The restaurant’s owner examines the sales and then at the bottom line prior to closing the report.
Sounds familiar?
If only these two numbers are examined then the real value is diminished.
It shouldn’t cause them to become more dependent on an accounting company. They should feel more confident about their numbers. You don’t need to be an accounting expert or spend at night filling out invoices. You must understand how profit has changed, what’s happened to food and labor costs, and the questions that should be addressed in the coming week.
Bookkeeping Chef is a program that helps automate bookkeeping so users can focus on other things while getting more clear financial reports.
Do Not Stop at the Month-End Numbers. Start by calculating Weekly Numbers
A monthly P&L is crucial, but restaurants aren’t operating monthly. Managers are able to schedule work this week. The chef has ordered food for today. Vendors change prices now.
The weekly reports on Bookkeeping Chef’s prime-cost report are included with the financial statements for the month.
Prime cost is the sum of two major areas that are easily transferred in a food service establishment: cost of the goods that are sold, as well as labor. The data provided by the Bookkeeping Chef shows that the prime cost typically accounts for 60 percent of sales at restaurants.
Imagine a situation in which sales are barely changing, but prime costs are increasing. The percentage by itself does not offer the answer. It provides the person with an incentive to look into the issue.
Is the hourly wage increasing? Did overtime take place? Did the price of food changed? The invoice of a vendor was unusually high. Did the sales mix change?
That is far more useful than identifying the same issue several weeks later.
Automate repetitive work
DIY bookkeeping doesn’t have mean manually transferring POS amounts into spreadsheets after service.
Modern bookkeeping automation in restaurants can manage a lot all the repetitive transfer of financial information. The service connects systems including POS Payroll, QuickBooks, POS vendor platforms inventory management, recipe and recipe management, and Payment and AP tools.
Automating for the sake automated is not the aim.
The goal is to eradicate manual data entry, and ensure that financial records are up-to-date so that the owners are able to spend more time reviewing the information instead of assembling it.
It is a totally different bookkeeping process for restaurant establishments. Technology manages the mechanics and the proprietor remains involved in the financial aspect.
P&L Questions: Learn to Ask More Effective Questions
A P&L will be much more manageable when you don’t treat it as an accounting exam.
Begin by looking at the number of sales. Start with sales. Compare the food and beverage performance. Analyze the costs of labor. See the work.
More importantly, compare periods.
Something between these two lines has changed in the event that sales have been increasing, but profits have not. If food prices has increased, find out what was happening operationally. Check the levels of staffing and sales activities in case labor percentages changed. Investigate any numbers that seem strange, rather than assuming that a restaurant has had a bad week.
Bookkeeping Chef provides monthly P&Ls within five days. This allows owners to view recent performance without waiting for financial statements which often arrive months later than the conclusion of an operating time.
For owners searching bookkeeping restaurant solutions, speed is useful but understanding is the bigger objective.
It’s not necessary to DIY everything.
It’s not necessary to become the sole bookkeeper in order to avoid giving the entire financial responsibility over to another person.
Owners are still able to participate in the accounting process without having to perform every task by hand.
It could be as simple as the use of automated systems to keep track of information flow, reviewing a monthly P&L and a weekly report on primary expenses, or asking questions if something unexpected occurs.
Specialized restaurant bookkeeping services could support that approach by organizing the books while helping the owner understand what the reports mean.
However, this does not mean the owner will be competent to handle all bookkeeping tasks.
Owners who are able have a conversation about their business with the P&L will have more success.
The Objective Is Financial Independence Not More Reports
Restaurants produce a lot of data. A different dashboard might not be beneficial.
If an operator can take a look at their weekly prime cost report and see that something has changed, they may then review their P&L to determine what requires an examination.
Bookkeeping Chef’s strategy includes automated bookkeeping for restaurants weekly reports, monthly P&Ls, and special financial assistance to restaurants in order to enable this.
Automate repetitive tasks. Examine your prime cost each week. Learn the language of your P&L.
You don’t have to be an accountant professional.
Owners who know the financial aspect of their own restaurants will be able make better decisions.