You have a talent for cooking and a passion for hospitality. Maybe that’s why you opened up a restaurant in the first place. According to research, UK restaurants have an annual turnover of more than £40 billion.
We get it. People love food; they can’t live without it. So it is no surprise that great food, fine dining and good customer service are probably your first love.
Therefore, it makes sense if “the other things” in the business, such as accounting and bookkeeping, don’t drive you as much as your main passion. We understand that it’s not your thing. That’s why we are here to help you.
Long hours, high overhead, wastages, and trouble generating a profit are some obstacles facing restaurant owners in their quest for success. However, by managing your finances properly, you can actually help your business achieve the passion that initially drove you to start it in the first place.
Sadly, a lot of restaurant owners overlook their bookkeeping. But as soon as your restaurant accounting falls behind, It becomes challenging to get back on track. You should know that the restaurant industry’s profit margins are too tight to let your bookkeeping fall through the cracks.
Effective restaurant bookkeeping starts with you, but if you feel you don’t have the time and resources to do it perfectly, Pearl Lemon Accountants is here to help you. Our experts will keep your books up-to-date so that you can stay ahead of your competition and makes profits.
If you’re ready to start your bookkeeping journey, Contact us today!
Restaurant bookkeeping or accounting is keeping an eye on your restaurant’s finances and altering the budget to ensure your business gets off to the right start and stays profitable.
Having a solid business plan, being organised, and having the discipline to maintain accurate accounting records are critical components in determining whether or not your restaurant will succeed. For this, restaurant bookkeeping becomes a really crucial aspect.
Here’s a rundown of what goes into restaurant bookkeeping:
We’ll start by helping you determine how to record your sales accurately. QuickBooks for restaurants is a reliable accounting solution used by many restaurateurs. Our team will help:
Accounts payable setup will be the next phase in your restaurant bookkeeping process. You must pay suppliers this money in exchange for the products and services they deliver. Everything from your delivery partners to your utilities and internet connectivity to the rent for your building is included in this. If you want to continue doing business with your vendors, keeping them satisfied is critical.
There is a lot more at stake here than just employee salaries. Their benefits, including paid time off, insurance, and federal and state taxes, are all covered by payroll.
You run a significant risk as a business owner if you handle your own payroll. The fines and interest you’ll be charged can be hefty if you file your payroll taxes improperly or after the deadline. You will be subject to a high level of liability. But you don’t need to worry about that. We’ll take care of your payroll so you won’t be caught off guard.
This useful bookkeeping process checks every transaction across your accounts to ensure that your ending balance is correct. If your accounts don’t add up, money may be misused or, worse still, stolen.
The most crucial step in the entire bookkeeping process is reconciling accounts. The only way to ensure that you have tracked every financial transaction is to do this. All accounts must be reconciled, including your bank accounts, credit cards, loans, lines of credit, and payroll responsibilities.
Account reconciliation guarantees that the financial reports you are looking at are correct.
If you aren’t using financial reporting at your restaurant, then you’re about to crash because, in essence, you are operating your establishment blindly. It’s critical to regularly review your financial records because restaurant profit margins are so tight.
In addition to labour ratios, restaurants should consider sales vs cost of goods sold ratios. Another ratio that many restaurants should consider is the prime cost, which seeks to keep the cost of food + beverage + labour at 60% to 65% of total sales. Restaurant financial reporting has the power to make a positive or negative impact on the business.
The financial bookkeeping of your restaurant depends on reports. In a perfect world, you should also receive your regular monthly balance sheets and income statements, along with daily information on what is being sold and running analyses on table turns, the average price per tab, and sales by food and alcohol.
A quick summary of some of the most important accounting and bookkeeping reports follows:
Now let us get into more detail.
Your income and expense statement is shown here. It displays your overall revenue and outgoing costs for a time frame. The value derived from the P&L will vary depending on the level of detail used to create it. Your total income, expenses, and profitability are all provided in the P&L.
In the end-of-day sales report, you can view your daily sales by category, including food, beverages, and tax. Typically, your point-of-sale system is where you can get this report.
The chart of accounts organizes your financial transactions into sections that will provide a clear picture of your restaurant’s financial health.
This is the most crucial financial document for every business. You may see your financial sources and uses in this statement. Your net income is the first step, explaining where the money went.
The assets, liabilities, and equity of the corporation are listed here. In the end, it demonstrates the value of your restaurant. Importantly, it offers vital ratio analysis that explains how the business is going.
A controllable cost report gives you an understanding of the company’s spending, which can sometimes influence how much it will make or whether it will lose money.
“Use your strengths and outsource your deficiencies”, as they say in the corporate world.
It may be tempting for a business owner to undertake all responsibilities, but outsourcing your restaurant accounting services will relieve you of the burden and liability and free up your time to concentrate on the development and management of your restaurant.
The first step to becoming a successful manager is learning how to assign duties. Numerous other factors affect your restaurant’s bookkeeping, including the choice of the POS system, inventory management, theft prevention, and cash handling. As your business grows, your bookkeeping system must adapt to your changing needs.
Are you all set? Set up a financial consultation for your company to get things going.
The right time is when you start seeing your financial management go down the drain. Bookkeeping requires you to be up to date and up to speed with all your financial activities.
Accountants can advise you on organisational structure, filing requirements that keep your firm compliant with federal and state laws, and other matters that could save you from paying costly fines along the way.
While you can absolutely take charge of your restaurant’s finances, it may be a good idea to enlist the assistance of someone proficient with numbers if you aren’t one yourself. All restaurants should employ an accountant to assist with year-end planning and the accurate filing of income tax forms.
No matter the size of your company, bookkeeping is essential to managing your finances and legal affairs.
Your business can view its financial health by maintaining accurate records, including income statements, balance sheets, and cash flow statements.
Regular data entry, transaction collection, invoicing, debit tracking, and maintenance and oversight of your financial record are all tasks performed by bookkeepers. They also manage payroll, make payments on bills, complete tax returns, and even keep track of office supplies.
When you allow us to keep track of your finances, you give yourself more time to do your work and please more clients.
It's a win-win situation for everyone.
Aside from that, you'll also gain financial stability because your assets and liabilities are managed well enough not to cause any trouble for you in the future.
So let our experts work for you, and you won't regret it even a bit.
Book a call today to get started.