With frequently moving sales, perishable purchases and an ever-changing workforce, restaurant management remains a challenge. This extends to additional complexities in bookkeeping. Here are a few of the challenges that fall to restaurant bookkeepers beyond typical bookkeeping. These are extremely important to note for managers or owners doing their own bookkeeping.
Pace of Decisions
If you have a dish constantly sent back to the kitchen, you’d pull it quickly form the menu – at least until you satisfied a solution for the problem. This is a similar thought process in restaurant bookkeeping. If you have a menu item, staffing plan or promotion that costs you money instead of earning it – short- or long-term – you need to react quickly before it pulls your profits under with it. By insisting on timely updates to profit and loss statements (P&L), you can easily isolate problems or potential problems for quicker adjustments.
Most restaurants hire few salaried employees with most paid wages based on timesheets. This requires additional time double-checking for reported hours against schedules (and taking into account any scheduling swaps) as employee hours can verge on fluctuation from part-time to full-time status, triggering additional compensation. As well, any restaurants offering table or bar service must properly identify recorded tips to associated employees. As these tips are taxable as income, it is the restaurants responsibility to properly record these earnings for employee tax purposes when tips flow into the restaurant and are then appropriated from the restaurant to the server.
Fluctuation of Inventory Costs
Unlike other industries, restaurants often find themselves on the receiving end of agricultural commodity fluctuations. If there is a harsh winter freeze damaging citrus supplies across your providers, but customer expect orange juice with breakfast, you have some decisions to make. At what point of the surely increasing wholesale costs must you adjust your prices to consumers? How long will the fluctuation last? Is it worth giving consumers sticker-shock for a limited time, or will the fluctuating expense back your business into a bad corner? In addition to the fluctuation of agricultural expenses, you must always constantly judge if your menu decisions make good economic sense looking at your cash flow. Perishable items sitting around and not ordered for plates spoil. Spoiled items don’t make money, even though they cost money. What kind of decisions should be monitored and made to protect cash flow and how often?
These items, in addition to the typical business expenses of rent, equipment repairs, sales tax and employee benefits must play into the bookkeeping role of restaurants. Because of these exclusive needs, it makes sense to find a bookkeeper or bookkeeping staff familiar not only with hospitality bookkeeping, but specifically restaurant bookkeeping. If it’s time for your restaurant to receive a little individualized care, contact one of our professional consultants. You get back in the kitchen and we get your books get back in order.