Having a restaurant is nearly everyone’s dream but just being a good cook is not sufficient in the restaurant space today. To survive, you expect to know how to cook food and how to sell food, maintain the sales, and then tally your sales. Yes, that is right, even if you are not an accountant to survive in the restaurant space today, you should know and be prepared with the numbers game a little to make sure you understand what is happening and what is not. Today a restaurant is no longer just a food service provider but a business, and like every business, accounting in a restaurant needs to be carefully handled. Correct restaurant accounting is one of the essential factors in making a business profitable. Still, it is often overlooked because it can be difficult to track and make sense of all those numbers.So there are few accounting tips for a restaurant which are mentioned below:
- Know the language – Everyone does not understand the accountancy language because it is not easy as we say. So the owner should have some knowledge about debit, credit assets, equity, etc. should be familiar. One should not ask you to become an accountant yourself but understand the basic rules and terminology to know what you are doing entirely and what your bookkeeper or accountant has been performing all along. If you know their language, you will work better with them, and accounting for day-to-day finances will get manageable for you.
- Employ an accountant – The most familiar with the numbers is the accountant. So hiring an accountant to help you with your finances is a good notion for any restaurant. An accountant will easily access the business’s status and can also easily manage the profit & loss and the flow of money.
- Understand the figures in accounts- The next step is to understand your charts and graphs which presents the money flowing in and out of your business. A standard chart of accounts includes assets, liabilities, expenses, revenue, and owner’s equity. You need to understand the profitability concept vs cashflow concept in the business.
- Pay your quarterly business taxes- As a small or a prominent business owner, you’re required to pay quarterly business taxes. As aware citizens of the country, we should spend our taxes entirely and on time.
- Recognize your expenditure- To successfully account for your restaurant finances, you need to know the expenses- Fixed and Running. Fixed costs are those which stay the same. These contain things like rent, depreciation on equipment, salary, etc. The second expense is running expenses, better known as a variable cost, necessary to run the restaurant but keep changing, like electricity bill, spilled food, water bill, etc. Understanding these expenses will make it easier to account for them and eventually control them in the long run.