The culinary art requires great talent and passion, but while you are growing in sales the only way to maintain profit is through good bookkeeping. With the proper accounting management of your establishment you can ensure success exponentially.
What is restaurant accounting?
Restaurant accounting includes the maintenance and control of expenses and income that occur daily in your business. But it is not as simple as this, it also focuses on keeping control of the Cost of materials sold and the inventory up to date, reducing the margin of losses and giving you a better control over how and when to replace your merchandise.
In general terms, accounting makes sure to keep the daily record of transactions including the record of assets, debt and capital in the business. Good strategy, organization and a commitment to accurate accounting are essential factors for success and sustainability. This practice is one of the most important aspects in the task of running a restaurant.
Here are some of the responsibilities involved in restaurant accounting:
Know where your money is being spent.
Keep track of how much you are spending.
Understand the origin of your earnings.
Record Assets and Liabilities.
Understand how much money you need to earn to be in profit.
Bank reconciliation.
Prepare financial statements, budgets, and records of accounts receivable and payable.
Tips for your accounting of your restaurant
Practicing bookkeeping at your establishment is crucial, but it can be difficult to think about managing your books for the first time. Here are some tips that can help you.
1- Communicate with other colleagues in the sector.
Do not think that you are helpless, start by asking other restaurant owners how they do to keep their books updated. It will give you a clearer vision of where to start. You may decide to handle it yourself but most likely you will have to seek professional help.
2- Keep track of your expenses.
Most of the anxiety caused by financial problems in a business is due to poor control of expenses. Not keeping accurate track of every penny spent is a very bad idea in the long run. Many of us sometimes believe that it is not important if it is $33.25 or if it is only $33 and in the end a little more is not that serious but let me tell you that each one of those cents that are not being registered can create a big problem for you in the future. .
Restaurants have different types of expenses, we classify them as fixed, variable costs. I'll explain a little what they consist of:
Fixed Costs: they are independent of the productivity of your business and no matter how sales are, you will always have to pay them. Eg local rent, fixed salary of workers, insurance, equipment.
Variable Costs: They depend on sales and the type of merchandise you are buying. Eg concoctions, food.
Just make sure the profit margin covers the fixed costs, so you can stay in business even in times of slower performance.
3- Do not forget to save your receipts.
Receipts from suppliers are essential to be safe in the event of an audit. Every time you make a purchase, whether it is for merchandise or a simple expense of gasoline for your car, you should keep the receipt. The IRS wants to be sure that that purchase you made is exactly what you're saying it is. Receipts must be kept for a minimum of 3 years if you have a correct accounting record. You can use the traditional method of keeping them in the shoe box but I recommend using an app where you just take a photo and the expense is directly associated with it. Quickbooks offers this option.
4- Use an accounting software.
From the beginning you should make it a habit to use all the necessary tools to stay up to date. Choosing the right software will help you to have all transactions recorded from the first steps of your business, every strategic move you make should be reflected in your books, thus avoiding problems with the IRS in the event of an audit. Quickbooks is one of the most popular software on the market with a great reputation among thousands of different businesses.
5- Use a POS point of sale system.
More and more people use electronic payment methods to make their purchases. In your restaurant you should install a sales system to facilitate access to credit cards and electronic money. POS systems are software dedicated to sales management. You can control the cost of each transaction and manage your inventory from there. In addition to processing payments from there you can keep track of all the sales taxes you collect.
Some of these software can be:
Square
toast
Clover
Stripe
6- Hire a payroll provider.
When you start to grow your staff you should consider using a payroll provider to carry out the payment to your workers. This will save you time and you will have all the information you need to be able to pay employee taxes. I recommend that you contract payroll services through software. Always remember not to handle this software by yourself, it is better that you talk to your accountant to avoid mistakes.
Some of the software most used by restaurants to manage their payroll are:
Taste
ADP
Paycheck
Stripe
What does a restaurant accountant do?
A restaurant accountant oversees the finances and budgets of a restaurant. Restaurant accountants or bookkeepers can often offer advice on how to reduce overhead and food costs at your establishment. Restaurant accountants are in charge of the following:
-Track your expenses and deposits.
-Generation of a profit and loss statement.
-Maintenance of records of tax obligations.
-Supervision of payroll and supplier invoices.
Should I hire a restaurant accountant?
Restaurant bookkeeping can quickly become too complex for restaurant owners to handle. If you're not confident in your ability or don't have the time to keep accurate and complete books, consider hiring an accountant.
Here at Lefer Accounting Services we specialize in accounting for fast growing small businesses. We work in accounting for Restaurants and Food Trucks. We help them manage their expenses and take control of their finances.
We would love to be part of your success and that is why we want to offer you a 50% welcome bonus for the first month of our services. Just send us an email and we'll get in touch.
This offer is for a limited time so take advantage now.
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