By Samantha Kaylee, Contributor
There are almost 15,000,000 restaurants globally and you have to maintain your distinct position among them. Even for the most renowned restaurants with massive financing and lavish dining experience, the competition is tough. Running the restaurant in COVID is an additional one.
In this condition, bookkeeping can be a headache. Accounting is the whole new world with a different language.
What is the profit and loss statement? What is a restaurant financial strategy? How to calculate the profit, revenue and expenses? All of these are tough for the non-finance person.
This problematic practice can be eased by applying few smart working tactics. Let me explain you these tricks in detail.
Restaurant Bookkeeping Tips
Your restaurant’s bookkeepers are responsible for maintaining the finance and budgets of the restaurants. They can also provide you with valuable advice for reducing the overhead costs and reducing average food cost.
Seems difficult? It can be. Willpower, marketing strategies, and bookkeeping are the main factors that will predict your future in the market.
Therefore, it is essential to maintain adequate bookkeeping practice in your restaurant. Don’t worry with all the complexities, nor hire an accountant and save $53,748/year.
Just follow the following tips and featurelessly maintain bookkeeping.
Ask Others How They Did It
When initiating your restaurant’s bookkeeping, the first place to look is in your surroundings. Don’t be afraid to ask your peers how they manage their books.
When you are aware of bookkeeping usage by others, it will support you in extracting insights and drafting your bookkeeping basics. You can learn about what worked and what didn’t, so you don’t replicate the same mistakes.
This shared knowledge will provide you with an effective and efficient that is already tried and tested, contributing to saving time and money.
The global food market will reach $4.2 trillion by 2024; you should sharpen your claws to be the part of that much bigger finance market.
Know Bookkeeping Basics
A common obstacle for a lot of restaurant owners is just not understanding the basics of bookkeeping and the common terminology. If this is you, don’t feel bad. It’s amazingly common among people who don’t have an accounting or finance background.
Therefore, it is suggested to learn basic terminologies and rules. You don’t need to get a degree in this or become accountant by yourself. Just remember the basic ones.
Terminologies like; debit, credit, balance sheet, cash inflow, liabilities and many more. These are the common one, and as an owner, you should be aware of them. Many websites provide knowledge regarding basic terminologies. Google what you don’t know and you’ll be on the right track.
Precision is Necessary
While you are managing your bookkeeping, the essential element is the precision. Don’t round off your figures. You have to calculate even till the four-place after a point. Even if the value may seem to be negligible, add it similarly.
Here’s why.
If you round off even a single dollar less or more, it will disrupt the whole procedure. Even that $1 daily will cost you $30 a month and $360/year. The industry has already lost $120 billion; you can’t afford to increase the debt more.
The loss will significantly impact revenue, food costing, profit, loss, taxes, and other analytics. Observe even a single dollar in your profit and loss. You may lose better business opportunities by underestimation and may accept a devastating offer by overestimating it.
Your Books is a Daily Practice
Bookkeeping is more dependent upon your persuasion and attention. Your habits and keenness to calculate every dollar will predict the accuracy of the bookkeeping. This process shall be conducted daily.
Make it your habit to maintain your book daily. Daily bookkeeping will provide you with a complete overview of the day-to-day earning and restaurant expenses.
One more benefit is that this habit will turn you into an expert business and financial analyzer. Within a year of this practice, you will observe different trends and traffic of consumers.
Which dish is more preferred in which season? All of these will be beneficial in increasing your restaurant business.
Create a P&L Statement
Accountants create the Profit and Loss (P&L) statement to break down the cost and revenue for ease of understanding.
The P&L statement is the most valuable tip; you should also maintain the profit and loss statement. Jot down every expense and profit -- labor cost, bills, or sales.
But, if you are an expert, you can maintain it on a monthly or even early basis that is entirely dependent upon your restaurant type, sales, and requirements.
All of these calculations and numeric that you will acquire from the profit and loss statement can be used to take future decisions.
Track Your Restaurant Expenses
The next tip in the line after maintaining all the record is to be aware of your expenses. It would help if you acquired complete grasp on your expense. Either it is a fixed expense or running expense you should calculate its priory.
The fixed cost is your monthly expense that is obligatory; salary, rent, equipment. The running costs are the overheads or the variable costs.
These can be expenses like electricity bills or cost of food spillage. The expenses are the general one and can be controlled by you.
Measure Your Restaurant’s Revenue
As the record of expenses is essential, the track of revenue is also equally important. You should have a complete record of earning from food sales, catering sales, and merchandise sales.
If you are not calculating your revenue and are ignoring the additional weekly income, it may reflect that you are going in loss.
Similarly, if you overestimated your income, it will lead to over expense, and you will be in hot water.
To avoid all of these confusions, track your revenues. This will also predict the annual revenue growth of your restaurant. For some context, the restaurant industry is growing at the rate of 4%/annually.
Use Restaurant Accounting Software
This one is for me, if you are not able to do all of that traditional stuff and face difficulty in doing manual calculations, then use the restaurant accounting software.
There are software that did all of the resultant bookkeeping automatically. All you have to do is add your data.
Some of the best performing restaurant accounting software to consider include Restuarant365, QuickBook Online, FreshBooks, ZipBook, and TouchBistro.
Bottom Line
Accounting and bookkeeping is the most challenging thing for many of the entrepreneurs diving in the restaurant business.
There are too many openings of expenses and revenue generation that may confuse you. Therefore, it is essential to do bookkeeping by yourself.
You can either use the tips mentioned above or the accounting software. The main purpose is to maintain bookkeeping effectively and efficiently.
About the Author
Samantha Kaylee is currently working as a Blogger at Crowd Writer and Assignment Help UK and Assignment Assistance UK. She loves to share her personal thoughts and experiences. Samantha is a regular reader of technology blog. She also holds a Masters degree in Accounts and Finance.
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