Running a restaurant seems easy but the deeper you look into what it takes to be successful, the better you understand that finance management is one of the crucial areas requiring most of the attention. But the irony is that many restaurant owners overlook this part as they don’t want to involve in complex numerical calculations.
As a restaurant owner, you must take the time to look into your accounts. Although it is quite challenging, streamlined accounting operations will help you make sound business decisions, comply with regulations, and improve the overall finance management. To further help you with restaurant accounting, here are some of the tips suggested by experts; let’s read through the same.
Check out the following experts’ tips on improving your restaurant business accounting
1. Bram Jansen, Chief Editor of vpnAlert
Employ an accountant
I would say that hiring an accountant to help you manage your restaurant’s finances is a smart move for any restaurant. If the entire process is too confusing or the bookkeeping is too complex for you to manage, an accountant can assist you. Even if you have a comprehensive understanding of the bookkeeping process, a professional accountant can assist you in interpreting the information that your accounting produces.
Hiring an accountant is a great way to ensure that everything is being done correctly, that your business is profitable, and that it is in compliance with all federal, state, and local tax and payroll laws, whether you are just starting out in the restaurant business or have been doing the accounting for years.
2. Harry Hughes, CEO and Co-founder of Dangler
Focus on inventory management
Food is something that goes bad. Because of this, you need to buy it in the right way. It’s not a good idea to buy too much food at once and store it for later use. This will make your costs go up, and food could go bad quickly. To avoid this waste, you should check your inventory once a week.
Accounting firms know how to help restaurants keep track of their finances. They already know how your inventory system works. They know how much inventory should be bought at once to keep costs from going up. Hiring accountants with a lot of experience will help you make better decisions for your business.
3. David Floyd, Owner of ThePestInformer
Include all Costs
Bussers, servers, hosts, or anyone on your payroll are included in labor costs. Payroll taxes and employee benefits are included as well. COGS are not included in this figure. Two things to keep in mind when figuring out how much it will cost to staff your restaurant. To begin with, employees who work more than 40 hours per week are legally entitled to be paid overtime for each additional hour they put in.
Second, the number of gratuities your employees receive can affect your minimum wage requirements. Make an effort to familiarize yourself with the rules governing tip credit in your area, and factor this information into your labor costs.
4. Matthew Dailly, Managing Director at Tiger Financial
Keep a track of profitability
Profitability is undoubtedly a big aspect of a restaurant’s expansion strategy. To guarantee that your business continues to expand well, there are some crucial factors to building a good bookkeeping system. This begins with calculating overhead & adjusting the price to your target marketing in the restaurant industry.
Determine your overhead
Calculating the overhead and then choosing your prices is among the most difficult aspects of opening a business. Knowing your restaurant’s overhead before you open can help you make important decisions regarding your business, such as:
- Is it the ideal time for you to launch a restaurant?
- Is it possible for your target market to afford the rates you propose?
- Are you planning on making a profit?
5. Jonathan Merry, Director at Bankless Times
Keep your sales records accurate
It’s all too simple to get behind on your sales records. Indeed, one of the causes that restaurant bookkeeping is frequently a shambles is that managers and owners fall behind on simple chores. Make a routine of transferring or importing sales from the POS system into the accounting system every day to stay current. The goal is to find books that correspond to your bank data. You’ll have a hard time undertaking analysis later if you save all those credit card costs for a monthly or weekly payment. This should be done automatically if your accounting software & POS system are integrated.
Integrate your banking activities with your books, ensuring that data entry is constantly up to date. Automating this procedure not only saves you time by eliminating the need to complete the work manually, but it also improves accuracy significantly.
Every month, reconcile your bank statements
Yes, you should reconcile your bank statements once a month. Allowing them to sit for 4, 5, or even more months is not a smart idea. If you forget to enter a payment or a sale in business books, but your bank has processed the payment or sale, it will be easier to repair the issue if you detect it early.
In the worst-case scenario, not knowing how much money you have in the bank may result in bounced checks. Verify what their statement means to what your books show for each and every account that sends you a monthly statement – bank, lines of credit, credit cards, and loans. If there are any differences, figure out what went wrong and repair it.
6. JM Littman, Director at Webheads
Pay close attention to sales
Almost all restaurant sales are made through the use of a credit card. It is common for credit card terminals to demand you to close out that group of transactions once every day. Your bank account will be credited with the money as soon as you complete this action. In a nutshell, you’ll be making a deposit every single day. Daily deposits necessitate accurate bookkeeping, so be sure to record all money coming in and going out in the same manner.
A more accurate view of your daily sales can’t be obtained if a restaurant waits until the end of the week to report one “lump sum.” Daily sales have a significant impact on the company’s inventory and wages. To make reporting easier in the future, observe and record all sales and all money received on a daily basis.
You would not even realize how fast accounting tasks can become daunting for you, especially when you don’t have enough accounting knowledge. Still, if you try to handle it on your own, you might be putting your restaurant’s finances at risk, which may lead to incorrect calculation of taxes that you pay to the government. As a result, there’s an increased risk of penalty or an IRS audit. Therefore, taking the right approach to restaurant accounting is the best way. You may also outsource restaurant accounting services to streamline your accounting process and ensure compliance.
Outsourcing services also cost you less than hiring a full-time accountant in-house. With a reliable accounting outsourcing firm, you can make sure your finances are well managed and organized with a streamlined accounting process, helping you to ensure your business remains financially sustainable. However, if you expect the best outcomes out of your outsourcing partnership, make sure to choose a reliable service provider after thorough research.