Why is restaurant accounting necessary for your food service business? Restaurants typically run about a five to ten percent profit margin, which is not much considering the work involved. Tracking or managing your cash flow is one of the most important tasks you must perform when running a successful restaurant. Unfortunately watching your labor, food costs and just generally managing the place takes up most of your time and attention. That is why it is so important to hire an accountant or accounting firm that is experienced in working with restaurants. You don't have time to do it all and do it well so you need to delegate this to someone who knows what they are doing.
Your restaurant accountant can do more than just produce financial reports. They can be a valuable source of advice for every aspect of your business and help you to make profitable decisions. They are able to identify and prevent losses. They can help you identify trends in your cash flow, both good and bad; to help you adjust the way you do business.
Your accountant will need accurate information in order to prepare the necessary financial statements needed each month. One of the best information gathering tools is a POS system combined with accounting software. Point-of-sale terminals act as cash registers. They also transmit the orders to the kitchen; can track inventory and even monitor food and labor costs by combining time clock function. You do not want to try and install this yourself. Find a contractor who can install the system, test it thoroughly and train your staff. You will want restaurant accounting software to be able to upgrade and expand as your business does. Make sure that the software is employee friendly to make it easier for your employees to use and that your information will be accurate. Make sure that your software vendor has a training program and 24/7 tech support before you purchase it.
A point of sale system will track each and every transaction made in your establishment. Everything from what menu item or beverage was sold, when it was sold and who sold it is the type of information you can gather. You can identify the trends, strengths and weaknesses of your menu and staff. Your accountant can advise you as to what type of software to purchase so that you do not overspend for options you don't need. You also want it to be compatible to your accountant's system. Restaurant accounting software will help you keep track of the daily numbers, such as sales, labor hours, tax collected and purchases.
Your accountant can also help you with financial discipline and budgeting. When opening a new restaurant, or refurbishing an existing one, it is easy to get carried away with new purchases. Running your plans by the accountant or letting them help you make plans will help keep you from overspending and getting into a serious cash crunch right off the bat.
If you use your restaurant accountant right from the start and think of him or her as a partner then you will stand a much better chance of making a profitable restaurant.