For every restaurant owner, there is certain information and reports, as well as basic accounting indicators that are important for restaurants and cafes to monitor. Here are some key ones:
- Profit and Loss (P&L) Statement: This report shows the revenue earned by the restaurant and the expenses incurred in generating that revenue. It helps to identify areas where the restaurant can cut costs or increase revenue to improve profitability.
- Inventory Report: This report shows the restaurant’s inventory levels and the cost of goods sold (COGS). It helps to identify which items are selling well and which ones are not, which can inform menu changes and purchasing decisions.
- Sales Report: This report shows the restaurant’s sales performance over a given period. It can be broken down by product, category, or time of day to help identify sales trends and inform pricing decisions.
- Labor Cost Report: This report shows the restaurant’s labor costs, including salaries, benefits, and overtime pay. It helps to identify areas where labor costs can be reduced or optimized.
- Cash Flow Statement: This report shows the cash inflows and outflows of the restaurant over a given period. It helps to identify how much cash is available for expenses and investments and can inform decisions about financing and expansion.
In addition to these reports, there are some basic accounting indicators that are important for restaurants and cafes to monitor, such as the break-even point, the return on investment (ROI), and the customer lifetime value (CLV).
By monitoring these reports and indicators and using sophisticated accounting and point-of-sale systems, restaurant owners can make informed decisions to improve profitability and promote business growth.
Why is it important to Hire an Experienced Restaurant Accountant?
Hiring an experienced restaurant accountant is crucial for several reasons:
- Expertise in Restaurant Accounting: A restaurant accountant with experience in the industry will have a deep understanding of the unique accounting and financial challenges that restaurants face. They will know how to navigate issues such as food and labor costs, inventory management, cash flow, and tax compliance.
- Maximize Profitability: An experienced restaurant accountant can help you maximize profitability by identifying areas where costs can be reduced, revenue can be increased, and operations can be optimized. They can provide valuable insights into financial trends and help you make informed decisions about investments, pricing, and menu offerings.
- Reduce Risk of Errors: Restaurant accounting can be complex, and errors can be costly. An experienced accountant will have the expertise to ensure that your books are accurate and up-to-date, reducing the risk of costly mistakes.
- Regulatory Compliance: The restaurant industry is subject to various regulations and tax laws, and an experienced accountant can help you stay compliant with these requirements. They can ensure that you are collecting and remitting taxes correctly, filing the appropriate paperwork on time, and adhering to other regulatory requirements.
- Time-Saving: Restaurant owners and managers have a lot on their plate, and managing accounting and financial matters can be time-consuming. Hiring an experienced restaurant accountant can free up your time to focus on other areas of your business, such as customer service, menu development, and marketing.
Hiring an experienced restaurant accountant can provide significant benefits for your business, including expertise in restaurant accounting, maximizing profitability, reducing the risk of errors, regulatory compliance, and time-saving.
Daily Sales Report
The daily sales report is a crucial tool for restaurant owners and managers to track the performance of their business. Here are some additional points to consider when reviewing your daily sales report:
- Top-Selling and Least-Selling Items: This information can help you make informed decisions about menu offerings and promotions. You can identify which items are popular with customers and which ones are not, and adjust your menu accordingly.
- Average Total Invoice Value: This metric can help you track your average revenue per customer and identify opportunities to increase sales. You can analyze whether certain types of meals or menu items have a higher average invoice value and adjust your offerings accordingly.
- Number of Daily Visitors: This metric can help you identify patterns in customer traffic and adjust staffing levels accordingly. You can also use this information to plan marketing campaigns and promotions for slower days or times.
- Average Revenue per Visitor: This metric can help you track your overall performance and identify areas where you can improve. You can analyze whether certain times of day or days of the week have higher average revenue per visitor and adjust your operations accordingly.
- Average Income per Table or Section: This metric can help you identify which areas of your restaurant are performing well and which ones are not. You can analyze whether certain sections have higher average income per table and adjust your staffing levels and operations accordingly.
By tracking and analyzing these metrics on a daily basis, you can make informed decisions about your restaurant operations, menu offerings, marketing campaigns, and staffing levels, ultimately leading to increased profitability and customer satisfaction.
Prime and Controllable Costs
In restaurant accounting, prime costs and controllable costs are two important types of costs that need to be managed effectively to ensure profitability.
- Prime Costs: Prime costs are the direct costs of producing the goods or services that a restaurant sells, such as food and beverage costs, labor costs, and related expenses such as payroll taxes and benefits. Prime costs typically make up the largest percentage of a restaurant’s expenses and are considered the most important costs to manage effectively. By controlling prime costs, restaurants can improve their profit margins and overall financial performance.
- Controllable Costs: Controllable costs are the expenses that a restaurant can control or influence through effective management, such as rent, utilities, advertising and marketing, and supplies. These costs are generally fixed or semi-fixed and can be adjusted by the restaurant owner or manager. By controlling controllable costs, restaurants can reduce their overall expenses and improve their profitability.
The ideal ratio for this indicator (prime cost/sales) is between 55% and 60%.
To effectively manage prime costs and controllable costs, restaurant owners and managers should regularly review and analyze their financial statements, such as their profit and loss statement, balance sheet, and cash flow statement. They should also track key performance indicators (KPIs) such as food and beverage cost percentage, labor cost percentage, and sales per labor hour, and use this information to make informed decisions about pricing, menu offerings, staffing levels, and other operational areas.
In summary, prime costs and controllable costs are two important types of costs that need to be managed effectively to ensure profitability in the restaurant industry. By controlling these costs and using financial and operational data to make informed decisions, restaurant owners and managers can improve their financial performance and position themselves for long-term success.