As a busy restaurateur, you may think that bookkeeping chores are the last thing on your priority list. Yet precisely because the business is so fast-paced, it’s crucial to keep your numbers current.
One small variance in profit margins or cash flow can turn into a big problem very quickly indeed, if you’re not in a position to notice it immediately and nip it in the bud.
Check out these 5 best practices for restaurant bookkeeping.
1. Record Sales Daily.
Copy or import the sales from your POS system into your accounting software. What you’re aiming for is books that correlate with your bank statements. If you save up all those credit card charges for a weekly or monthly deposit, you’ll have a hard time doing analysis later.
Ideally, your accounting software and POS system are integrated so that this is done automatically, with no effort from you. At Xendoo, we integrate your bank transactions with your books, so data entry is always up to the minute.
2. Reconcile Bank Statements Every Month.
Don’t let them sit around for 3, 4, 5 or more months. If you’ve forgotten to enter a payment or a sale in your books but it has been processed by your bank, the sooner you catch this oversight the better. In an extreme case, not knowing how much you really have in the bank could lead to bounced checks.
For every account that you receive a monthly statement — bank, credit cards, lines of credit and loans — compare what their statement says with what your books say. If there are discrepancies, track down what happened and fix it.
3. Pay Your Bills Promptly.
Vendors love customers who pay on time or early. Doing so will get you better deals and early payment discounts. On the flip side, being late will rack up interest charges. It’s a no-brainer which will be better for your profits.
To make sure this happens, you should have a defined Accounts Payable process. This system records invoices, pays online with a credit card or digitally generated checks, and automatically enters the expenses in your books. Record invoices once or twice a week and pay any that are due once a week.
4. Really Look at Your Financial Reports.
You won’t learn what you need to know by just glancing at the bottom line. Your profit & loss statements and balance sheets can reveal crucial statistics for a restaurant business such as:
• Profit margin: gross profit ÷ total revenue
• Sales vs. cost of goods sold ratio
• Prime cost: ideally food + beverage + labor = 60% – 65% of total sales
• Compare current profit & loss to previous months and years
In an industry where profit margins are tight, having current information about your financial health is the key to success. That’s why Xendoo guarantees delivery of your P&L statement by the 5th business day of every month.
5. Outsource Your Payroll.
Payroll processing can be quite time-consuming, especially given the complex shift scheduling of most restaurants. It also comes with high penalties if you make mistakes in calculating payroll taxes, or don’t file the taxes on time.
Payroll services are generally affordable, and can often be bundled with other accounting services. Xendoo offers packages that include payroll processing for a budget-friendly flat monthly fee.
These basics of restaurant bookkeeping will give you a firm business foundation. But if it still seems like work you don’t have time to do, consider putting the accounting expertise and convenience of Xendoo on your side. Then you can spend all your time doing what you do best — delighting your guests.