This article on restaurant accounting is taken from our quarterly overview of Canadian news, a newsletter published by the Canadian member firms of Moore Stephens North America. These articles are part of our mission to become the partner of choice for your success by keeping you up to date.
When you’re running a restaurant, it’s often easy to focus on the food and hospitality, and relegate accounting to the status of a secondary task. However, as with any business, you want to make a profit and keep it. Good accounting systems are essential to your success. Here are a few tips to help you:
Choose the right accounting software
Not all accounting software is created equal. The right system should not only help you keep track of your sales and expenses, it should also enable you to keep your inventory up to date. And choose the right point-of-sale system. Ideally, it should be integrated into your accounting software. This eliminates the need to enter point-of-sale information into your accounting software, and allows you to keep your reports up to date in real time.
Continuously monitor the most important reports
Many different reports will help you manage your business, but the most important are usually food inventory costs, food sales, beverage sales and operating expenses. It may not be sufficient to run these reports monthly, and you may find it more beneficial to produce and analyze them at least once a week. An income statement and profitability analysis are also essential to help you understand your costs and improve your profits.
Be aware of industry benchmarks and key performance indicators
In the competitive restaurant industry, it’s just as important to understand other businesses as it is to understand your own. Benchmarks help you know where you stand, and where you can improve on your competitors.
Stay in control of your expenses
The restaurant industry moves fast, and you can easily fall behind on your receivables if you’re not organized. For cash flow purposes, make sure your invoices are staggered according to a precise cycle, and don’t make the mistake of paying late. A supplier can refuse delivery if he hasn’t been paid on time, which can be catastrophic for fresh food stocks.
Use a payroll service provider
Many restaurant managers keep a close eye on hours and wages. However, when it comes to paying employees, naturally keeping track of payroll deductions and benefits can be time-consuming, and may make you liable for payroll errors.
Consult a professional accountant
The right accountant will know the restaurant business inside out, and will help you analyze your financial information while providing advice and guidance.
This article on restaurant accounting was written by Carly Matheson, CPA, of DMCL. This document was written as part of our quarterly overview of Canadian news, a newsletter published by the Canadian member firms of Moore North America.
