Accounting Tips For Restaurants
Restaurant accounting is a unique beast. You can be a huge success in the restaurant business with decades of experience in all the positions from head chef to general manager, however, you still may not be an expert when it comes to restaurant accounting processes. Where do you start? Do you know what a profit and loss statement looks?
Choose an Option for Keeping Your Records
You have to first figure out how you are going to keep your records. In most cases, this is based on your personal preferences and budget. There are several options to consider, including the following:
- Paper ledger: If you have a lower volume of business, and you aren’t exactly comfortable with technology, working on paper is a straightforward option. You can utilize a basic ledger book; just make sure to carbon paper everything you do. The downside is that this method is extremely at risk of human error. This is one of the lowest cost options, however, when you provide these records to your accountant for taxes, they will likely charge more than if you used a restaurant-specific software.
- Spreadsheet: Another fairly simple option is a spreadsheet. Once created, you can use this to export your information to your accountant.
- Small-business accounting software: You can find many software options (discussed below) to help you keep your records.
- Restaurant-specific programs: There are software programs specifically for restaurants that offer features such as point of sale and ordering and inventory management. This option is more expensive initially but makes your record keeping easier and less time-consuming.
Find the Right Accounting Software and Tools
Today, as mentioned earlier, there are all types of technology available to help you manage, organize and keep up with your restaurant’s profits, losses and other accounting issues. There are a number of restaurant accounting software programs that provide AP and AR automation, such as GetSourcery.com. With this software, you can enjoy features such as invoice storage, analytics, online bill pay, high touch services, easily handle disputes and more. With one program, you can optimize your accounting efforts, making everything simple, efficient and effective.
You can also utilize software such as QuickBooks and Xero to help you with keeping track of sales, losses, profits and more automatically. You can use these programs to create all the accounting documents and papers you need, including the profit and loss statement that will be vital to your restaurant’s ongoing success.
Important Things to Keep Track Of
Your accounting system provides you with two basic types of information:
- The things you need to know periodically (i.e. taxes)
- Things you need to know all the time (i.e. labor cost, food cost, sales, etc.)
Some of the things you will need to make sure you are tracking on a daily basis include:
- Your sales: You need to know the amount of revenue you make every day, broken down into beverage and food, by category, or by the individual dishes served.
- Orders: This is the flip side of your sales – how much inventory, food, etc. have you ordered?
- Payroll: You need to know payroll expenses per day based on the staff you have on-site and how much you pay them.
- Value of inventory: You will have to count manually because there is no way to figure out what you have on hand electronically.
The Profit and Loss Statement
While there are more than a few documents you will need to use and keep up with, none is as important as the profit and loss statement.
This statement will help you keep track of many of the things listed above, including your operating expenses, labor costs, food costs, and revenue. With this statement, you can keep your information organized and even customize it based on your particular needs.
The profit and loss statement you create should be divided into three primary sections including:
- A breakdown of your revenue. This is the profit that you earn from selling your goods to your customers. While most profits will be generated from beverage and food sales, you may also include merchandise sales and catering.
- A list of your cost of goods sold. This tracks the total amount of money you are spending on the food and beverages you give to your customers.
- Your restaurant operating expenses. This will be things that include occupancy expenditures, insurance costs, etc. Essentially, everything from your paper napkins, menus, rent, electrical costs, and more. Anything you spend money on for day-to-day operations.
Helpful Tip: Since you can customize your profit and loss statement with GetSourcery.com, you should make sure it reflects the things that are most relevant to your particular business. Even if you use a pre-made template, to begin with, be sure it is customized with information that you need to keep track of.
The Bottom Line
As you can see, there is a lot to restaurant accounting. However, when you use the tips here, you will be on your way to getting the result you want, which is a profitable restaurant business.
Don’t try to cut corners. Instead, utilize these tools simplify your restaurant accounting process. Take advantage of amazing technological software created with restaurants in mind to take care of all the numbers quickly and easily.