Restaurants are managing extremely tight profit margins with food orders, employees, utilities, rent/mortgage payments, etc. Staying on top of bookkeeping ensures that you can head off issues and stay on top of your bottom line. Getting behind on your bookkeeping can cost your business time and money or even ruin it entirely.
How to Succeed
Up-to-date and accurate bookkeeping means you always have access to the data for the best decision making. Here are ways to make sure your restaurant is always winning:
Sales Revenue
QuickBooks Online enables you to record your sales and provides real time sales reports. For accurate data do the following:
- Enter cash and credit card sales deposits how they hit your bank daily/weekly. Bank batches settled should be matched to revenue entered into QuickBooks Online or entered as revenue from the deposit.
- Run a sales report regularly. QuickBooks Online allows customizing this report to match your needs.
- Using your sales report data to help you manage cash flow in conjunction with your cash flow reports.
- Restaurant POS data integrations with QuickBooks Online to help post revenue daily/weekly. Many POS systems integrate with QuickBooks Online and will post your daily sales entry.
Cash Flow Reporting
Every business needs to monitor cash flow reports to perform forecasting and budgeting tasks successfully. Without this, you miss essential decision making that can effect your businesses future success.
In the restaurant business, there are numerous variables when that determine costs. Restaurants use the following figures to go from barely making it to much higher profit margins. Ways to look at your expenses versus revenue/sales include:
- Your Cost of goods sold is the ingredients and supplies you purchase to make the dishes you serve and any beverages you offer in your restaurant. Alcoholic beverages normally provide a higher rate of return, so consider adding these to your menu to greatly increase your profit margins. The goal is to keep Cost of Goods Sold at no more than 33% of your total revenue/sales.
- Your cost of labor is how much you pay employees. This total includes the hourly rate you pay an employee, the employer portion of taxes, unemployment taxes, uniform costs, and employee benefits such as health insurance, PTO, 401(k) matches, etc.
- The costs of venue and furniture/equipment encompasses expenses such as your rent or mortgage, utilities, ovens, refrigerators, insurance, and indoor/outdoor signage.
- Marketing expenses are another area that must be factored into your cash flow. This includes advertisements or billboards, and of course, social media.
- Your prime cost rate management is the process of keeping the cost of food and beverage, plus the labor at only 60-65% of your total revenue/sales.
Monthly Reconciliations
Reconciling all of your account transactions monthly is the only way to avoid year-end nightmares as well as ensure your management reporting is accurate and timely. Restaurant owners find that this is a huge money-saving task. If you are behind on reconciliations, contact a bookkeeping firm such as EVA Business Solutions to help you get caught up and stay up-to-date going forward.
Payroll
This is potentially the most important aspect of business management. Payroll laws constantly change, so it is wise to outsource your payroll. Fees and interest are a costly consequence of missed or incorrect payroll tax payments. The IRS severely penalizes for missed, late, or wrong payments made concerning payroll such as federal taxes. The best way to minimize this risk is by using a payroll company who handles processing payroll for you. EVA Business Solutions can help you in this regard.
Staying on top of your revenue, costs, reconciliations, payroll and management reporting can ensure a successful business.