The overall success of any business is usually determined by revenue and profits. An increase in clientele, consumers, and customers are also indicative of achievement, but ultimately, the financial numbers are what businesses owners track the most. This is for good reason, as cash flow dictates every aspect of a company, from purchasing quality equipment, to hiring seasoned employees, to overhead costs.
But it is not always easy to keep all these aspects of a business straight, clear, and organized, especially in a restaurant. There are patrons coming and going, employees to manage, supplies to replenish, and overall profits to monitor. As a result, restaurants squander money every year because of poor money management and accounting. In fact, studies show that about a quarter of all restaurants close or sell within their opening year because of poor accounting. And this extends beyond the restaurant world as well. In 2012, HP was reported to have lost about $5 billion because of accounting woes.
So what can you do?
If your restaurant is facing financial difficulties, choosing an accountant to help you could be the best way to avoid a major financial debacle. Good accountants will be able to balance your books, draw up a financial plan, and give you valuable restaurant accounting tips that will not only keep your eatery afloat, but push it toward success.
One of the main areas that accountants for small businesses focus on is bookkeeping. This means that all transactions, even small ones, are recorded in order to track where money goes. All receipts, supply purchases, petty cash, and expenditures are recorded in an organized fashion. An accountant will likely want to see how you have been tracing these aspects of your business, and want to re-evaluate. This is critical because holes in this trail, such as missing receipts or unaccounted for purchases, can be glaring indicators of lost revenue.
Some other restaurant accounting tips these professionals will be able to give you include paying taxes on time, and creating a financial plan with a clear goal. It is a known fact that the first years of a restaurant often undergo severe growing pains that usually involve putting in more money than you make. This often gives restaurant owners an incentive to put off paying their taxes and simply swallow the late fee. But with the help of a qualified accountant, this goes out the door, as accountants can keep track of how much you owe in taxes and get them paid on time. This will avoid shut down, as well.
Accountants will also draw up a financial plan for you. If you do not have a solid vision of where you want your restaurant to go, no amount of restaurant accounting tips and tricks can help you. Your goal for your restaurant has to be at the forefront of your mind, and an accountant can help flush these details out in writing. When you put your thoughts into writing, and compare it with accountant-generated financial reports about your restaurant’s current success, you will be able to evaluate how close or far you are to reaching your target.
There is no doubt that running a successful restaurant takes diligence, and perseverance. But without a clear financial system, all your hard work could be leaking out the back door without your knowledge. With the help of a highly qualified accountant, you can get your restaurant back on track, get back to focusing on your food, and enjoy the fruits of your labor. See this link for more.