Owning your own restaurant can be fun and exciting if you have experience in the industry but keeping up with the accounting might be a different story… Restaurant accounting is an entirely different entity. You can have years of experience in the restaurant industry, from the front and back house to executive chef or general manager, and you still might not be an accounting expert. Our accounting professionals here at Bodine Perry have come up with a list of simple tips to help you with your restaurant business’ accounting.
Outsourced Bookkeeping vs. Hiring In-House
There are pros and cons for both hiring an outsourced bookkeeper, such as a professional accountant and hiring someone in-house to do the accounting. Let’s talk about the pros and cons of outsourcing…
- You don’t have to go through the hiring process.
- Turnover is eliminated.
- You don’t have to manage them because they are already trained in this profession.
- Costs are lowered because there are fewer employee benefits, healthcare, and payroll costs to deal with.
- Your time is freed up so that you can focus on other aspects of the restaurant.
- Some restaurant owners like having someone close by that he or she can speak to easily or face-to-face.
Now let’s go over some pros and cons to hiring an in-house accountant…Having someone in-house means that you have easy access and communication with that person. You can also hire someone that specializes in restaurant accounting. If you hire in-house, keep in mind that doing the bookkeeping is a complicated task and if mistakes are made it can be quite costly. If you hire someone who hasn’t had much experience with bookkeeping in the restaurant industry, then you might have to chaperone them to make sure that they are on the right track
You might feel more comfortable with one or the other, and that’s fine. Not everyone runs their business the same way. Think of what you would be most comfortable with in order for your restaurant to run smoothly and efficiently.
Keep Up With Your Accounting Records
Make sure that you are staying up-to-date with your financial records. In the end, this will cause less stress and will help you oversee how much revenue is coming in and going out. This task is also crucial should your restaurant ever face an IRS audit.
Know the Different Categories of Restaurant Expenses
The main categories of restaurant expenses are somewhat different from other small business expenses. The first is restaurant labor cost which is accounting for your cooks, busboys, servers, hosts and anyone else who is on your payroll. Payroll taxes as well as employee benefits are included in these costs. Next is occupancy expenses which includes your rent, property taxes, utilities and property insurance. Operating expenses is another important expense. These expenses are under everything that it takes to run your restaurant such as napkins, plates, cups, etc. It is not your employees, rent or the cost of your ingredients and beverages.
Insurance is Key
While staying on top of your bookkeeping is vital to having a successful restaurant, you still want to be covered if any unforeseen circumstances were to take place. Small business insurance will protect your restaurant from legal costs, and other financial setbacks. If your restaurant was to get sued or property damage was to occur, certain small business insurance policies can help protect your restaurant from the downfalls of these incidents.
Talk to Other Restaurant Owners
It might be a good idea to get opinions or advice from fellow business owners. Get them to share their negative and positive viewpoints on everyday life in the restaurant business. Join a group such as restaurantowner.com, where you can learn what works for others and what other owners are struggling with.
Owning a restaurant can leave you with little time to focus on the important things when it comes to running a business. If you find yourself getting behind on keeping up with accounting or bookkeeping for your restaurant, don’t hesitate to ask for help. Our professionals at Bodine Perry are here to get you and your business back on track. Call us at (855) 851-8318 or visit bodineperry.com.