It’s around midnight and you say goodbye to the last of your staff as they leave for the night. It has been a busy day and your restaurant was packed, not a table was empty all night. You’re tired after a long day’s work, but you want to go back to the office to see how much money you brought in today. “A few more nights like this and I can retire” you chuckle to yourself as you sit down at your desk. You log in to your computer and then reality hits you…that profit that you so confidently thought you had made isn’t there. The only thing staring back at you is a huge, crushing loss…
Restaurants aren’t like every other business. They face their own set of unique problems, not only in the kitchen or behind the bar, but also with accounting. Some mistakes can cost restaurant owners thousands of dollars in profits and countless hours of needless work. The most common problems to tackle in restaurant accounting include:
Restaurants are producers of meals and each meal needs to be able to contribute to your bottom line. Thin margin lines and unpredictable, fluctuating supplier prices make it so that you need to frequently track your costs to price menus accordingly. If you don’t, you could find yourself selling your meals at a loss and, before you know it, closing your doors for good.
The single biggest cost in the restaurant industry is food and beverage cost. Not properly tracking inventory can result in theft, food spoilage, and overserving, all of which can costs you thousands of dollars. Food cost is the most controllable expense and tracking inventory will allow you to reduce costs and make informed decisions.
Most business owners review their financial results on a monthly basis. In a fast-paced environment, can you afford to wait until the following month to correct a problem that is affecting your business today? You need access to vital information about your restaurant on a daily, not monthly, basis. Correcting problems quickly can mean the difference between a stocked cash register and worrying if the lights will stay on through the night.
Your point of sale (POS) system needs to communicate information directly to your accounting software. If the two systems are separate, then you will need to manually input the information from your POS system into your accounting system. This not only wastes precious hours of your time but can also lead to clerical errors or fraudulent activity.
Key performance indicators (KPIs) are the benchmarks that show you how well your business is performing against industry standards and/or historical data. These indicators track everything from the cost of your products to the amount you generate in sales. Tracking KPIs can alert you to potential issues and allow you correct them quickly. If you ignore them it can lead to devastating problems.
Although restaurants face unique challenges, Rainey Accounting can provide you with the solutions to your problems. Rainey Accounting can handle all aspects of your business. Don’t spend countless hours trying to manage your restaurant and your back office.
Your time is limited and every hour you spend on accounting is another hour you could’ve made a new relationship with a customer, lead your staff, or spent time with your family. Let Rainey Accounting handle all your accounting needs so that you can focus on what you do best; running your business.