Restaurant owners open the monthly P&L then looks over sales, then jumps to the bottom line and then closes the report.
Sounds familiar?
It might be a completely accurate report, but by only examining those two figures, you leave the bulk of its value on the table.
Good restaurant bookkeeping shouldn’t make owners more dependent on an accountant. They should be more confident in their own numbers. It’s not necessary to spend long hours completing invoices, or be aware of every accounting rule. It is important to know why the profit changed, what happened with labour and food and what questions require focus next week.
Bookkeeping Chef’s mission is to automate tasks in bookkeeping that don’t require the time of restaurant owners, and provide the restaurant owners with better financial data that they can make use of.
You Should Start By Looking at the Weekly Numbers and Not Only Month-End
A monthly P&L is important, however restaurants do not operate on a monthly basis. Managers plan their labor for this week. Chef orders food today. Vendors change prices now.
The weekly reports on Bookkeeping Chef’s prime-cost report are published alongside the monthly financial statements.
The prime cost comprises two major areas that are easily relocated in a food service establishment: cost of goods sold, and the cost of labor. According to data provided by Bookkeeping Chef, prime cost accounts for about 60% of the sales at restaurants.
If sales haven’t changed much, but prime cost rises. This percentage by itself will not provide the answer. It gives the owner reason to do some research.
Was there an increase in hours working? Was overtime a factor? Food costs changed? Did vendor invoices seem excessively high? Has the mix of sales changed?
This is far more beneficial than finding the same issue several weeks later.
Automate repetitive tasks
DIY bookkeeping doesn’t need to involve manually transferring POS totals into spreadsheets, after service.
Automating the bookkeeping process in restaurants can reduce repetitive data movement. The service connects systems including POS and QuickBooks, payroll vendor platforms inventory management, recipe and recipe management and payment and AP tools.
Automating just for the sake of automation is not the goal.
It’s to make it easier for manual data entry and to keep financial records current enough that owners can spend their time looking over data instead of creating it.
This is a completely new way of bookkeeping for restaurants. The technology is able to handle more of the mechanical aspects, but the owner remains involved in the financial aspects.
P&L Questions: Find out How to Ask Better Questions
When you stop treating a P&L as a test it becomes less intimidating.
Begin by looking at the sales. Start with sales. Compare the food and beverage industry’s performance. Check the cost of labor. Look at labor.
Comparing the time spans is crucial.
Something between these two lines is changing if sales have increased but the profits haven’t. If food cost was up, you should ask about the changes operationally. Compare staffing with sales to see if the labor percentage has changed. Look into any numbers that appear strange, rather than assuming that the restaurant experienced a poor week.
Bookkeeping Chef offers monthly P&Ls that are completed in five business days, allowing owners the chance to examine the performance of their business, rather than getting financial statements for a long time after the operating period is over.
Speed is essential, but the aim is to comprehend.
DIY Doesn’t Mean doing everything yourself.
It is not necessary to be the sole bookkeeper if you want to avoid handing the complete financial responsibility to another person.
The owner is able to remain engaged without having to manually complete each accounting task.
It could be as easy as using automated system connections in order to ensure that information flows. It could also be as intricate and complicated review of the month’s P&L or even a review of a weekly Prime-cost report.
Specialized restaurant bookkeeping services could support that approach by keeping the books in order while helping the owner understand what the reports mean.
It is unlikely that you’ll end up with an accountant that can do all the duties.
Owners who can be able to sit down and discuss intelligently about their company with the P&L will be more successful.
The goal of financial independence isn’t to create more reports, but rather to achieve financial freedom
Restaurants already produce huge amounts of information. Another dashboard might not be useful.
The real value comes when an operator is able to look at a weekly report on prime costs and see that something has changed, then open the P&L and figure out 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 repetitive tasks. Review your prime cost every week. Learn to speak the same language as your P&L.
There is no need to be an accountant professional.
It is important to understand the financials of your establishment before you take over as the owner.
