Information From Restaurant Accounting Software
In the past restaurant managers have thought that accountants were only useful for tax purposes. Every year managers would call in the accountant at the end of the year to clean up the books and prepare the taxes. However, more and more managers are recognizing that managerial accountants can provide day-to-day accounting information that can be used for strategic purposes. Accountants can use restaurant accounting software to generate reports that benefit the restaurant decision makers.
One very useful report for restaurant owners is a balance sheet. The balance sheet shows all of the assets, liabilities, and owners’ equity of the restaurant. Understanding the balance sheet and analyzing key restaurant ratios can help managers see where their restaurant currently sits, and where they want it to be sitting in the future.
For example, a restaurant owner might see that the company’s debt ratio is only about five percent (in other words the company has not taken out much debt). This might be a good thing in the eyes of the restaurant owner or it might be a bad thing. If a restaurant owner is trying to grow the restaurant as fast as possible, then a five percent debt ratio means that he/she needs to leverage the restaurant more. Accounting software for restaurants can generate balance sheets at the click of a button.
Another very useful report for restaurant owners is the statement of cash flows. Most small businesses fail because they didn’t manage their cash correctly and weren’t able to make payments to employees and vendors. This problem even happens to companies who are making a lot of sales. A good accounting package will show a company’s cash from operations, investing, and financing.
Perhaps the most useful report on a day-to-day basis for managers is the income statement or statement of profit and loss. This statement has all of the revenues or sales generated by the restaurant. It also has all of the expenses the restaurant has incurred, including cost of food, salaries, utilities, and rent. This report shows the gross margin for entrées sold and it also shows whether the restaurant as a whole is profitable. Traditionally these reports were only generated every few months. However, nowadays a restaurant accounting software package can generate a net income report for managers several times a day. This can make it easy for managers to see which dishes are hot and which dishes aren’t.
In short, the days of only using an accountant to fill out your tax forms are over. A good accountant can help you set up an accounting system that will provide you with the information to make your restaurant successful.
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