Many dream about opening a restaurant as a business. However, only a few succeeds in the business. Have you ever thought about the reason? Yes, there could be a lack of experience; however, the major reason is the lack of knowledge about restaurant accounting management. Many online accounting services can help you understand the basics of accounting. Here are some restaurant accounting tips which may come handy if you ever plan to open one.
Restaurant Accounting Tips
- Understand The Language
You might not be a commerce graduate, but if you are into the restaurant business, it is always appreciated to understand the basic languages used in accounting. Common words used are debit, credit, profit and loss account, balance sheet, capital, income and expenditure statement, cash flow statement, budgeting, forecasting, etc. If you are an entrepreneur, you need to be familiar with such words so that they won’t affect your business performance. It is not necessary to be an accountant to understand the accounting language; however, understanding the basics will help you communicate better with your accountant and auditor.
- Accuracy Matters
Accounting is one such subject where you cannot hide even a single penny. If you hide it today, it will show up on the statements in the coming days. Sometimes you might write off some amount; however, remember that in accounting, every penny counts. Even though the written-off figure is small, it can affect the data analytics, expense accounts, taxes, and even your revenue. Ensure to understand where you have to spend money, even if it is a penny.
Practice Makes Perfect
- Practice Bookkeeping
Make it a practice to keep account of your daily sales and restaurant expenses. When you perform this practice daily, you will understand the basic operations in the restaurant. Soon you will understand the pattern such as what days you can expect more business when it will be low, what dishes people like, what dishes are getting sold out quickly, the dishes that remain unsold, etc. When you understand such patterns, it will be much easier for your to strategize the restaurant rules and functioning, and once implemented, you will see the results too.
- Know Your Expenses
Once you start practicing bookkeeping, you will understand the different types of expenditure- fixed and variable. Fixed expenses, like the name, suggest as the expenses that remain the same, for example, depreciation on plant and machinery, rent, salary, etc. Variable expenses are those that keep on fluctuating, such as water bills, electricity bills, etc. If you are unsure about these expenses, get the help of your virtual accounting services. The knowledge about these expenses can make it quite easier for you to control them in the future.
- Make A Profit And Loss Statement
P & L statement shows you the breakdown of the costs and revenue for a particular period, and it helps you understand the income and expenditure of your restaurant. In the P&L account, you can find all the expense and income information such as sales, bills, labor cost, etc. A P&L account is created once a year; however, to keep track of the business, you can create one monthly to get a good insight into the business.
- Select A POS System
It does not matter if you have a small restaurant or a big one; you will always need a point of sale system for managing cash, sending receipts through emails and texts, order management, back-office reporting, and inventory management.
- Use An Accounting Software
One of the best ways to manage your restaurant accounting is to use good accounting software. It should create the invoices, data entry tasks, track your revenue, prepare the P&L account and cash flow statements without any errors.
- Ask Around
There is no shame in asking other restauranters about how they manage their books of accounts. When you interact with other restauranters, you will get an idea about how you need to maintain your books of accounts.
Once you follow these tips, you will find that restaurant accounting is not as difficult as it may sound. It is always good to have a basic accounting understanding of whatever business you do, as it can help you run the business more efficiently. Continue Reading