Studies show that 62% of small businesses in the United States have in-house accountants. However, hiring an in-house accountant can be an expensive investment.
Instead, there are many ways that you can learn how to improve your bookkeeping for restaurants. Do you want to learn more about the top accounting for restaurant tips?
Keep reading this article for the top tips to improve restaurant accounting.
Understand Restaurant Accounting Language
One of the most important tips to follow to improve your restaurant accounting is to learn more about the accounting language. There are many different terms that you may need to understand to be able to accurately keep track of your expenses.
For example, words like cash flow, profit and loss statement, and even point of sale may be confusing if you are not familiar with common accounting vocabulary.
By taking a course or researching these basic phrases, it will be much easier to understand your restaurant accounting. This is helpful even if you outsource accounting.
It will allow you to understand the reports your accountant gives you and can help you make financially sound decisions.
Next, you must be accurate with your restaurant accounting. Often, it is easy to round up when it comes to your expenses and sales. However, these minor discrepancies can cause significant problems with your restaurant’s accounting.
Even if your figures seem small, they can mess up your accounting analytics and make it harder to do your taxes.
Improving your accuracy will make your accounting more realistic and will help you make educated choices.
Create a Restaurant Profit and Loss Statement
When you own a restaurant, it is also important that you create a profit and loss statement, also known as a P&L statement. This document is often known as an income statement and makes it easier to understand the break up of your expenses and revenue.
It categorizes your revenues and expenses to provide you with more details about your income over a certain period of time. It can help you see if your business is spending more than it earns.
Not only do you need to create a profit and loss statement for your business, but you also need to update it regularly. This will help you keep track of your food and labor costs for your business and other operating expenses.
To be safe, you should update your P&L statement at least once a week.
Regularly Update Your Books
Regularly updating your books is another important tip to follow. Often, restaurants owners put this off. However, it is much more difficult to catch up on months of bookkeeping than it is to do it at the end of each day or week.
To make this task easier, you should account for each of your expenses and sales every single day. When you make this a habit for your restaurant, it will be less overwhelming in the long run.
It will also help you identify patterns in your business. For example, you may notice that certain days are busier than others. Or, you might notice that some of your products are not performing as well.
This will make it easier to update your restaurant strategy and cut unnecessary expenses.
Anticipate Inventory Requirements and Changes
Next, you need to anticipate your inventory requirements and changes when you own a restaurant. This will help you ensure that your restaurant is never understocked or overstocked.
This can be difficult, especially with inventory items with short expiration dates. In these cases, you will often need to schedule more frequent deliveries to stay prepared while avoiding food waste.
There are many business resources that you can use to help you forecast the demand for your restaurant. This way, your restaurant will always be fully stocked, even on days when you are extra busy!
It will also help you save money by avoiding unnecessary waste and expenses.
Choose a Good Point of Sale System
A point of sale system is also known as a POS system. This is the area of your restaurant where your customer pays for your products or services.
While many of these systems just help with credit card processing, others incorporate other payments to help restaurants track their profit.
Choosing a good POS system doesn’t have to be difficult. There are a few key features that you can look for to get the most out of your system.
For example, you can find POS software that offers sales reporting, customer and employee management, and even inventory management. You can also ask fellow restaurant owners to see if they have a good recommendation for a high-quality POS system.
Track POS Data
Not only do you need to have a good point of sale system, but it is also important that you track and take advantage of the data that comes from your point of sale system.
When you have a POS system in your restaurant, they track any orders that are made by your customers and will help them complete their transactions.
However, many points of sale systems will also help business owners track other data, like inventory counts, labor costs, and more!
By tracking this data, it will link the accounting for the front of the house of your restaurant and the back of the house. It will help you understand where your money is going and can help you make decisions to perform better.
Invest in the Right Tools
Investing in the right tools is something that makes it much easier to understand your business finances.
One tool that is helpful for many restaurant owners is restaurant accounting software. This is financial software that also often includes a point of sale system.
This makes it easy to organize your inventory and make accurate, quick transactions. If you are looking for simple financial software, QuickBooks is a popular option for business owners.
Outsourcing is another helpful tool for business owners. It allows you to hire someone else to take care of things that you don’t have time for or don’t know how to do.
For example, you can outsource your payroll or your tax needs. Hiring a professional will ensure that your company is compliant with local, state, and federal laws.
Understand Your Expenses
Next, you need to understand each of the expenses that you have as a restaurant owner. There are several types of expenses, including fixed costs and variable costs.
A variable cost can change each month, depending on how much your company produces and how much it sells. For example, some fixed costs for your restaurant may include labor, utility expenses, and more.
Fixed costs are expenses that will always remain the same. This includes things like rent payments, insurance costs, property taxes, and more.
When you are aware of each of these expenses, it is easier to track them. Plus, it gives you more control over your expenses in the long run. You may even be able to find ways to cut these expenses and increase your profit.
Ask for Advice
As a business owner, you will likely have many other friends or acquaintances in the industry. One thing that can help you improve your business accounting for your restaurant is asking these fellow restaurant owners for advice.
They may have certain systems that make it easy to manage their books or keep track of their finances. They may even have recommendations for tools and resources that make it easier to run your business.
By asking other restaurants for advice, you will be ahead of the game when it comes to accounting.
Hire an Accountant
Finally, you can hire an accountant or CPA to help with your restaurant accounting. Outsourcing this task can save you time and money in the long run and will make it much easier to understand your business finances.
Hiring an accountant can help your restaurant with many tasks, like cash accounting, accrual accounting, IRS audits, and even your business taxes.
Plus, they will have access to tools like Quickbooks and restaurant bookkeeping templates to make it easier to manage your restaurant accounting.
By hiring an accountant or bookkeeper, you will have more time to focus on other important parts of running a restaurant.
When you are choosing an accountant to help with your restaurant accounting, make sure you choose one that specializes in the restaurant industry. Restaurants have unique business structures and require specific accounting methods.
Traditional accountants without a background in restaurants may not have the knowledge or experience to provide you with high-quality advice.
Learn More About Accounting for Restaurant Tips
When you own a restaurant, you must learn more about accounting and bookkeeping for restaurants to keep your finances in order. By following these accounting for restaurant tips, your restaurant accounting will be much less overwhelming!
Do you want to learn more about inventory accounting for restaurants and other business tips? Tax Savers can help! Our blog provides strategies for business, finance, and income taxes in the United States and can help you improve your business.
Check out our business blog to learn more about restaurant accounting and other tips for running a business.