Make Your Bookkeeper Your New Best Friend
You may be running a restaurant, doing your own admin, and have appointed a generic accountant, thinking you have all the help you need to manage the finances of the business. The truth is you also need a bookkeeper!
Marc Bertorelli, Business Development Manager at hospitality accounting firm, Paperchase, tells you why your bookkeeper should be your new best friend.
You’re in hospitality because you enjoy feeding people and you are good at it, so you decide to open or manage a restaurant. However, in a small restaurant, if you’re the patron, you may wear many hats. You may have an accountant to take care of the statutory requirements, such as end of year accounts, filing, tax, and VAT, but what about the day-to-day financial admin? You may be trying to do your own bookkeeping, paying suppliers, paying wages, sharing tips and services charges fairly with the staff and all this may be very alien to you, and you may wonder how you, a talented chef, is now working as a bookkeeper.
Most small restaurants will be using accounting software, like Xero, Sage or QuickBooks, primarily to generate invoices, as well as record their monthly financial activity and in truth, this sort of package may be recommended by accountants to make their job easier at the year-end. In truth, by the time you get that set of figures they may be over 12 months old and it may be too late. This is like a rear-view mirror, and you may have had no idea where you have been in the last year and by now, you could be fast going broke or out of business altogether!
To make informed decisions in your business and to act on changing trends, increases in running costs, understanding increasing food costs, you need regular monthly financial intelligence. In a fast-moving business you need to know where you are financially at all times. This is something your accountant will probably not be doing for you right now. You will need a regular update of exactly where you are financially and without that intelligence it’s like driving a fast car, in the dark with the lights off! That is why your bookkeeper is your ally and your best friend who will be able to tell you exactly where you are on a weekly and monthly basis.
In your restaurant you need both accountant and a bookkeeper. But what is a bookkeeper? It sounds like slightly old-fashioned professional, archaic, and not cutting edge. Wrong and after reading this you might want to make your restaurant bookkeeper your new best friend. In simplistic terms, whilst you are putting money in the till on a weekly basis, you need to know how much of that income is really yours, how much belongs to suppliers and how much you need to pay to staff. That is what restaurant bookkeeping will do for you. A good restaurant bookkeeper will manage cashflow, forecast where you need to be and tell you where you actually are. With this insight, you will be better equipped to run your business.
A bookkeeper has a specific set of skills and will furnish you with your exact financial position, where you are each week, with management accounts, giving you an exact reference as to how your operation is running. This will include recording the activity in your restaurant, which will include the financial transactions, making sure that data is correctly entered on your accounting package and with this information you can start to balance your books. On a weekly and monthly basis, your bookkeeper will cross-reference your books against bank statements and other source documents to confirm accuracy and determine your exact financial position. Of course, getting cash in and paying suppliers in a timely manner is also part of this process, as is running payroll, managing Tronc sharing service charges and gratuities.
In a business like yours, never underestimate the volume of paperwork that it will generate, and that you will need to stay on top of, to prevent it getting out of control, resulting in you starting to sink! A restaurant bookkeeper will help you to understand the data that paperwork contains and will help you to begin to see patterns emerging, for example: which particular days are slow, which dishes do not sell as well and which days you need less staff, which could result in savings on salary. With this information you could further optimise your strategy and begin to see in the numbers what is working and what is not. This can help you to change things quickly and effectively in your business during the week, month, and year, before your accountant tells you it’s been a bad year and there is no dividend for you.
If you want to learn more about how Paperchase can help you to understand what is happening in your business and how to turn you monthly data into effective business intelligence, contact us here or call Marc Bertorelli on 07545 922908.
Ironically, one testimony to the benefits of good bookkeeping, is that while Paperchase often gets referrals from restaurants, we also often get recommendations from accountants, who understand the power of good bookkeeping!
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Marc Bertorelli gained a BSc (Hons) in International Hospitality Management from Oxford Brookes University, following which, he has worked front-of-house with many illustrious establishments, including the London Mandarin Oriental, the Michelin stared ‘The Foliage’ and the Savoy. Marc is now Business Development Manager of Paperchase, the UK’s leading hospitality accountancy, bookkeepers and business improvement specialists.