Anyone who’s watched a reality kitchen show knows how hot and hectic the restaurant business can be – from small fast-food stands to fine dining. But pressure doesn’t end outside the kitchen doors. Typically, small margins in the restaurant business means that failure to pay attention to bookkeeping and accounting can be another kitchen disaster waiting to happen.
Sporadic Financial Reports
Restaurants doing their own accounting often struggle to provided the basic accounting such as payroll, sales and tax reporting. That leaves little time and attention for monthly financial reports and forecasting. These items play – or should play – a significant role for restaurants in making decisions for labor, food and beverage orders, marketing and general management decisions. Weekly summaries allow you to stay on top of these indicators for more effective business decisions.
Lack of Detailed Payroll Reporting
When kept in-house, restaurant accounting for items such as payroll typically cover the basic functions and expenses. With dedicated virtual accounting, you can provide more detailed tracking of labor expenses by kitchen, front-of-house and management. This helps you forecast payroll expenses more accurately and make better informed decisions on scheduling and compensation.
Failure to Follow an Efficient Purchasing System
There are a lot of purchases and transactions that occur weekly and even daily in restaurants. It’s easy to become overwhelmed by purchase orders and receipts, not only leaving messy books but potential errors. Vendor relationships in the restaurant industry are extremely important. The quicker you pay your vendors, the more likely they are to help you out of future jams. Make certain that all your expenses are recorded accurately and paid promptly for the smoothest operation.
Lack of Tracking and Theft
Restaurants tend to experience higher issues of theft than other businesses – and not necessarily from external hands. Because of the quick nature of transactions in a very fast-paced industry, it’s easy not to immediately identify inventory theft and, yes, even profit theft. By utilizing a dedicated, professional accounting system for your restaurant you add a layer of protection and expediency in watching for trouble spots.
Inaccurate accounting not only causes an internal headache, but it’s multiplied if errors continue unchecked during tax reporting. Sales tax boards usually don’t express sympathy for a lack of information, misinterpreted data, late filings or just plan carelessness. Instead of locking yourself up with receipts and invoices 48 hours prior to every tax deadline, rely on consistent, accurate information by people who actually keep up with tax regulation updates and changes affecting your business.
When it comes to restaurant accounting, task assignment shouldn’t differ from any other area of the business. You wouldn’t expect the hostess to suddenly serve as a line cook, or a busboy to jump behind the bar and mix drinks. Make sure your accounting – the life blood of your business – receives just as much attention and respect, by seeing it as a designated, professional task.