If you run a restaurant, you’d be forgiven if nailing customer service and serving top-quality, delicious food are at the top of your priority list. What’s more, it’s understandable if those ‘behind the scenes’ jobs get lost in your passion for delivering an all-around brilliant dining experience. The thing is, though, the tasks that you sometimes find yourself pushing to the bottom of your to-do lists each play a key part in keeping the clogs at your restaurant turning, and bookkeeping is no exception.
We get it, you’re probably thinking the thought of bookkeeping sounds boring but honestly, understanding what it is and, more importantly, appreciating its value can have a huge role in the success of your restaurant. Put simply, however big or small your restaurant is, bookkeeping is essential, not just for now but to help you prepare for the future too. And remember, if you start to neglect bookkeeping, then it’s difficult to catch up.
So, what exactly is it? In short, restaurant bookkeeping is essentially recording your financial information, so you can see what money is coming in and what cash you’re spending. Bookkeeping shows you whether you’re balancing the books each month, so you can then pay for the likes of stocks, labor, and taxes. Better still, you’ll also be able to see how much revenue your restaurant is making, and let’s be honest, while passion keeps our hearts pumping, it’s the profit that keeps our head in the game.
Whether you’re a bookkeeping novice or are an experienced restaurateur looking for a few tips on how to improve your current financial strategy, then the team of experts at Prix Fixe are here to help. Thanks to our extensive knowledge in the world of accountancy, we’ve broken down the ingredients to successful bookkeeping and talked through our basic recipe to getting it right.
Record sales properly
When it comes to restaurant bookkeeping, the first thing you need to do is determine how you will properly record any sales you make. Do this daily rather than weekly or monthly, so you can keep on top of it. Why not allocate specific time either first thing in the morning or last thing at night to make sure you don't let the job slip?
Keep an eye on expenses
We all like to see what money is coming into the business, but if you don’t pay close attention to what’s going out, you could land yourself in hot water. If you’re taking on the role of DIY bookkeeper, then be sure to keep track of every fixed, variable, or mixed expense leaving your business.
A top tip from us is to open a business bank account and maintain it. This will make it much easier to track any money spent, including when and where the cash went. Whether you’re doing your own bookkeeping or are supported by experts like those at Prix Fixe, you’ll find separating your personal and business accounts will save you a huge amount of time in the long run.
Like other professional bookkeepers, Prix Fixe can support you by providing reports on your financial outgoings, but if you’re doing it yourself, then it’s wise to understand what outgoing costs to take into consideration, so you can get a better appreciation of how your restaurant is performing.
Cost of goods sold (COGS)
Cost of goods sold (COGS) is probably one of the most obvious financials when it comes to restaurant bookkeeping. This is the total cost of all the ingredients you use to make the food you serve, including the likes meat, vegetables, and even herbs. You’ll probably find that COGS makes up a large fraction of your outgoings, so it’s important you get it right.
Beverages are a separate expense but don’t worry when it comes to boosting your profits, ; alcoholic drinks are a great way to do this. After all, you’ve probably noticed that your restaurant can charge double – if not more – for a bottle of wine than a supermarket can.
Labor costs
When it comes to staff expenses, every restaurant is different. The one thing that they will have in common is that there definitely will be outgoings for labor but how much is spent on staff is unique to each business. Expenses, including those spent on casual employees, plus waiters, waitresses, chefs, and cleaners, as well as workwear, plus staff benefits, must all be accounted for. Remember, you’ll be wanting to pay yourself too, so don’t forget to add that to your list.
Premises and equipment
Unless you’re lucky enough to own your restaurant’s premises outright, then you’ll probably be looking at regular outgoings in rent or a mortgage. You’ll need to factor in the cost of equipment too as well as any maintenance costs, including any anticipated servicing.
Marketing, administration, and promotion
Every business should have a marketing budget of some kind, even if it doesn’t stretch that far. Expenses to promote your restaurant, as well as any contractors or professionals you can bring in to support the efficiency of your business, like bookkeeping experts Prix Fixe, need to be accounted for.
The key to success
In short, bookkeeping can be the difference between restaurant success and failure. It will allow you to get a better overall understanding of your profit and losses by not only allowing you to see how your business is performing now but also making it possible for you to easily compare your finances year upon year.
Now you have a better understanding of what restaurant bookkeeping is and how doing it will undoubtedly benefit your business, you’re probably asking yourself, should you outsource the job? We might be biased but put it this way, if you outsource tasks like bookkeeping, then you can spend your time more wisely on things like food-tasting, perfecting your menu, and training staff. Outsourcing your bookkeeping will allow you to invest that passion into your restaurant and focus on growing your business. Plus, as your business evolves, you’ll see changes in your bookkeeping too, so it’s always best to bring in the experts.
At Prix Fixe, we recognize that every restaurant is different, that’s why our team of experts is here and ready to discuss your specific requirements, so we can best support your bookkeeping and accounting needs. Get in touch with Prix Fixe today.