Time to take a small walk into the kitchen and have a look at how the sausage gets made! More accurately, how we make sure the sausage is profitable and will continue to be made for years to come. This month we dive into the world of restaurants and look and some examples of how Deitz Consulting can make sure they stay profitable so they can continue to serve us amazing food!
Like any industry, there is a lot of variety within the restaurant vertical. With a wide range of service types ranging from fast food to fine dining, a huge variety of ingredients with different shelf live depending on their menu, and even a huge range of ownership options ranging from single owner all they way up to restaurant groups; restaurants are a vertical that keeps us on our toes.
Building a great foundation
Margins in the restaurant industry are incredibly important, making it essential to have an entire system working together to track margins and maintain profitability. This means putting in time from the beginning to set up the point of sales system correctly and integrate the data from it with the accounting software. Making sure these 2 systems work together and that all expenses and revenue flow into the correct categories is a cornerstone of keeping restaurants on track financially.
Every restaurant manager or owner has their own unique system of tracking costs and revenue and at this point nothing surprises us anymore. It isn’t even rare for us to come across paper ledgers when we first get engaged with a new restaurant, and there is nothing wrong with that if they are accurate!
By allowing the Deitz team to digitize whatever records you have been keeping it becomes easy for the entire team to collaborate and stay on the same page. Automating data transfer between the POS system and QuickBooks eliminates a possible opportunity for human error and gets the information where it is needed most.
It is also important to track revenue correctly and make sure that revenue from food stays separate from the revenue made from alcoholic beverages. Since these are taxed differently it is imperative that these are not intermingled. They also have very different profit margins which means mixing them up will not only get confusing come tax season but could give bad information about how much money you are making.
Once this foundation has been created the Deitz team will conduct monthly review to make sure all information is going into the right categories. This monthly review will also make sure we know exactly what the business margins are to keep the restaurant in the black.
Getting labor right
Setting up employees correctly can be interesting for restaurants since they have a different minimum wage and must track tips. This something that most employers don’t have to deal with since tips are fairly unique to the service industries. Getting employees that make less than standard minimum wage set up correctly and tracking their tips to make sure they get employees up to standard minimum wage is critical.
Restaurants are an incredibly difficult business to run for many reasons, keeping the financials straight doesn’t need to be one of them! Making sure customers are getting the best service possible, keeping the kitchen organized and efficient and finding new interesting ways to get people in the door is a full-time job! Getting some help with the books is just good business.
If you don’t have your arms around your current financial state, or know what your margins are, then reach out and let’s have a quick call to help find your path to financial stability. Reach out today!