One thing’s for sure: you’re getting into the restaurant business because you love it. For many people just like you, opening a restaurant the ultimate dream — combining a love of food, hospitality, people and entrepreneurship. It will be a lot of work but it will be worth it.
But while passion is the glue that will hold it all together, we’ve already mentioned the most important ingredient: hard work. It’s not just about choosing great staff or even about coming up with a great restaurant business plan (though of course, both help) — opening a restaurant also requires fantastic accounting.
So hang up that apron for a moment and pick up that calculator — it’s time to consider something just as important as hiring waiting staff and finalising the dessert menu. How will you do your restaurant accounting? The restaurant business is notoriously unpredictable, start-up and running costs are steep, profit margins are hard to push out, and there are never enough hours in the day.
So as a new restaurateur, it sounds like you need some killer accounting tips. Here are 5 to get you started:
1. Fill Your Tool Chest
As a new restaurant owner, it’s a pretty daunting prospect to sit down at the desk with a pen and a calculator to ‘do the accounting’ for the first time. Many will gulp so hard they simply swallow the hefty cost of hiring an accountant or bookkeeper.
But the other way to arm yourself is with a great arsenal of accounting tools — and these days that means starting with a computer. Then, soar into ‘the cloud’ with the latest and greatest accounting software and services, some of which are designed especially for the ins and outs of food service accounting.
The most modern restaurant-specific accounting tools will do a wonderful world of things including itemising food inventory, tracking your sales and much more — even plugging directly into your similarly important point-of-sale system.
2. Learn The Lingo
Most restaurant owners get into this exciting industry because they love food and hospitality — not because they’re accounting wizards. But even if this sounds like you, and even if you’re passing the accounting buck to someone else, it’s still important to know your way out of an accounting paper bag!
So if words like revenue, balance sheet, profit & loss and liabilities sound like gibberish to you — it’s time to add some basic knowledge to your restaurant business war chest. Get studying!
3. Consider Outsourcing
Something you’ll notice pretty quickly on your restaurant journey is that sleep is a rare commodity. There’s so much you’ll want to do yourself, and for good reason: it’s your dream.
But there’s plenty about the restaurant business that you never dreamed about — and that’s reason enough to consider looking elsewhere for help. However, it’s not just time you’ll save by outsourcing parts of your daily grind. Outsourcing bookkeeping tasks, such as payroll, can actually be more cost-effective, as you swallow a small cost and then offset it with the saved time and stress of doing a job you hate.
Not just that, staying on top of payroll and other tax issues is crucial for reasons of compliance and liability. A little mistake that took a big chunk out of your day to make can actually cost big in terms of losses or penalties, and leave you regretting your decision to not swallow a comparatively small outsourcing expense.
4. Keep Great Records
However, if you’re pretty handy with numbers, you might consider going it alone and making do without an actual bookkeeper or accountant. As we suggested earlier, today’s modern restaurant accounting tools are hugely helpful — but it still pays to know just how important keeping awesome records really is.
Your records are there so you know exactly what’s going on financially in what is actually a very complex small business. Tasks like tallying up register totals need to be done every single day, and records of sales revenue is ideally done at the end of a meal shift.
And there are other benefits of keeping great and regular records, too — like tracking which dishes are doing well and what expenses are eating up your costs and could be trimmed.
5. Be Curious
We may have arrived at our final restaurant accounting tip for this article — but in truth the list is even longer than a chef’s arm. That’s why, for Tip Number 5, we strongly encourage every new restaurant owner to immediately adopt an attitude of endless curiosity.
Just like if your third and final wish from the Genie’s Lamp would be for 1,000 more wishes, asking other restaurateurs for gems of accounting advice is nothing short of golden. Avoiding a mistake like buying the wrong (but super-expensive) point-of-sale system could mean the difference between success and failure in that make-or-break early period of trading.
And there are plenty of other things only experience will teach you, too — like the best billing arrangements to have with vendors, what data is most crucial to generate on your regular reports, how to tweak your accounting and save thousands on things like food wastage, and much, much more.
It may seem like there’s a mountain of jargon and job-lists to get your head around, but don’t despair — your restaurant journey is right there, stretched out in front of you. And with just a little bit of help — like these top accounting tips for new restaurant owners — your dream can be a brilliant reality.