Understanding The Complexities of Bookkeeping for Restaurants

restaurant kitchen

Restaurant bookkeeping is unique. It can be intimidating–even for seasoned, well-rounded restaurant owners–because it’s a complex practice with many moving pieces.

Keeping restaurant books is also time-consuming, time-sensitive, and dependent on accuracy. But it is critical for making finance-driven business decisions.

Do you Need Professional Cincinnati Restaurant Bookkeeping?

You may have heard the saying: “know your strengths, outsource your weaknesses.” Unless you were trained as an accountant, bookkeeping probably isn’t one of your core skills. Managing the books yourself is like hiring a bookkeeper as your Chef de Cuisine.

A bookkeeper experienced in restaurant record-keeping frees you of day-to-day tasks that can take you away from your most important job: managing your restaurants.

Restaurant bookkeepers know of what “good” financials look like in the industry, and which Key Performance Indicators (KPIs) deserve your focus, based on your business model.

Bookkeepers like BookWerksTM  who specialize in restaurants can analyze your financials to discover operational shortcomings, cost leaks and trends that require immediate action.

Things to Keep in Mind When Looking for Cincinnati Bookkeepers

  1. You can save money using a pro for bookkeeping. A qualified bookkeeping service can work more efficiently and help you avoid costly record-keeping mistakes.
  2. Find a service that charges a monthly flat fee, not by the hour. A monthly fee is the current standard, because it takes away any surprises at the end of the month.
  3. Choose a firm that specializes in restaurants. Restaurants have unique business structures that require specific accounting methods and benchmarks that don’t apply to other businesses.

Good Questions to Ask Before You Make a Choice

To find a good bookkeeping company in your area, ask local restaurant owners with whom you do not directly compete who they use. Read online reviews. Ask for each service’s client list.

Meet them in person to see if you click, and if they can explain their services in ordinary language. Ask them for restaurant-client references.

Ask about their process:

  • Services that manage restaurants’ finances must keep a defined, simple Chart of Accounts.
  • They should break sales and direct costs into Food, Beer, Liquor and Wine, and break payroll down by Front of House, Back of House, Management and Owner.
  • They should maintain Rent, Utilities, CAMs and Security as occupancy expenses.
  • A cloud-based point of sale system that allows for ad hoc and on-the-spot reporting is critical.

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The Critical Importance of Bookkeeping for Small Business

Small businesses usually have a lean staff that works very hard. Even if one of those over-worked individuals has a head for numbers, it can be difficult for them to find time to record every transaction properly. But knowing where you stand financially is critical for the small business owner. You need to know if you are going to be able to make payroll, if you have outstanding receivables, and whether you can afford to expand. A good small business bookkeeper can not only provide the regular reports you need to answer these questions, they can also assist you in making all your office processes more efficient. From staying in good standing with the IRS to making informed decisions, bookkeeping is important to nearly every aspect of your business. If your bookkeeper uses cloud-based accounting software, you can see how things are going anytime, anywhere with an internet connection.