When you’re analyzing the financial health of your restaurant business, note that no single number tells the whole financial story. For example, a higher volume restaurant will usually have a higher prime cost than a smaller restaurant. When selecting an accounting restaurant bookkeeping firm, you’ll consider many factors—technical expertise, industry know-how, reputation, fees. Your ideal service team understands restaurant companies and the issues that affect you, including point-of-sale, leases, and food and beverage inventory controls.
If you’re working with a firm, you can control accounting costs by ensuring that junior accountants handle the menial tasks, and your CPA completes the hard analysis. Restaurant accountants understand how to compile data accurately and meaningfully. They are trained to analyze your financials to identify operational shortcomings, cost leaks, and trends that require immediate or long-term action. We know this is a lot to track, but once you make it a habit or have someone in charge of your restaurant accounting system, it will be like cooking your favorite recipe. If you’re hiring an accountant for your restaurant, you might not need to know these in-depth, but it will help you understand what they’re talking about and your overall financial situation.
Restaurant accounting: The analytical step forward
You and your accountant will work on certain bookkeeping and accounting tasks together. You’ll also want to know enough about accounting to monitor financial KPIs that will help you make business decisions on the fly. Accounting mistakes happen just like overcooking a steak or delivering the wrong order.
- It is therefore imperative to your success that you strive for precise inventory counts at all times.
- Like any other industry, the hospitality field must adhere to financial regulations.
- For efficient restaurant accounting, you need to understand the ins and outs of the food and beverage industry.
- CoGS does not include one-time, non-inventory-related costs, such as refrigerator repairs or the purchase of a new oven.
- At a more granular level, accounting involves summarizing,analyzing, and reporting transactions to oversight agencies, regulators, andtax collection entities.
Managing payroll and understanding labor costs compared to sales are essential aspects of effective restaurant accounting. You can create a daily sales report and use key performance indicators to improve your operations. Want to create a balance sheet to better manage your assets and liabilities? Like businesses in all industries, restaurants produce balance sheets, income statements, and cash flow statements to communicate their financial position. Each of the key players highlighted above are important to your restaurant’s financial success. None should be overlooks to ensure your restaurant financial records are accurate.
Finding the Right Accounting Partner for Your Business
Or track your monthly income and expenses accurately and efficiently with Lark’s Small Business Budget Template. Input your projected and actual income to give yourself a clear overview of your financial situation and make informed budget decisions. Large restaurants with greater revenue benefit more from having an in-house accountant.
- Periodically conduct inventory counts of paper goods, and adjust your accounting records accordingly to ensure they match the actual on-hand inventory.
- So, if a business orders repairs in a given month, that liability is noted immediately in that month, even if it’s paid thirty days later.
- How can the restaurant business avoid data silos and generate accurate data?
- Unlike many other national firms, we don’t focus on only the largest clients.
- Every restaurant owner should know how much inventory they have on hand at any given time.
- Accounting software helps you and your accountant stay on the same page.
- Each and every transaction in your restaurant results in a change to the balance of at least two accounts.
The responsibility falls onto the owner or manager, although this isn’t their area of expertise. It’s more effective for smaller businesses to hire an experienced outsourced accountant when needed instead of a full-time in-house accountant. Deciding between in-house and outsourced accounting services depends on your restaurant’s specific operational needs, financial complexity, and strategic goals. Accurate bookkeeping is the first step, as accounting analyses and reports won’t be reliable without it. As such, restaurant owners often start with bookkeeping before moving on to more complex accounting tasks to strategically manage their finances as their business grows. Restaurants deal with perishable goods, making effective inventory management essential.