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This guide serves as a resource for restaurateurs aiming to streamline finances, gain control over their operations, and achieve sustainable success. In such a landscape, the ability to run lean operations without compromising service quality is crucial. Strong financial management plays a central role in achieving this balance. Bookkeeping is not simply about logging expenses or preparing for tax season. It involves strategic oversight of cash flow, budgeting, inventory control, payroll, and financial forecasting.
Payroll and labor costs
These technologies not only simplify tracking but also provide actionable insights into revenue trends, customer behavior, and operational performance. Monthly reconciliation ensures that all transactions align with your bank accounts and recorded expenses. Additionally, online ordering systems with built-in restaurant analytics enhance sales tracking by providing detailed reports on customer behavior, order trends, and peak sales periods. For example, an online ordering system that syncs with your accounting and POS systems can automatically record sales, inventory adjustments, and expenses. Establishing an efficient bookkeeping system is crucial for managing the unique financial needs of the restaurant industry.
Daily sales report
Profit and loss forecasting combines these insights with projected expenses to predict net income. Strategic timing of promotions during traditionally slower periods can stabilize income while negotiating favorable payment terms with suppliers helps balance cash outflows. Fixed costs, such as rent, insurance, and equipment leases, remain relatively stable regardless of sales levels. Sales tax filing frequencies vary based on sales volume and jurisdiction requirements, with schedules typically falling into monthly, quarterly, or annual submissions. Restaurant staff typically fall into categories including full-time employees, part-time employees, seasonal workers, and, in some cases, independent contractors such as delivery drivers. Each role must be carefully evaluated against IRS guidelines to determine the correct classification, with most restaurant staff qualifying as employees rather than contractors.
Data analysis
- Total sales per head measures the average revenue generated per customer, helping identify sales trends and optimize marketing strategies.
- Operating expenses are pretty much everything else it takes to run your restaurant on a day-to-day basis.
- Some restaurants prefer to work on monthly accounting cycles, but we recommend the methodology of comparing apples to apples rather than apples to oranges.
Simplifying your restaurant’s bookkeeping process means efficiently managing the daunting task of settling salary payments, especially if you’re running huge operations and managing many employees. Calculating food costs will show you if you profit from each item on your menu. To calculate food costs, divide each item’s preparation cost by each item’s revenue. Calculating prime costs by adding labor costs to the cost of goods sold will help you increase profit and efficiency and reduce costs.
Running a restaurant isn’t just about great food – it also requires keeping meticulous financial records. Two key tools for this are a Profit and Loss (P&L) statement and a Chart of Accounts (CoA). These templates, customized for a small independent restaurant and aligned with U.S. GAAP standards, will help you organize finances, track performance, and ensure compliance.
Cost of Goods Sold (COGS)
The result is either cash over or short – but in an ideal world, you’re at zero. For growing restaurants, SLC Bookkeeping provides scalable packages ranging from $399 to $899 monthly, with pricing tied to revenue (per online search results – confirm this pricing with the company). Their integration with major POS systems streamlines operations, and they start each client relationship with a free financial health check.
- The scope of restaurant accounting also extends beyond the restaurant’s walls, interfacing with suppliers and government entities.
- In this article, we take a moment to distinguish bookkeeping from accounting and then bring you directly into our step-by-step guide for setting up a restaurant bookkeeping system that works.
- To miskey numbers when you’re entering row upon row of data is also human.
Reconcile Financial Accounts
Peak periods like holidays or weekends increase both transactions and operational expenses, while last-minute event cancellations—possibly due to weather—can disrupt revenue flow entirely. Such unpredictability demands a flexible and responsive bookkeeping system. Occupancy and equipment costs are usually the 2nd largest expenditure in a restaurant business, right after payroll. This means choosing lower-cost materials or finding alternatives that won’t compromise the quality of your food. Study carefully which aspect of your restaurant business incurs unnecessary costs and remove them completely. Put simply, any account with a statement containing a bookkeeping for restaurant beginning and ending balance can be and should be reconciled.
If it isn’t, don’t hesitate to adjust settings, explore new features, or even switch to a different platform that better supports your business. Bookkeeping goes beyond daily recordkeeping and involves generating certain financial statements. These documents provide overviews of various aspects of your restaurant’s fiscal performance. Running and analyzing these statements regularly helps support your decision-making.
These frequent checkpoints allow for quick adjustments to staffing levels and ordering patterns based on actual performance versus projections. Effective inventory management directly impacts restaurant profitability and operational efficiency. This crucial aspect of restaurant management requires establishing robust systems for tracking food and supplies, calculating costs accurately, and implementing strategies to minimize waste.
Dimitre started his career as an equity research analyst at Taylor Frigon Capital Management. With the ability to slice, dice, and drill into that historical data, you can identify underlying trends in different datasets. For example, cross-reference sales by menu category to determine the best time to run a half-price appetizer promotion. Also known as “sales per seat” or “average ticket” or “average spend per head. You can use this metric to understand breakfast, lunch, and dinner time averages, and track trends over time. Prime costs account for all the costs required to produce and distribute your product.
The best way to avoid either issue is to regularly record exact amounts of revenue. Fixed costs are the costs that either don’t change or you have no control over the change. This includes your rent or mortgage, equipment costs, insurances, permits, and other operational expenses. These fixed costs typically make up the minority of your restaurant expenses.
Effective financial planning begins with establishing measurable objectives that guide business development over 3-5 years. These goals typically include target revenue growth, profit margin improvements, and systematic debt reduction. Long-term restaurant success depends on comprehensive financial planning that balances current operations with future growth opportunities. Strategic planning encompasses both immediate financial objectives and long-term expansion goals, supported by careful market analysis and resource allocation. Operational efficiency metrics provide insights into space utilization and customer spending patterns.