Get a Hold on Your Finances: Bookkeeping Tips for Restaurant Owners
Running a successful restaurant is no easy feat. Along with managing a team, creating delectable dishes, and providing top-notch customer service, restaurant owners also need to keep a close eye on their finances. Without proper bookkeeping techniques, it can be challenging to track expenses, monitor profits, and make informed financial decisions. In this blog post, we will discuss essential accounting tips specifically tailored for restaurant owners to help them get a hold on their finances and ensure their business stays profitable.
Understanding the Importance of Proper Bookkeeping for Your Restaurant Business
Proper bookkeeping is crucial for restaurant owners to understand the financial health of their business. By keeping track of expenses, revenues, and profits, you can make informed decisions that can ultimately lead to increased profitability.
The best way to do this is with an accounting system, once your bookkeeper has entered all your transactions in you can see the position of your business, but there are tips to get your bookkeeper working with you.
In my time I have seen a lot of mess in my client’s work that I take on and preventing this mess will lead you to victory and I will provide extra bookkeeping techniques for profitability.
Bookkeeping Tips
Here are a few tips that we at www.clientsneeds.com.au have learned to keep your bookkeeping in order,
- Make sure to keep proper track of your customer receipts, not the paper version, you need to make sure to have a POS system that keeps track of the sales you make, so the end of the month you can print out a report showing cash & Eftpos sales so your bookkeeper can put in a monthly journal. If you make $10,000 worth of sales on a weekend those sales may not come into the bank until Monday which may be the 1st day of the following month, this means you won’t record accurate monthly sales and your GST timing will be out.
- A lot of hospitality businesses buy stock that is of a GST FREE nature, for example, raw meat, there is a list on the ATO website see this link GST-free food | Australian Taxation Office (ato.gov.au)
This means that you need to make sure you enter in the transactions correctly, I have seen cases where employees have entered the whole thing as GST but most of it should have been GST-free. This causes major cashflow problems and of course, more accounting fees to fix it all. I find the best way is to use the MYOB Intray, I find MYOB is the best software for a hospitality business as the payroll & Receipt management is the most flexible, you can take a photo of the invoice and it uploads directly into MYOB ready for your bookkeeper to match it to the transaction.
Bookkeeping is more technical than you think.
- Keep your chart of accounts simple and consistent, if you do this you can compare each month’s income and expenses to determine what is hurting or helping the business, for example, if you spend an extra 10% on advertising will your sales also increase?
You can also use this to budget, for example, if you decrease your cost of product by 5% how much increase in profit will you expect?
By understanding the importance of proper bookkeeping, you can set your restaurant up for long-term success.
The Role of Cost Control in Maintaining Profit Margins
One of the most critical aspects of running a successful restaurant is controlling costs to maintain healthy profit margins.
Proper cost control can help you optimize your expenses and maximize your profits.
Payroll is one area where cost control is crucial. By effectively managing your payroll, you can ensure that your labor costs are in line with your budget, this ensures you don’t overspend if you don’t need to. Additionally, monitoring your ingredient costs and negotiating with suppliers can help you lower your expenses and boost your profitability.
But there is a major issue in this which I find even the largest of companies make the same mistake… if you reduce too many wages you may upset your customers by not having stock or taking too long to serve them this could lead to a reduction in sales.
Also if you buy cheaper products to try to reduce product costs you may also upset your customers as they may be after a certain quality, for example, if you make a very yummy lasagna then decide to reduce costs by purchasing a premade lasagna you will definitely lose me as a customer.
If you find you don’t have the skills for this you can contact us for some bookkeeping help at Pricing – Clients Needs Bookkeeping
