It’s no secret that many restaurants fail within the first few years of opening their doors. But this doesn’t always have to do with location, menu items, or a poor level of customer service. In fact, unless a restaurant has a solid accounting practice, success may be difficult – especially during the startup phase.
A cash-based accounting method is largely best suited for sole proprietorships or one-person operations without additional employees. And as restaurants only operate with a larger team of employees, the accrual method is often the best.
The accrual method is more accurate and detail-oriented. And restauranteurs can easily pinpoint gross profit margins, income, and expenses. Additionally, the accrual method allows us to see how each facet of the financial system compares, and how they are generated – making analysis easier for a restaurant owner to see where money is coming in and going out.
Anyone who has ever worked in a restaurant knows just how confusing inventory can be – especially after a busy weekend. And unlike other businesses, restaurant managers need to take inventory on a weekly basis at least to ensure products are stocked and available for patrons.
Accounting services can help restauranteurs to better track their inventory and keep up with demand.
Accounting for Gratuity
In most restaurants, servers, bartenders, hosts, and other employees usually receive tips or some form of gratuity. And all wages and tips need to be reported in order to stay in good graces with the IRS. But this can be difficult to keep up with.
Expert accounting services for restaurants can help restaurant managers learn how to keep up with gratuity and properly report these earnings.
Financial Optics can help your restaurant achieve greater success by implementing sound financial practices. With decades of expertise in the field of financial consultation, Financial Optics can easily keep your restaurant finances in check and in good hands.