A restaurant owner opens the monthly P&L, looks at sales, skips down to the bottom line, and then closes the report.
Sounds familiar?
If only those two numbers are scrutinized the true value of the report is gone.
Bookkeeping for restaurants that is efficient shouldn’t leave proprietors more dependent on an accountant. It should help them become more confident with their own financials. There is no need to spend all night entering invoices or knowing every accounting principle. You do need to understand how profit moved, what happened to the cost of food and labor and what issues need focus next week.
That’s the philosophy Bookkeeping Chef’s mission: to automate the bookkeeping work that doesn’t need an owner’s time, while providing restaurant owners with clearer financial information they can utilize.
Don’t stop at Month-End Numbers. Begin by calculating Weekly Numbers
A monthly P&L is important, however restaurants don’t run monthly. Managers schedule labor for this week. The chef has ordered food for today. Vendors change prices now.
Bookkeeping Chef’s weekly Prime-cost reports are published alongside the monthly financial statements.
The prime cost comprises two key areas that are easily transferred in a food service establishment: the cost of goods sold, and the cost of labor. The information provided by the Bookkeeping Chef shows that prime costs usually represent 60% of sales in restaurants.
Consider a situation where sales aren’t changing much however, the cost of prime services are rising. This percentage by itself will not give the answer. The owner has an excuse to do some research.
Have the hourly wages increased? Did overtime occur? Did food costs change? A vendor’s invoice was abnormally high. Has the mix of sales changed?
This is much more valuable than discovering the same issue several weeks later.
Automate the repetitive Work
Self-bookkeeping doesn’t mean manually transposing POS numbers into spreadsheets.
Modern restaurant bookkeeping automation can handle much of the repetitive movements of financial data. The system integrates with systems such as POS Payroll, QuickBooks, vendor platforms, and inventory management.
Automating for the sake of automation is not the goal.
It’s to cut down on manual data entry and to keep financial records current enough that the owners are able to spend their time reviewing data rather than gathering it.
That creates a different model of bookkeeping for restaurants: technology can handle the mechanics while the owner remains focused on the financial implications.
P&L Questions: Learn How to Ask More Effective Questions
Stop treating your P&L as like an accounting test.
Start with sales. Start with sales. Compare the efficiency of food and beverages. Consider labor. See the work.
More importantly, compare periods.
If the sales increased, but the profit wasn’t, something else between those two lines has changed. Consider what has changed in the company in the event that food costs went up. If labor percentage moved in the past, look at sales and staffing activity. Investigate any numbers that seem odd rather than just assuming that the restaurant was not doing well during the week.
Bookkeeping Chef provides monthly P&Ls completed within five business days. This provides owners the chance to examine recent performance, not receiving accounts long after the operating period has ended.
Speed is important, but the aim is to comprehend.
It’s not necessary to build everything.
There is a happy middle between having someone handle your entire financial functions and being your own accountant full-time.
Owners can still be involved in the accounting process without needing to complete every task by hand.
It could be as simple as the use of automated system connections in order to ensure that information is flowing, reviewing a weekly prime-cost report, analyzing the monthly P&L, and asking questions in the event of an unexpected change.
Specialized restaurant bookkeeping services can support that approach by keeping the underlying books organized while helping the owner understand what the reports mean.
It’s not an owner who is skilled enough to complete every bookkeeping task.
An owner is someone who can have a conversation with an P&L regarding the company.
The Objective Is Financial Independence and not More Reports
Restaurants already generate enormous amounts of data. A dashboard may not always make sense.
The real value comes when an operator can open an P&L report, recognize the change, and then review the prime-cost reports.
Bookkeeping Chef’s approach includes financial support for restaurants, weekly reporting and automated bookkeeping of restaurants to achieve this.
Automate repetitive tasks. Examine your prime cost each week. Learn the language of your P&L.
You do not need to be an accountant to be an.
Restaurant owners who are aware of the financial aspects of their own establishments are able to make better choices.