5 Effective Accounting Tips To Smoothly Run Your Restaurant

Did you also start your own restaurant to follow your passion? 

Then you might have or are facing hurdles to manage your restaurant’s accounting. Don’t stress out pal because, as per a report, around 52% of restaurants face the challenge of high operation costs. 

A part of this high operating cost is your daily accounting. Restaurant accounting includes keeping a tab of the restaurant’s finances and drafting the budget accordingly. It is one of the indispensable aspects of running a restaurant.

Restaurant Accounting is different from other industries. Accurate and true finance reports are necessary for any business’s success. But for restaurants, it becomes more important as it relies on historical data and current records to forecast and make business decisions. The profit margins in the restaurants are very thin. Due to this reason, it becomes vital to pay attention to your accounting process. 

That’s why we bring you the 6  effective accounting tips to smoothly run your restaurant. 

  • Understand the language

If you wish to excel in your accounting game as strongly as in your kitchen, then you must learn the language of accounting. Everyone is not a trained accountant, that’s why you should start by understanding the basic terms. For instance, debit, credit, balance sheet, cash flow, prime cost, profit & loss, etc. In the beginning, it may feel heavy-duty. But, grasping their meaning, differences, and application in accounting will give you essential financial insights into your restaurant. However, if it feels onerous you can hire or outsource an accountant. 

  • Keep track of your Bookkeeping

Bookkeeping should be your new habit. Firstly, you can create a cash-flow projection to calculate the estimated revenue after expenses. It builds the foundation for your restaurant’s budget. Secondly, you must maintain regular financial records, for future IRS audits. You can consider buying restaurant bookkeeping software as well. Thirdly, as a restaurant owner, you must track your inventory on a weekly basis. Lastly, maintain a sound ratio of Cost of Goods Sold (COGS). It helps in setting better pricing and sales goals and making your restaurant profitable.

  • Choose the right point of sale system

You must invest in the right Point of Sale (POS) System. It will help you understand where your money is going. A POS system offers you a detailed analysis of your accounts via insightful infographics. However, many managers are unaware of the benefit of intertwined POS and accounting systems. Linking your POS system and accounting system helps you track inventory and labor costs, methods of payment, etc. There are various POS systems specifically designed to manage all facets of a restaurant. For instance, Toast POS, Lightspeed POS, ShopKeep, Square, etc. 

  • Get your restaurant insured

Understanding financial terms will definitely help you comprehend the accounting department. But, it is still exposed to financial troubles namely, property damage and lawsuits. For instance, your kitchen can catch fire and destroy the expensive equipment, or a customer slips on the restaurant’s wet floor and breaks his leg. Any of the instances could lead to financial calamity. Therefore, you must get your restaurant insured. Many small business insurances are available for restaurants such as commercial general liability and restaurant insurance. This insurance offers general liability and property damage coverages. You can consult an insurance agent to identify and secure the specific risk associated with your restaurant.

  • Consider Outsourcing your Payroll

Paying your employees always seems like child’s play. However, it includes deciding a pay period, number & type of payments, classifying employees & withholding taxes. With the host of tasks at hand to do, properly handling payroll becomes tough at times. Also in case of mistakes in payroll you have to beat liability issues and high penalty fees. Besides all of these, it’s hard to keep up with the dynamic workforce laws.  That’s why it is advisable to outsource your payroll system.

 

The restaurant industry varies from other industries in terms of profit margin. Eventually, with the success and popularity of your restaurant, accounting often gets tough. That’s why we empower you with accurate accounting and bookkeeping services. Not only this, we help you with payroll and strategic business planning while you focus on growing your restaurant. 

That’s why we bring you the 7 effective accounting tips to smoothly run your restaurant. 

 

-by Dipali  Nishad