Restaurant owners open their monthly P&L reports, examine sales, then go down to the bottom and close the report.
Are you familiar with the situation?
If only these two numbers are scrutinized the true value of the report is lost.
It shouldn’t cause them to become more dependent on an accounting firm. It should help them become more confident with their own numbers. There is no need to be familiar with every accounting rule and have to spend hours completing invoices. You must be aware of how profit moved from food and labor costs and what issues need attention next week.
Bookkeeping Chef is a software that automates bookkeeping, so the owners can focus in other activities while receiving clearer financial reports.
Do Not Stop at the month-end Numbers. Start by calculating Weekly Numbers
Even though restaurants do not operate within a calendar month they are still required to maintain a P&L. Managers schedule labor this week. The chef ordered food today. Vendors change prices now.
Bookkeeping Chef offers weekly flash reports on costs of the day and monthly financial statements.
Prime cost is the sum of costs of selling goods and labor, two sectors that can quickly move in restaurants. The Bookkeeping Chef’s information notes that the prime cost typically accounts for approximately 60% of the sales at restaurants.
Let’s say sales have not changed at all however, the cost of prime increases. This percentage alone isn’t enough to provide the answer. It provides the person with the reason to conduct an investigation.
Did hourly work grow? Did you have an overtime? Was the cost of food fluctuating? Was a vendor invoice uncharacteristically high? Changes in the sales mix?
It’s far more beneficial than discovering the same issue several weeks later.
Automate the repetitive work
Bookkeeping for DIY isn’t just about manually transposing POS numbers into spreadsheets.
Automating the process of bookkeeping for restaurants can help eliminate repetitive data movement. It connects to various systems, including POS as well as QuickBooks, payroll vendor platforms inventory management, recipe and recipe management as well AP/payment tools.
Automation is not the objective.
The aim is to reduce manual data entry, and keep financial records up-to-date so that owners are able to spend more time reviewing the data rather than assembling it.
This creates a new model of bookkeeping for restaurants. The technology will take care of the mechanical aspects, but the owner is still tasked in the financial aspects.
P&L Questions: Find out How to Ask More Effective Questions
When you stop treating the P&L like a test, it will become less daunting.
Start by analyzing the sales. Then, take a look at costs of production. Compare the food and beverages performances. Look at the cost of labor. Look at operating expenses. and see what remains.
In addition, it is important to compare timeframes.
If sales increase but profits aren’t, it is some variation between them. What happened when food prices went up? Check the levels of staffing and sales activities if labor percentages have changed. If a figure appears to be odd take a look instead of assuming the restaurant was simply having a bad month.
Bookkeeping Chef provides monthly P&Ls with five days. This lets owners review the latest performance without waiting for financial statements which usually arrive months after the end of an operating time.
For those who are looking for bookkeeping restaurant solutions, speed is useful however understanding is the greater objective.
It’s not necessary to do everything yourself when you make it DIY
There is a middle ground between outsourcing the entire accounting function to a third party and having your own bookkeeper full-time.
You can be involved as a business owner without performing the entire accounting process manually.
This could mean the use of automated system connections in order to ensure information flows by reviewing a weekly prime-cost report, looking at the monthly P&L and asking questions in the event of an unexpected change.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
It’s not an owner who is able to do every bookkeeping function.
It’s an owner who can have a conversation with a P&L and have a frank discussion on the business.
The Goal Is Financial Independence Not More Reports
Restaurants are a major source of information. The other dashboards aren’t necessarily useful.
Real value occurs when an employee can open an P&L report, and see that there is a change, and then review the reports on prime costs.
Bookkeeping Chef’s plan is a combination of financial support for restaurants regular reporting and automated restaurant bookkeeping to achieve this.
Automate repetitive tasks. Examine your prime costs each week. Learn to understand the same language as your P&L.
There is no need to be an accountant.
Owners who are knowledgeable about the financial aspects of their restaurant will be able make better decisions.
