A restaurant owner opens the monthly P&L and looks at the sales, then jumps to the bottom line and closes the report.
Do these sound like familiar?
The report could be completely correct, but if they are the only two figures reviewed the majority of its value is left unreviewed.
They shouldn’t be more dependent on an accounting company. They should be more confident about their numbers. You don’t need to know each accounting rule, or have to spend hours completing invoices. It’s essential to know what caused the change in profit as well as what happened to food and labor and which issues require to be addressed next week.
Bookkeeping Chef is a program that helps automate bookkeeping so users can focus in other activities while receiving clearer financial reports.
Begin With the Weekly Numbers, Not Just Month-End
Restaurants don’t run on the basis of a monthly. Managers schedule labor for this week. The chef has ordered food for today. Vendors change prices now.
That’s why Bookkeeping Chef provides weekly prime-cost flash reports, along with monthly financial statements.
Prime cost brings together the cost of goods sold as well as labor, two areas that can move quickly in the restaurant. Based on the information offered by Bookkeeping chef, prime costs represent approximately 60% of restaurant sales.
Imagine a situation in which sales are barely changing, but prime costs are rising. This percentage does not provide an answer. It provides the person with the reason to conduct an investigation.
Did hourly work increase? Was there overtime? Was the cost of food fluctuating? A vendor’s invoice appeared to be unusually large? Did the sales mix change?
It’s far more beneficial than finding the same problem two weeks later.
Automate repetitive tasks
The DIY bookkeeping process doesn’t have to be limited to manually transfer of POS figures into spreadsheets.
Modern bookkeeping automation in restaurants can handle a significant portion of the repetitive movements of financial data. The service can connect to systems such as POS as well as QuickBooks, payroll vendor platforms inventory management and recipe management as well as Payment and AP tools.
Automating for the sake of automation is not the goal.
It’s to make it easier for manual data entry and ensure that the financial records updated so that the owners are able to spend their time looking over data instead of gathering it.
This is a completely different way of bookkeeping that restaurants use: technology takes care of more mechanical aspects, while the restaurant owner is focused on the financial implications.
P&L Questions: Learn How to Ask More Effective Questions
Stop treating your P&L as if it were an accounting test.
Begin by studying the numbers of sales. Then, take a look at costs of production. Compare food and beverage performance. Study the cost of labor. Move down through operating expenses and examine what’s left.
The importance of comparing periods.
If sales improved but profit was not, something between the two lines occurred. What changed when the cost of food went up? If the labor rate changed, compare staffing and sales activity. Examine if the number appears odd, rather than thinking that the restaurant was in an unfavorable time.
Bookkeeping Chef delivers monthly P&Ls within five working days. This allows owners to view recent performance without waiting for financial statements which are often received months after the close of an operational period.
Speed is important, however the objective is to learn.
It’s not necessary to be a pro when you make it DIY
There’s a middle way between handing the entire financial functions to someone else and being your own full-time bookkeeper.
Owners can remain active without having to perform every accounting task.
That might mean connecting to automated systems to ensure information flows by reviewing a weekly prime-cost report, studying the monthly P&L, and asking questions in the event of an unexpected change.
Specialized restaurant bookkeeping can help with this method by keeping the books in order and helping the owner to know what they are.
The result isn’t a owner who is skilled enough to accomplish every bookkeeping job.
A business owner can engage in a dialogue with a P&L about the business.
The aim is financial independence and not More Reports
Restaurants already generate huge quantities of data. Another dashboard isn’t automatically useful.
The real value comes when an operator is able to look at a weekly report on prime costs and notice that something changed, then open the P&L and know what to do next.
Bookkeeping Chef’s approach combines restaurant bookkeeping automation, weekly reporting, monthly P&Ls, and restaurant-specific financial support to make that possible.
Automate the repetitive work. Review the prime cost each week. Understand the language employed within your P&L.
You don’t have to be an accountant professional.
Owners who are knowledgeable about the financial aspect of their restaurants can make better decisions.