Have you recently opened a restaurant and hope to make it a successful venture? Well, putting a smile on your guest’s face isn’t enough! You need to know the ins and outs of restaurant bookkeeping and accounting.
Whether you’re a startup entrepreneur in the hospitality industry or an accomplished restaurateur, restaurant bookkeeping and accounting might sound like a foreign language to you.
While managing bookkeeping for a restaurant, several questions might pop up in your mind: How do I calculate the accounts payable? How do I prepare a budget for my restaurant operation? How do I choose the best restaurant accounting software? What’s a profit and loss statement?
Restaurant accounting is a complex process with several dynamic components measured against industry standards. Plus, bookkeeping for restaurant can be time-consuming and accuracy-dependent. But we’re here to make the concept simpler for you!
How To Master Restaurant Bookkeeping?
Understanding the basics is essential to make smart, finance-driven business decisions. So, let’s take a look at the steps you need to take to manage restaurant bookkeeping.
1. Hire Expert Bookkeeping Services For Small Business
When you hire a reputed accounting outsourcing service provider, you don’t need to focus on the complex bookkeeping elements. You can focus on things that actually matter for your business, such as expansion strategies, customizing menus, improving customer hospitality, etc.
With professionals by your side, you don’t need to spend your precious time dealing with inventory management, staffing, and tracking the cost of goods sold.
You can be free from the burden of complex financial analysis and monotonous daily accounting tasks that would eat up your time and focus from managing restaurant operations.
Remember, find and hire a bookkeeper who understands the nuances of the food and beverage industry that, includes front-of-house operations as well as back-of-house management.
A seasoned restaurant accountant will be aware of what balanced financials look like within the context of the restaurant industry, as well as what KPIs you should be concentrating on based on your business model.
Restaurant accountants are trained to compile data precisely and purposefully. They can analyze your financials and identify operational flaws, unnecessary spending, and trends to pay attention to in the long term.
2. Record Sales Daily Through POS systems
To understand and streamline your revenue streams, you need to record daily sales. Apart from that, you also need to categorize your sales based on cash or credit received, food versus beverage, etc.
In fact, proper sales tracking lays the foundation of effective bookkeeping. You can outsource these sales tracking and categorizing to a professional bookkeeping firm.
A reputed accounting outsourcing service provider will implement sophisticated POS systems to automate sales tracking and generate daily sales reports. These custom reports provide real-time data insights.
Want a more streamlined approach? You can integrate your POS system with the restaurant management software. This will automate general ledger entries, ensure updated inventory tracking, and provide labor data, giving you insights into your business’s financial performance.
3. Simplify Payroll Processing
Happy staff equals smooth operations. Therefore, paying your staff is a critical task. But it also compasses certain complexities.
During employee payroll management, you need to consider regulations on tip reporting, payroll taxes, Medicare taxes, Social Security, etc. Filing the payroll taxes incorrectly or after the due can translate into hefty penalties.
Bookkeeping services for small business helps to automate the payroll process by integrating a restaurant management platform. Automation eradicates the risk of human error, ensures accuracy and compliance, saves time, and minimizes the risk of penalties.
4. Analyze Your Financial Numbers
To understand and determine the financial condition of your restaurant business, you need to regularly analyze financial and operation data.
Key reports included in bookkeeping for a restaurant include:
- Profit and loss (P&L) statements
- Prime cost (food and labor costs)
- Controllable Costs Report
- Cash Flow Statement
- Chart of Accounts
These numbers and reports provide valuable insights into your restaurant’s performance.
For example, analyzing your daily profit and loss reports helps you identify strengths and weaknesses in your business. You can take proactive and well-informed measures to address any bottlenecks or issues that stop you from generating the expected profit.
Similarly, calculating and tracking prime costs enables you to optimize seasonal menu items and prices, manage inventory efficiently, and make smart staffing decisions.
For instance, you can have special/exotic items on the menu in particular seasons when the procurement costs of the raw materials are low.
Bookkeeping services for small business help you prepare and generate these financial reports so that you can strategically plan your restaurant operations.
5. Regularly Reconcile Your Restaurant Bookkeeping with your Bank Accounts
Bank reconciliation ensures your restaurant bookkeeping records match your bank accounts, payroll liabilities, loans, credit card dues, etc.
Restaurants have a significantly high number of transactions. Therefore, account reconciliation, especially in the hospitality industry, can be complex and time-consuming.
How to do Bookkeeping for a Restaurant
But with the right restaurant accounting tools, this process can be automated. The tools match your records against your accounts, identifying any discrepancies and errors quickly and accurately.
Reputed bookkeeping services use sophisticated and integrated systems to automate and complete account reconciliation within a short period of time.
Therefore, when you collaborate with professional services or outsource your bookkeeping task, you can leverage the power of several tools and software at a fraction of their price.
You can easily track any incorrect deposits, lost invoices, or sales discrepancies.
Wrapping up
Bookkeeping for a restaurant can be difficult. So, whether you’re a seasoned restaurateur or just starting out in the food industry, seeking professional help or using specialized restaurant accounting software can simplify the bookkeeping process and reduce the risk of financial hiccups.
Ensure to perform due diligence and hire the right professional agency to outsource your bookkeeping and accounting tasks.
Efficient bookkeeping helps you gain valuable insights into your business operations. You can make informed decisions and plan for future growth. It’s not merely about crunching numbers; it’s about ensuring that your restaurant thrives and continues to delight diners.
Here’s to many more satisfied customers and prosperous years ahead!