The Top 6 Dos & Don’ts in Bookkeeping for Restaurant Owners
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Running a restaurant often means putting out fires left and right (sometimes literally), which can mean things like bookkeeping get pushed to the back burner. But when 60% of restaurants fail within the first three years, you simply can’t afford to not focus on your books. Keep reading for the top dos and don’ts of restaurant bookkeeping, so you can keep your books even cleaner than the kitchen.
Do Keep Your Records Up to Date
Bookkeeping can be tedious, but it can quickly pile up and overwhelm you if you don’t stay on top of it. Carving out some time every day to devote to bookkeeping will ensure your records are kept up to date while giving you an accurate picture of your business.
Don’t Try to Do It All Yourself
As a restaurant owner, you’re responsible for the success of your business. But that means accepting help when you need it. An accountant that understands your business and wants to succeed with you can mean the difference between a thriving restaurant and a business going belly up. Partner with an experienced restaurant accounting firm like Arvind Betala to give your restaurant a leg up in the industry.
Do Run Daily Reports
Running a restaurant is stressful enough without having an accurate understanding of what’s going on with your finances. Running daily key reports will help you have the information you need at your fingertips to make key operation decisions and stay profitable. These key reports can include:
Don’t Forget the Tip Log
Tips are easy to overlook, but doing so could cost you come tax time. Because tips are considered earned income for staff, you and your employees will need to report tips on income taxes and pay taxes on them. A tip log helps the restaurant and staff track tips given to servers, bartenders, bussers and all other staff throughout a shift. All types of tips need to be recorded in this log, including cash left on tables and credit card tips. By keeping the tip log accurate and up to date, you’ll thank yourself come tax season.
Do Track Prime Costs
As a restaurant owner, you know all about the cost of doing business. But are you tracking your prime costs? Fixed costs are expenses that you can’t really change or control (rent, equipment leases, permits, etc.), but prime costs are the main expenses of a restaurant, like food and beverage costs, wages, benefits, and more.
Tracking your prime costs will tell you how well your restaurant is doing; if you’re profitable, prime costs should stay within 60-65% of your sales. Tracking this on a weekly basis will help you better understand where to cut expenses and how much your sales need to be to make a profit.
Don’t Try to Handle Payroll
Paying employees their wages seems straightforward enough, but payroll is anything but. Outsourcing your payroll is strongly recommended for business owners; not only does it save you a significant amount of time (and headaches), but it’s also safer. After all, if you make mistakes with payroll, you can end up with costly fines and penalties, not to mention upset from your employees.
Serving Up Your Key Takeaways
Running a restaurant is hard, but it’s even harder without good bookkeeping habits. A professional accounting firm can help you keep your books on the straight and narrow and make tax season a breeze, so that you can focus on what matters: showing your guests a great time with delicious eats.
- Daily sales report
- Profit & loss statement
- Cash flow statement
- Chart of accounts
- Balance sheet
Don’t Forget the Tip Log
Tips are easy to overlook, but doing so could cost you come tax time. Because tips are considered earned income for staff, you and your employees will need to report tips on income taxes and pay taxes on them. A tip log helps the restaurant and staff track tips given to servers, bartenders, bussers and all other staff throughout a shift. All types of tips need to be recorded in this log, including cash left on tables and credit card tips. By keeping the tip log accurate and up to date, you’ll thank yourself come tax season.
Do Track Prime Costs
As a restaurant owner, you know all about the cost of doing business. But are you tracking your prime costs? Fixed costs are expenses that you can’t really change or control (rent, equipment leases, permits, etc.), but prime costs are the main expenses of a restaurant, like food and beverage costs, wages, benefits, and more.
Tracking your prime costs will tell you how well your restaurant is doing; if you’re profitable, prime costs should stay within 60-65% of your sales. Tracking this on a weekly basis will help you better understand where to cut expenses and how much your sales need to be to make a profit.
Don’t Try to Handle Payroll
Paying employees their wages seems straightforward enough, but payroll is anything but. Outsourcing your payroll is strongly recommended for business owners; not only does it save you a significant amount of time (and headaches), but it’s also safer. After all, if you make mistakes with payroll, you can end up with costly fines and penalties, not to mention upset from your employees.
Serving Up Your Key Takeaways
Running a restaurant is hard, but it’s even harder without good bookkeeping habits. A professional accounting firm can help you keep your books on the straight and narrow and make tax season a breeze, so that you can focus on what matters: showing your guests a great time with delicious eats.