Restaurant accounting can be a tough task to master even for the most seasoned restaurateurs due to the inherent complexity, greater need for accuracy and efficiency, slim margins and ultra-high competition in the field.
Even the restaurants with a well-setup accounting system need to periodically update their accounting standards and improve their expertise to improve their bottom-line lest they run a chance of spending more time, cost and resources which impacts the overall profitability of the business. And as for new restaurants, it is quite common to run into problems without the guidance of a seasoned accounting expert.
As a back-office accounting firm, we folks at Outsourced Bookkeeping offer consultation for restaurant accounting also offer Restaurant Accounts Payable Services. If you are new to the restaurant business and seek guidance for restaurant accounting then this blog is for you. Here we give you basic outline of restaurant accounting, and give you a list of things you must keep in mind to optimize your restaurant accounting process:
Get an expert bookkeeper on board:
Recording, tracking, and documenting all the orders and financial information are where the accounting starts and a bookkeeper is the specialist who accomplishes the task with accuracy and efficiency. Your bookkeeper verifies the orders with receipts, keeps an eye on the budget, ensures accuracy of the orders, verifies time cards and respective payments, reconciles vendor invoices, prepares deposit slips, maintains sales tax records, and prepares periodic reports and more.
Though most owners or supervisors, do it themselves, having a bookkeeper makes things easy for you especially when your business gains traction and hits the ground running. So always ensure you have an expert bookkeeper at the helm. In case you need help, Outsourced Bookkeeping can lend our expertise with our outsourced bookkeeping services.
Choose the right accounting method and invest in accounting software:
The most efficient and easiest way to reap rewards with the all the data collected and tracked by a bookkeeper is to invest in accounting software that perfectly caters to your business’s needs.
Accounting software tracks your revenue, creates customized invoices, streamlines your tasks, and makes your profit and loss statements offering more visibility to review your cash flow and financial status. Not every accounting software is cut out for the restaurant business, so you must make sure that your choice of software has all the features and tools that perfectly caters to your business.
Just like other business, a restaurant can choose between cash method and accrual accounting methods based on their preference. In general, our accountants at Outsourced Bookkeeping usually suggest accrual methods for restaurants that generate income greater than $1 million in a year, others can take their pick based on their preferences.
Pick the right POS system:
The point of sale system for restaurants not only simplifies the communication between the wait staff and kitchen, but also tracks your sales, food usage, acts as a time clock, helps you run your operations, manages payroll. It is an indispensable tool for cash, inventory and order management so pick a smart POS system that can help you with back-office reporting and also easy to use for your department.
Get your Chart of accounts done:
In restaurant accounting, a Chart of accounts helps you categorize your entire money that flows in and out of your restaurant business. It includes revenues, expenses, assets, liabilities and equity to give you a comprehensive picture of the cash flow.
Again, these charts can be further broken down into specific sub-categories like restaurant supplies, sales, marketing, etc. All these categories and sub-categories are found under the hood of Charts of accounts to help you give a simple picture of money flow in and out of business.
While the above aspects are fundamentals, you need to track and keep a close eye on following accounting trackable.
Inventory and Cash Management: You must track your supplies and consumables to assess the food value to arrive at estimated average inventory costs. This helps you set up an inventory management system based on the usage of the inventory and size of the restaurant to reduce waste and foster optimal usage.
Similarly, the cash coming in and going out must be tracked using periodic reports – daily, weekly or monthly to give you a comprehensive picture of the cash flow to help you optimize.
Reconciliation & Financial Reports: Bank accounts credit cards, loans, and even payroll liabilities must be accurately reconciled to avoid complexity and improve the transparency of a business.
All the financial data you collect to analyse is of little use if a business does not follow a structured financial reporting process. Restaurant accountants must analyse the data and track key KPIs that include Prime Costs, Overhead Rates, Gross Profit and Cost of Goods Sold to help you assess the status and plan for improvement.
Restaurant Accounts Payable:
Accounts Payable is a vital cog in restaurant accounting which is time-consuming, and less-rewarding but also the most important efficient way to optimize the operations and reduce the cost.
Paying the bills accurately and efficiently is key for consistent supply chain management, successful vendor relationships and optimized operations. But most of the businesses falter in setting up an optimized Accounts Payable and reaping rewards of a streamlined AP process, if you are new to the business and lack expertise we recommend you to seek help from our Accounts Payable experts at Outsourced Bookkeeping.
We offer dedicated and customized Restaurant Accounts Payable Services that can help you reduce your costs, save time and improve your overall bottom-line significantly for more info on our Restaurant Accounts Payable Services, come this way : https://outsourcedbookeeping.com/bookkeeping-and-taxes/accounts-payable-processing-work-for-restaurant-chains/