HomeManagement7 Much Needed Tips On Restaurant Accounting

7 Much Needed Tips On Restaurant Accounting

Profit margins in restaurants are slim. Menu prices cannot be altered often in order to remain competitive. At the end of the day, it really comes down to cutting costs and optimizing your resources to their best. Restaurant Accounting helps you achieve that.

But before we dive any deeper…

What Is Restaurant Accounting?

Restaurant accounting is a process of recording, analyzing and interpreting financial data for a restaurant.

It is essential in order to control restaurant costs, keep track of operational finances, ensuring that you remain competitive and grow as per your set goals.

Restaurant accounting can come across as a very simple, surface-level job but it goes much beyond that. Without proper accounting, you cannot take any important future decisions regarding investing, marketing and growing your restaurant business.

Restaurant bookkeeping VS Restaurant Accounting

Bookkeeping is just recording data entries in a general ledger while restaurant accounting is a more detailed analysis of the operation.

It includes tracking your restaurant’s finances and adjusting the budget to ensure that your restaurant business remains competitive and profitable. The business strategy of your restaurant also depends on restaurant accounting.

Tips For Better Restaurant Accounting

1. Investing In Proper Accounting Software

Thousands of data entries can make a number of enthusiasts also feel overwhelmed. But thanks to accounting software and its easy user interface we can say goodbye to tedious and manual work.

Proper accounting software can ease your process with its invoicing, expense and income tracking, and basic reporting features.

However, as a restaurant, your needs can be different than a corporate business. You should ideally purchase a POS system that provides you with proper accounting integration that gives you plenty of options to customize your ledgers. With proper integrations, you can directly import your sales, expense, and purchase data and carry on with calculations.

2. Hire An Accountant

They say if something is not your expertise then let the expert handle it.

You can take 3 hours to do an accounting task while an accountant can do it in an hour. Even if you can do thorough accounting, a professional accountant can help you set up proper processes, interpret the information and address any financial issue.

You may think hiring an accountant is an additional cost but it will pay off in the longer run. It doesn’t matter whether you’re starting out or already existing in the industry, hiring an accountant is a great way to ensure that your business is profitable and that you’re complying with all central, state, and local tax and payroll laws.

3. Data Reconciliation

In today’s time, restaurants receive orders from multiple channels and third-party tie-ups. These orders come in a flow creating chaos in data entries henceforth creating a disaster for your restaurant accounting. 

Therefore, modern POS with smart technology comes with the feature of Online Order Reconciliation. This helps you to reconcile data automatically against the order received vs the payout, giving you the actual picture of commission charges and other costs. This accurate data will help you justify your presence on those platforms and make future decisions.

what is restaurant accounting and restaurant bookkeeping

4. Keep Close Eyes On Food Costs

There are two types of costs in a restaurant:

  1. Fixed cost
  2. Variable cost

Fixed costs are sorted and more simple to understand as there are no constant fluctuations in them. However, variable cost like rent of property, electricity bill, employee payroll etc. is tricky and has many fluctuations to them.

One of the most important and tricky variable costs is Food cost. Due to constantly varying sales figures, changes in suppliers, weather changes, fluctuation in raw material prices etc controlling food costs has become extremely challenging.

Therefore, analyzing past sales records and seasonal changes can help you forecast your sales better which can in a way help you order raw materials accordingly, control food costs and reduce food wastage in your restaurant as well.

Readily chopped vegetables stored & sold in those little plastic boxes are actually far more expensive than fresh and raw vegetables. To save money, buy veggies and fruits from the market and cut them afterwards according to your needs. This will take some time, but it will undoubtedly help you control your costs.

5. Track Total Sales

Credit cards account for the vast majority of restaurant sales.

RECOMMENDED READ  How To Make Your Restaurant A Great Place To Work?

The majority of credit card terminals suggest that you close out that daily batch of transactions so that the credit card company can begin the process of transferring the funds.

Some restaurants will wait until the end of the week to record one “lump sum” but that doesn’t offer you a true picture of your daily sales.

Daily sales are significant since they have an impact on the inventory and payroll of the company. Make sure to keep track of all sales and all revenue.

Also, you should note the best month/day/hour/location for your restaurant sales.

6. Check Reports From Time-To-Time

Reports reflect your restaurant’s growth in any given period of time.

Therefore, keeping tabs on your reports from time to time is a good practice to remain in sync with your restaurant’s goals and sustainability.

Sometimes we may lose the track of our growth by focusing too much on day-to-day nitty gritty but reports can give us the real picture and the direction of growth we are headed.

There are certain reports required to keep tabs on the financial health of your business. These reports help you:

  • Track business transactions
  • Forecast futures sales
  • Create and maintain budgets
  • Monitor changing costs over time
  • Assess your financial situation compared to the prior period

7. Pay Your Taxes On Time

The Government of India passes new laws and regulations related to the restaurant & hospitality industry which affects our ongoing and future transactions.

Changes in GST, VAT, Service tax and Service need to be implemented in order to stay in business. Understanding the implications of these laws and applying them in real can be a challenge for restaurants if they don’t have an accountant.

Accountants are not just experts in these matters they will also give you a heads up in advance, understand the implications, help you apply the changes hassle-free and pay your dues on time. Taxation can be very tricky for a restaurant business. There are a lot of rules to abide by and penalties for any kind of violation.

Therefore, proper accounting software and an expert accountant can really make your taxation easy and save you from any legal issues.

Reports You Need To Track For Better Restaurant Accounting

  1. Employee payroll
  2. Accounts payable
  3. Inventory cost
  4. Cash flow
  5. Total sales
  6. Food cost or COGS
  7. Quarterly gross profit
  8. EBITDA 
  9. Purchase orders
  10. Profit and loss statement
how to do proper restaurant accounting

POS Features For Smart Restaurant Accounting

1. Accounting Integrations

While buying POS software for your restaurant look for a system that provides you with more than just billing, inventory and reporting features. 

Look for a POS system that also provides integrations with the industry’s best accounting software like Tally or SAP. With such integrations, the process of your restaurant accounting becomes butter smooth while saving you a lot of time, staff labour and energy.

2. Detailed Reports

A good POS system with real-time tracking of your cost, inventory and sales can be a game changer for your business growth. You can avail yourself of any minutest detail through various reports of each operational activity. 

Petpooja not only provides important reports on sales, inventory and cash flow but provides 80+ reports of each restaurant’s operational activity so that you can always make an informed decision.

3. Easy Analysis

In today’s time, restaurants receive orders from multiple channels and third-party tie-ups. They also incur a lot of other costs to sustain their restaurant’s growth. 

This is why it becomes increasingly important to measure those costs, track data and analyze it. Without proper analysis, you cannot interpret data accurately. Using a smart POS system you can gather your restaurant data and easily analyze it according to your needs. 

Petpooja dynamic reports is a customizable dashboard that you can use to visualize your restaurant’s data for easy understanding and make insightful reports, appropriate to your business needs instead of scrolling through excel spreadsheets and pdfs. 

how to analyze restaurant data analytics

Hope this blog helps you ace your restaurant accounting practises.

Don’t forget to follow us on Instagram for more restaurant industry-related updates.

Fatema Rasiwala
Fatema Rasiwala
Content writer at Petpooja

RELATED UPDATES

Leave a Reply