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Boosting the Accounting Function: A Guide for Restaurant Owners
The food industry is changing. Restaurant owners are passionate about food and wish to share their love for food with others. Entry into the market might have limited barriers, but survival is tough. You are mistaken if you think understanding food and how to make and serve it to your customers will be enough. The restaurant business is much more complex, especially the administration and management responsibility, and restaurant accounting demands your early attention.
Juggling all those numbers, tracking and interpreting them, can be the most complex part of business operations. This is why the majority of restaurants owner often overlook this crucial function. However, restaurant accounting must be taken seriously and best handled by an expert. Luckily, restaurant accounting services make everything simple for you.
You no longer need to fear restaurant accounting as virtual bookkeeping service providers are ready to handle the complex function for you.
So, how do you manage restaurant accounting services?
This is a sensitive and equally complex function, and here are some ways to do it right.
1. Hire an accountant
Start with hiring an accountant to handle the numbers for you. Working with a professional is always the right choice. A professional and experienced accountant can easily take the often too confusing and tedious bookkeeping process. Even if you find yourself good at bookkeeping, having an accountant close will give you the correct interpretation of the numbers, especially when you have a lot of additional responsibilities to look after.
Every new and existing business must have an accountant taking care of its books, helping them understand their business profitability and ensuring that the restaurant complies with all federal, state, and local tax and payroll laws.
To find the best person for the job, ask for referrals from your friends and associates in the business. Always hire an accountant who holds expertise in restaurant accounting and your niche.
2. Simplify restaurant accounting with the right tools
Even if you have an experienced accountant working on your books, you must simplify the function using the proper accounting tools. Not long ago, tracking finances was a tedious job carried out in complicated-looking, multi-columned ledgers. The numbers written one over another and hundreds and thousands of them can easily make anyone confused and frustrated at the same time. Gladly, the practice has changed, and there are tools and technology that have simplified everything.
Restaurants can now rely on accounting software and tools for effective and easy accounting. Some software developers also offer tailor-made solutions to restaurants based on their needs and want.
Made user-friendly, the accounting software is an effective way to streamline and control the restaurant accounting function.
3. Track your accounts and make a list
You will first have to derive a sure-shot method to collect your accounting data before you start listing your accounts. A ‘chart of account’ is crucial to track the proper accounting for your company.
As per Investopedia, a ‘Chart of Accounts “is an index of all the financial accounts in a company’s general ledger. In short, it is an organizational tool that provides a digestible breakdown of all the financial transactions that a company conducted during a specific accounting period, broken down into subcategories.”
When creating a ‘chart of accounts,’ a restaurant business must add:
Once the categories are in place, they can be further divided into sub-categories to make tracking easier.
As soon as the chart is ready, you will have the data compiled in the right category, making the entire job easier and well-managed.
4. Get ready for the tax season
Restaurant businesses need to file taxes, and they must never be ignored. While you can always hire virtual bookkeeping services to manage your bookkeeping process, having a sound understanding of restaurant tax preparation is mandatory for all owners. It is a rather lengthy topic to explain, but we have added a few quick tips for our readers:
- Start with organizing the files. For those working with restaurant bookkeeping services, this is already done for you by the experts. But those who aren’t need to focus on organizing the records as per date under the correct category.
- Work on your deductions and maximize them as much as possible. Outlining your removal in advance and trying to take advantage of as many as possible is a great way to ensure you owe minimal taxes. You can claim several deductions, including costs of goods sold (COGS), marketing costs, software costs, employer taxes, and much more. A professional accountant or reputed virtual bookkeeping services provider can help you identify the required deduction to claim for.
5. Go through your Profit & Loss (P&L) statement now and then
Also known as an Income statement, the P&L statement is one of the most crucial reports for a restaurant business. The information has records of your profits and losses, sales quantities, food, labor, and operating costs, and the combined cost of sales.
Mott restaurant owners do not pay much attention to P& L accounts and review them once e a month. However, professional virtual bookkeeping services experts advise doing it more frequently. The experts recommend a weekly or fortnightly review to understand the business numbers better. When you are abreast of the latest development in the business, you can make effective decisions and save yourself from troubles and costly affairs.
One should use professional accounting software to minimize the efforts of frequently reviewing the P&L statement. There is reliable and high-end accounting software available in the market that is easy to integrate and offers you key information about business sales, inventory, and labor graphics.
6. Aim to understand and reduce prime business costs
Total Cost of Goods Sold (CoGS) and labor costs are the key business cost. Unlike the fixed costs (rent, food, and labor costs), prime or key costs are which you can control and make a significant difference in your p& L statement. The lower your key costs, the more you can expand your profits.
Restaurant accounting software can be the best way to keep a realistic tab over several costs. You can know the actual variance between the virtual and theoretical food costs, identify the actual labor cost and manage several other expenses related to your business. You can have better insights about your business, including accurate numbers of your premium costs which helps in effective financial decision-making.
7. Set up your books
Setting up the books and keeping track of everything is the most complicated yet crucial part of restaurant accounting. The Double Entry system can be tough to master; hence taking help from virtual bookkeeping services provider is always a better option than doing it on your own. While choosing professional restaurant accounting services is the right way, those who decide to go on it alone must always take help from sample accounting online or have a professional teach them how and where to start and continue.
8. Inventory management
Restaurant accounting services are a great help when focusing on inventory management which is integral to effective restaurant management. From buying the right amount of inventory at the right time to save costs to having better control over inventory costs, accounting professionals will help you and guide you towards the best affairs for your business.
Restaurant accounting can be complicated, but there is no need to fret. You can quickly get the right help if you choose the right professional to help you with the proper function. Virtual bookkeeping services are an excellent chance for you to have sound bookkeeping and accounting functions and strengthen the backbone of your business. The outsourced accounting services for restaurants will help you understand the money flow in your business and how you can best utilize your available resources.
In addition, we are an ISO-certified firm that maintains complete confidentiality and ensures high-quality restaurant accounting services with a fast delivery model. To learn how we can help you, contact us today via email at [email protected] or call +1 646-688-2821.
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