods.
Somewhere between these two lines has changed in the event that sales have been increasing, but profits have not. If food cost was up, you should ask about the changes operationally. Compare the staffing levels and sales activities in case labor percentages changed. If a figure appears to be odd examine it instead of thinking the restaurant was simply having poor month.
Bookkeeping Chef’s monthly P&Ls are which are finalized in just five business days. This gives owners the opportunity to look over the performance of their business, rather than getting financial statements long after the operating time is completed.
For owners searching bookkeeping restaurant solutions, speed is important however understanding is the greater goal.
There’s no need to do everything yourself when you DIY
There’s a compromise between delegating the entire financial function to someone else and establishing yourself as your own full-time bookkeeper.
Owners can continue to be involved in the accounting process, without needing to do everything manually.
It could be as simple as the use of automated systems to keep track of the flow of information, examining a monthly P&L and a weekly report on the primary costs, or asking questions if there is an unplanned event.
Specialized restaurant bookkeeping can help in this manner by making sure the books are in order and assisting the proprietor to be aware of what they represent.
However, this does not mean the owner will be in a position to complete all bookkeeping functions.
The owner should be able to have a conversation with an P&L and have an intelligent conversation about their business.
The Objective Is Financial Independence not More Reports
Restaurants are a major source of data. Another dashboard might not prove beneficial.
Real value occurs when an operator is able to open the P&L report and recognize that there was a shift and then examine the report on the primary cost.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate repetitive work. Review prime cost every week. Understand the language that is used in your P&L.
It’s not necessary to become an accountant.
Owners who are knowledgeable about the financial aspects of their own restaurants will be able make better decisions.
