Restaurant owners will open their monthly P&L reports, and look at sales, then scroll down to the bottom of the report and close the report.
Do these sound like familiar?
If only these two numbers are examined, the report’s true value is not realized.
Bookkeeping for restaurants that is efficient shouldn’t leave owners more dependent on an accountant. They should be more confident about their numbers. It’s not required to sit long hours completing invoices, or know every accounting rule. You should know how profit has changed and what’s happened to food and labor costs, and the issues that need to be addressed in the coming week.
That’s the idea Bookkeeping Chef’s mission: to automate the bookkeeping work that doesn’t require an owner’s time, while providing restaurant owners with greater financial transparency that they can actually use.
Begin With the Weekly Numbers Don’t Just Focus on Month-End
Although restaurants are not operating within a calendar month they do require an P&L. This week, the managers plan their labor. Chef orders food now. Vendors change prices now.
Bookkeeping Chef’s weekly prime-cost reports are published alongside the financial statements for the month.
Prime cost is the sum of costs of selling goods and labor. These are two main areas that can move quickly in an establishment. The information provided by the Bookkeeping Chef indicates that prime costs usually represent 60 percent of sales at restaurants.
Think about a situation where sales aren’t changing much and the costs of primary production are growing. The percent by itself does not provide the answer. It provides the person with a reason to investigate.
Did the hourly wage grow? Did overtime happen? Costs of food changed? Was the invoice of a vendor uncharacteristically high? Have the sales mix changed?
It’s far more beneficial than discovering the same issue two weeks later.
Automate repetitive tasks
The DIY bookkeeping process doesn’t have to be limited to manually moving POS numbers into spreadsheets.
Automating the bookkeeping processes of restaurants can reduce repetitive data movements. The service connects POS systems and QuickBooks, vendor platforms recipes and inventory management, and Payment instruments/AP.
The purpose is not to automate for its own sake.
This is to decrease the time spent on manual data entry. It also keeps accounts of financial transactions up to date so that the owners are able to focus on reading information rather than gathering it.
It is a totally different bookkeeping model for restaurant establishments. Technology takes care of the mechanics and the restaurant owner remains engaged in the financial side.
P&L Questions: Find out to Ask Better Questions
Stop thinking of your P&L as like an accounting test.
Begin with sales. Next, examine the costs of production. Compare food and beverage performance. Study the cost of labor. Move down through operating expenses and examine what’s left.
It is vital to compare periods.
If the sales increased, but the profit was not, something between the two lines has changed. If food costs has increased, find out what was happening operationally. Compare staffing with sales to see if labor percent has changed. Investigate if a number seems odd, rather than assuming that the restaurant was in poor times.
Bookkeeping Chef can provide monthly P&Ls that can be completed within five business days. Owners are able to review the company’s performance without waiting for months before receiving financial statements.
For restaurant owners who require bookkeeping solutions, speed is important but understanding is the bigger aim.
DIY Doesn’t Mean Self-Employing Everything
There’s a middle-ground between handing the entire accounting function to a third party and having your own bookkeeper full-time.
A business owner can be engaged without having to manually complete every accounting task.
It could be as easy as using automated system connections to ensure that information flows. But it could also be as intricate and complicated an analysis of the month’s P&L or even a review of the weekly Prime Cost Report.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
The result isn’t a owner who is able to accomplish every bookkeeping job.
A business owner can have a conversation with a P&L regarding the business.
The aim is financial independence without reporting
Restaurants already generate huge amounts of data. A dashboard doesn’t always make sense.
Real value occurs when an operator can open the P&L report, be aware that there is a change, and then go through the report on the primary cost.
Bookkeeping Chef’s approach to bookkeeping incorporates restaurant accounting automation, daily reports, monthly P&Ls as well as restaurant-specific financial assistance to make this possible.
Automatize repetitive tasks. Check your top costs each week. Learn to speak the language of your P&L.
There is no need to become an accountant.
Owners who are knowledgeable about the financial aspects of their own restaurants can make better decisions.