The restaurant industry truly is a world of its own. It’s incredibly demanding, super fast-paced, and one of the most competitive markets to enter. But, it’s also highly rewarding, especially if you’re passionate about food and service.
It’s one thing to be passionate and another to be successful, though. You may serve the best food in town or fill every seat in the house and still go out of business if you’re not careful. That’s why smart restaurant accounting and doing good business as a whole is so important!
If you’re looking to improve how you make, spend, and track your money, you’re in luck. Here are six restaurant accounting tips to help you better understand every single dollar your business makes.
1. Know (and Check!) Your Inventory
It doesn’t matter if you own a small food truck or you’ve just opened a high-end steakhouse, you have to figure out a way to track your inventory and to best preserve it, too
There’s no sense in spending so much money on fresh produce each week if half of it ends up in the trash. The same goes for raw meats, herbs and spices, and everything else in the kitchen. The goal is to establish a system where you never run out of ingredients but you’re not throwing money down the drain, either.
Take inventory of non-perishable items in your restaurant as well. You need to know everything that’s behind the bar and take note of how often you’re replacing certain goods like silverware or cooking gear.
The best way to do all of this is to create an in-depth schedule for your inventory.
Try to have new orders arrive on the same day from certain vendors. But, space out your orders for different things so you’re not overwhelmed by all the new inventory coming in. More so, make it a habit to check your inventory and ensure that the numbers in your books match what’s really in the restaurant.
2. Create a Profit and Loss Statement
Even when you think you’ve got your inventory down to a science, you’re still going to have a few losses to take. That’s just what happens when you have so many fresh things in the kitchen and a rise and fall of customers coming through the door.
You can never exactly predict how many people will come in on any given day or what they’re going to order. This means you’ll still end up throwing out some ingredients – and don’t forget about the scrapped goods that you have to account for when people send things back.
Thankfully, a profit and loss statement can help you keep track of it all. It gives you a better understanding of how money comes into and goes out of your restaurant every day.
3. Record Financial Details Every Day
Most restaurants count the money in their drawers every day at opening and closing time. They aim to keep the same amount of money in the drawers during each count in order to better manage all their finances. You’ll usually have more money in the drawer at closing time, which is then your responsibility to take out and store in a safe place.
But, there may be times when the drawer is “under” and the good news is that’s not always a reason to panic. Maybe you had to comp a meal that was unpleasant for a customer or perhaps a table decided to split the check after it was already closed out. These are rare instances, but they do still occur and they can affect how your drawer balances out.
If you track them daily, though, you increase your chances of keeping your cash drawers balanced and the overall finances of the restaurant in good shape.
4. Perfect Your Payroll
Payroll is just as important as the money you spend on inventory and the cash that comes in from customers. However, it’s another aspect of restaurant finances that you could be losing money on if you’re not careful.
Think about how much money you spend processing payroll right now. Is there a cheaper alternative? Would you be better off hiring a few more employees than paying some of your current ones for overtime? More so, how is your turnover rate looking?
All of these details matter! They may seem like small instances to take care of here and there, but they make a big difference once the end of the month/year rolls around.
5. Identify Saving Opportunities
Speaking of saving on a payroll, take a moment to consider all the opportunities for your business to save more money. Restaurant accounting isn’t always about breaking even or increasing profit. It’s also about creating a sustainable business model by using the financial numbers available to make smarter operating decisions.
You never know, smarter accounting could lead you to pay less on overhead or to get more value out of your regular shipments. It gives you all the information you need to better allocate your funds and to increase your earnings as a whole.
6. Have Someone Check Your Work
All it takes is one accounting error to throw everything off, which is why it’s always a good idea to have someone check your work. You may choose to have someone on your staff help you with some of the tasks above, or you might decide to hire an accountant to balance the books of your restaurant.
Whatever you do, make sure you’re not handling all of your finances alone. This way, you’re more likely to have an accurate recording of all your earnings and expenses.
Restaurant Accounting Made Simple
Understanding restaurant accounting is a lot easier in theory than it is in practice. It takes a bit of time to get used to how accounting works and figuring out the most effective uses of money in your business.
But, this isn’t a process you can afford to prolong, especially if you just opened your restaurant. Thankfully, you don’t have to take it all on alone!
Click here to discover everything we can do to simplify your restaurant accounting.