Restaurant management requires a variety of skills, from culinary knowledge, brand marketing, customer service and even human resource management. Managers must hold knowledge of inventory, menus, trends and schedules. And just when you think that’s more than one position can bear, add in some basic bookkeeping knowledge.
Even though some small restaurants see managers doubling as the business’ bookkeeper, complete control is usually not required. In other words, breath easy. CPA certification is not mandatory! However, here are a few basics all restaurant managers should know to improve their restraunt’s success:
Managers should know at all times the amount of cash coming in and leaving the restaurant. This is not to make drastic changes (most of the time) or for interesting trivia, but so that managers have an idea of the business’ patterns and seasonal trends. This helps maximize future profits by anticipating leaner times with strategic expenses and knowing when you can afford to invest more profits.
Keeping an eye on your Point of Sale (POS) reports typically keeps track of all credit card and cash sales, as well as inventory records and receipts. This is often the first red flag if a business is in trouble and often the greatest signs pointing to vulnerability for internal theft. Make certain all sales records and receipts are regularly ready for recording in a Profit and Loss document (P&L).
Profit and Loss Statement (P&L)
This is your restaurant’s income statement, summarizing income, expenses and inventory. These individual reports build your overall financial profiles over time and solidify the snapshots of records and cash you see on a daily basis. These weekly reports should be monitored on a regular basis to look for errors or inconsistencies early.
Even if as a manager the day-to-day bookkeeping falls to another individual, you should be prepared at any time to log on and make sense of reports. You must be able to read records and pull simple reports in cases of accounting employee loss, employee illness or time off. As well, having confidence on your accounting software makes you more likely to engage with financial reports on a regular basis instead of letting the information pile up until you’re desperately looking for information.
While it’s not a requirement that restaurant management be expert accountants, knowing key financial information not only protects you from being hit by surprises but also helps the restaurant function better with involved, well informed decisions on everything from promotions to staffing. Keeping on top of these key areas improves your function and your business.