How and why is bookkeeping and financial clarity an important tool for the longevity of a restaurant business?
Using accounting software for the restaurant
There are good accounting software’s available for restaurants that keeps a track of inventory, payroll, sales and purchases records, etc. This accounting software also helps to prepare tax reports compiled with IRS guidelines while filing income tax returns of the business.
Analysis of cost of inventory and margin
The restaurants should have a regular exercise of measurement of food cost ratio, tracing of sales, and purchases of inventory etc. Along with that, beverages sales including soft drinks, cocktails, wine, etc. should be tracked routinely so that leakage (if any) can be traced immediately.
Hiring of Accountant
The owner of the restaurant business should primarily focus on business development so that growth can be ensured. At the same time, bookkeeping sometimes becomes complicated and can be a costly affair for the restaurant. In that case, hiring an accountant full-time or part-time may help the restaurant owners to free their time and focus on other core areas of business.
Periodic financial reports preparation
Periodic financial reports such as profit and loss, the balance sheet etc. should be prepared. The periodic cycle may be yearly, quarterly, monthly and in some cases weekly. Also, these reports should be presented in the form of charts and diagrams so that understanding and interpretation of these by the management could be easy.
Check on cash inflows and outflows
Ensuring an appropriate projection of cash inflows and outflows for the restaurant is an important part while bookkeeping since it is essential for financial planning and removes the contingency in case of emergency of funds arises.