5 Restaurant Accounting Mistakes that are Costing You Money
If you Own or Manage a Restaurant, then you have a lot of priorities. You have to oversee, staffing, supplies, customer service, and oh yeah, the food. With everything going on it can be easy to make accounting mistakes. Accounting mistakes can cost you money, so let’s take a look at five restaurant accounting mistakes that could be costing you money.
Not keeping track of cash
Restaurants operate on a lot of cash, and that’s great. Cash is King. Everyone loves cash. The downside to cash, is it is difficult to keep track of. If no one documents a cash transaction, then there is no record of it. It is like it never happened. This can be a big problem, especially since it can get really busy. There are a lot of distractions, so it can be easy to misplace or not record a cash transaction. This also provides an opportunity for thieves. The best practice is to have a firm policy and procedure for handling cash and cash transactions.
Not keeping track of everything
This accounting mistake kind of ties in with the one above, but cash is so important, it was worth singling out. All financial transactions have to be recorded or your accounting will be incorrect. When you are busy, it can be easy to miss a transaction here or there. Unfortunately, not recording these transactions can throw off your financial picture. How your restaurant is doing can be distorted, which can lead to making poor decisions based on bad information.
Not reconciling accounts
In the restaurant business, it’s really important to reconcile accounts. First and foremost, everyday you have to make sure all of the money brought in matches the sales of your delicious cuisine. This painstaking practice is the cornerstone of restaurant cash flow management. When you do this diligently and consistently, it will not only help you keep track of everything, but it will specifically help with tracking cash as well. For some Restaurant Owners and Managers this is a labor of love. They like to do this personally at the end of every night, so they can feel the success of the day. If you don’t enjoy this, then it is a necessary evil, but one which has to be completed to prevent the loss of money.
Not setting budgets
Here is another mistake which can cost your restaurant money. This one is super easy to make because it requires doing something many Restaurant Owners and Managers don’t know how to do. Setting budgets. Budgets should be set for food, supplies and staffing. The benefits of setting and operating on budgets is that it controls spending. This is particularly important for perishables. Any time you throw away food, you are losing money. A little bit here and there can add up to a lot. The same goes for scheduling staff. It is a delicate balance between having too many employees on hand and not enough. Learn more about how an employee schedule maker can help you.
Hire an Accountant
If you don’t work for a conglomerate with a dedicated accounting department, then you should hire an accountant. The cost of a good accountant will be outweighed by the money they save you. Be sure to hire an accountant who specializes in restaurants. As you know, restaurants operate differently than conventional businesses and your accountant should be experienced in the nuances of running a restaurant. The same can be said for accounting software you may use. It is to your advantage to utilize tools designed specifically for the restaurant industry.
Think about the five restaurant accounting mistakes that are costing you money discussed above. Are you making any of them? How could you do better? If you are working hard to improve your menu, and make your restaurant better overall, try to see how you can improve your accounting as well. After all, as Pop’s used to say, “a penny saved is a penny earned”.