Do you believe the quality of your menu offerings is the key to your restaurant’s success?
While adding that coveted chef to your staff may be a great idea, putting your accounting methods in order may be the more important element.
As a seasoned Seattle restaurant consultant and CPA, I’ve found that the #2 reason for most restaurant owners’ financial problems lies in how effectively they’re tracking their numbers (#1 is inadequate sales; if that isn’t in line, all other efforts will be wasted, but that is another subject for another time).
I specialize in consulting for independent restaurants that are crazy busy. I also owned my own restaurant for 17 years, so I know that you spend your days running operations and putting out fires, with little time for perfecting bookkeeping techniques. But the reality is that numbers count, and not just the ones coming in the door. The lack of an organized accounting setup can spell financial disaster for your business, in both the short-term and the long-term. When you reconcile your bank statement, if the ending balance doesn’t match up with the number on your balance sheet, you don’t have great or accurate books and could benefit from the assistance of a professional restaurant consultant.
A restaurant consultant can examine your accounting records to pick out the discrepancies. The Profit & Loss Statement and Balance Sheet may not substantiate the numbers. An evaluation of the actual posted transactions may be required. Most likely, an improperly set up accounting system, along with a poorly set up Chart of Accounts is at least partially to blame. QuickBooks Online is perfect for independent restaurant owners. You can access it from anywhere in real time. You don’t need to install updates and the data is continually being backed up by QuickBooks Online.
Another common error that can lead to problems is posting to incorrect accounts, which can skewer results and provide an inaccurate picture of what is really going on with your business. Examples might include failing to note complimentary meals or discounts when posting your daily receipts as income, inputting sales tax figures that are faulty, listing gift certificates as revenue rather than liabilities, and recording capital expenses as ordinary ones. Simply rolling employee wages and employer-paid payroll taxes together into “wages” can really gum up the works. Such mistakes are easy to make, yet not easily detected by most independent restaurant owners.
Also keep in mind that while restaurant and accounting software systems can make our lives easier, if communications between the various systems aren’t properly intertwined, it can lead to problems. Just because something is being automatically downloaded, doesn’t mean that the information is accurate or going where it should in your other systems, especially in your accounting software, which is going to create your indispensable Profit & Loss Statement and Balance Sheet.
A professional restaurant consultant, knowledgeable in this specialized area of financial accounting and systems, can help you trace through a process from start to finish to make sure things are doing what you want them to do. If your system is lacking, they can help you make it right, honing in on the problem areas and setting you up for optimum profit, organization and efficiency. A professional, especially one who’s a CPA, can help you get to the root of the financial problem areas and put your setup in order. If you’re just starting out, they can provide invaluable guidance to start things right from day one or they can provide ongoing support with your accounting system.
Whether you have yet to open your doors or have been in business for years, don’t skimp on an organized and efficient accounting system. It’s a vital ingredient in your restaurant’s long term success and shouldn’t be left off the menu.