When it comes to restaurant accounting, you want to have someone on your side who…
As a restaurant owner or manager, you know that running a successful establishment requires much more than curating exquisite meals and providing impeccable service. It also demands a firm grip on your financials, ensuring that your books are meticulously maintained and accurate. In this comprehensive guide, the restaurant bookkeeping accountants from C.E. Thorn, CPA, PLLC will walk you through the fundamental principles of restaurant bookkeeping, offering you an easy-to-follow roadmap to keep your financial records in order.
4 Crucial Steps for Restaurant Bookkeeping
Restaurant bookkeeping involves several crucial steps to ensure accurate financial records and facilitate informed decision-making. Let's explore four key steps that are essential for effective restaurant bookkeeping.
As you already know, recording sales involves tracking and documenting all revenue generated by your establishment on a daily basis. This includes sales from food, beverages, merchandise, catering services, and any other sources of income.
Set up Accounts Payable
Managing your accounts payable is crucial for maintaining healthy relationships with suppliers, vendors, and service providers. In order to accurately track your finances, it's best to set up a business bank account if you haven't already. This will make it easier to distinguish and separate your business transactions from personal ones. This step involves accurately tracking and recording your business's unpaid bills, invoices, and other financial obligations.
Reconciling accounts involves comparing your business bank statements, credit card statements, and other financial accounts against your own records. By comparing the transactions on your books with those on your bank statements, you can identify any missing or mismatched entries, errors, or fraudulent activities.
Analyze Financial Reports
Financial reports such as profit and loss statements, balance sheets, and cash flow statements offer a comprehensive view of your revenues, expenses, assets, liabilities, and cash flow. By reviewing these financial reports regularly, you can assess your profitability, identify areas for cost control or improvement, track key performance indicators, and make informed decisions about pricing, staffing, and even decide if you should take out a loan to finance your equipment. When you have up-to-date financial reports on hand, you can make well-informed decisions that best suit your business.
The Best Way to Record Restaurant Sales
Recording restaurant sales accurately is essential for maintaining transparent financial records and tracking your business's performance. Adhering to a budget is much easier when you can easily access financial statements. In addition, it will help guide you to identify sound forecasts for future purchases and costs.
Keep Up With Sales Daily
Develop a habit of diligently tracking and documenting sales transactions as they occur. This can be done manually by using a sales journal or logbook, or electronically through a point-of-sale (POS) system.
Maintain a Spreadsheet With Daily Sales
You can use popular spreadsheet software like Microsoft Excel or Google Sheets for this purpose. This method provides a centralized and organized record of sales, allowing you to calculate daily, weekly, and monthly totals easily.
How to Reconcile Your Accounts
Reconciling your accounts is an important step in ensuring the accuracy and integrity of your financial records. It involves comparing your internal records, such as your general ledger or bank statements, with external sources, such as bank statements or credit card statements, to identify and resolve any discrepancies.
Here are two common approaches to reconciling accounts:
- Use a Spreadsheet: If you prefer to keep track of your accounts yourself, we recommend you keep a spreadsheet up to date with your daily financial information. This way, you can ensure that your account balances are correct at all times.
- Work with a restaurant CPA: Since keeping track of your financials is a time-consuming task, and one that can easily fall through the cracks as you juggle various other tasks, it may be in your best interest to work with a CPA. Working with a CPA allows you to take a more hands-off approach to accounting, but you’ll have access to your financials at any given time. Plus, you can relax knowing that your accounts are updated regularly and accurately.
How to Generate Financial Reports
Generating financial reports for your restaurant is essential for understanding your business's financial health, identifying trends, and making informed decisions. A CPA for restaurant bookkeeping and accounting can provide assistance in generating financial reports, there are also key ratios you can calculate on your own.
Work with a CPA
Working with a CPA to generate financial reports for your restaurant offers the advantage of professional experience and knowledge and ensures accurate and comprehensive reporting.
Here's how a restaurant and hospitality CPA can help:
- Gathering financial data
- The preparation of financial statements
- The analysis and interpretation of financial records
- Ensuring you are tax compliant
Calculate Key Ratios on Your Own
While working with a CPA is recommended for comprehensive financial reporting in the restaurant industry, you can also evaluate your restaurant's financial health by calculating key ratios yourself if you're in a pinch.
Some important ratios to consider include:
- Sales vs. Cost of Goods Sold (COGS) Ratio
- Labor Ratios
- Gross Profit Margin
How to Handle Accounts Payable
Here are the important aspects of handling accounts payable efficiently:
- Organize and track invoices
- Review and verify invoices
- Establish a clear payment schedule
- Maintain clear communication with vendors
- Leverage technology and automation by using accounting software solutions
- Periodically reconcile your accounts payable ledger
- Take advantage of discounts offered by vendors
Should I Outsource Restaurant Bookkeeping?
Here are some considerations to help you make the best decision about outsourcing restaurant bookkeeping and small business accounting solutions to a CPA. A CPA can offer the following benefits:
- Their experience and knowledge of accounting principles and tax regulations guide financial reports.
- A CPA is cost-effective when compared to hiring an in-house bookkeeper.
- You will have more flexibility to make high-level decisions as your restaurant grows.
- Working with a CPA allows you to focus on core competencies related to your daily business.
- A CPA has access to technology and reporting that offers real-time insights, customizable reports, and analysis.
- A CPA can offer increased confidentiality and security
Outsource Your Restaurant Bookkeeping to C.E. Thorn, CPA, PLLC
Outsource your restaurant bookkeeping to C.E. Thorn, CPA, PLLC, and experience the benefits of professional experience and streamlined financial management.
Our team of experienced restaurant CPAs specializes in restaurant accounting by providing accurate and reliable bookkeeping services tailored to your business’s unique needs. Say goodbye to the complexities of bookkeeping, and let us handle your financial records with precision and efficiency.
To get started today, contact us by calling 919-420-0092 or filling out the contact form below to get started.
Feel free to call our office or to complete the contact form below:
"*" indicates required fields