Amidst all the mayhem of “The Menu”, I found myself wondering that exact question. How on earth could a restaurant with five tables on a private island actually be financially feasible?
President Trump signed into law the Families First Coronavirus Response Act requiring companies to provide both limited paid sick leave and expanded family leave to employees impacted by the COVID-19 outbreak effective April 1st. We're joined by Gaye Weinberger of Organization Ink as we touch on Unemployment, Sick and Paid leave and how it all works.
The CARES Act includes a loan program for keeping employees on the payroll during the COVID-19 epidemic. Here's how it works!
You may have noticed in the last couple of weeks that AMex’s bank connection in Quickbooks Online switched to a multi-card setup, where each employee card gets its only account in the chart of accounts. This is great if you have two or three cards, but if you have half a dozen or more… well, it’s a real pain in the ass. Here’s how to fix it.
Any successful restaurant needs successful financial oversight, but owners and managers have plenty to do aside from these concerns, like running the restaurant.
That’s why management may want to consider restaurant bookkeeping to support these duties, especially during the busy seasons or expansion. After all, everyone could use a cover now and then.
A restaurant bookkeeper oversees financial and budgetary records of a restaurant, commonly known as the “books”. They ensure the accuracy of figures like revenue and expenses, track inventory and tax obligations, and make recommendations to maximize profit.
Here are some of the specific tasks that restaurant bookkeepers tackle.
Above all, bookkeepers assist with tracking the restaurant’s financial performance so that you can make sure you’re putting more money into your pocket than you’re taking out of it.
This involves monitoring and recording metrics like revenue and expenses for accounting reports, which allow management to address inefficiencies and improve operations.
Rent, equipment, utilities, marketing? You might see these expenses in your scarier dreams, but keeping count of them during the daily bustle of restaurant life can prove more difficult.
A bookkeeping service will stay on top of your obligations to help you avoid missing your payments and keep your costs in perspective.
While software can track orders and receipts nowadays, double-checking these results is important.
A bookkeeper will review order history to ensure that all customers have been appropriately charged so that you don’t lose out on revenue.
By Analyzing figures like sales volume and item popularity, a bookkeeper can help to advise on food and supplies orders so that neither too much nor too little is ordered.
They can also reconcile vendor invoices with shipments to ensure all materials received have been properly charged and logged.
Bookkeepers can review timecards to ensure that labor payments are accurate. As part of this responsibility, they’ll monitor restaurant payroll and income taxes so that you have proper records during the most wonderful time of year – tax season.
On the topic of taxes, a restaurant bookkeeper will also tally the sales tax owed by your business so that you don’t accidentally overlook those requirements either.
Having sufficient cash on hand is critical for providing change and employee tip-outs, but you’ll also want to keep reserves in the bank for credit or debit expenses.
By employing the help of a bookkeeper, you’ll have someone who can maintain a proper balance of funds so that you always have your money exactly where you need it.
Restaurant bookkeeping services are an investment in your business’s financial well-being and yourself as an owner or manager.
With help on bookkeeping duties, you’ll have more time for the things you need to do, like de-escalating a Yelp war with a demanding customer, as well as the things you love to do, like curating an unforgettable dining experience.
When it comes to owning a small restaurant, it takes more than simply creating delicious food to ensure your business succeeds. What about the backend side of things? You know, the business admin and bookkeeping? Even the smallest of restaurants need to keep an eye on their accounts to effectively manage the day-to-day finances of their business and track any profits they’re making while knowing where to make any future improvements.
Here are the first steps you should take to get you started.
Depending on your budget, there are various ways that you can keep your books, ranging from setting up your own spreadsheet to hiring a professional team of accountants who provide restaurant bookkeeping services and can do all of the hard work for you.
In short, if you’re doing your own bookkeeping, you need to track each of these things:
• Sales: How much money is going into your till
• Cost of food and supplies: How much money you’re spending on food for your menu
• Labour: How much money you’re spending on staff labor
• Inventory value: The monetary value of the stock you are holding at all times
• Fixed costs: These are usually regular outgoings, such as rent and waste disposal
• One-off costs: Anything unexpected that you’ve spent money on
To work out where there is room for improvement at your restaurant, you should create monthly profit and loss statements using the information above. You can then use the following formulae to determine future business strategies:
• Gross profit = sales – cost of goods sold
You can use this figure to create sales targets
• Gross profit margin = (gross profit / revenue) x 100
You can use this figure to help set prices on your menu
• Operating profit = gross profit – operating expenses (including labor, fixed costs, one-off costs)
This is the amount left over after all operating costs are taken from gross profit
• Net profit = operating profit – taxes and other expenses
Ultimately, this is the figure you need to focus on to determine whether your restaurant is making money or not.
It can seem pretty overwhelming at first, so here are our top tips to bookkeep efficiently:
• Keep track of every payment, including all of the dates they were made
• File bank statements and invoices in order, so you have them on record, and they are easy to locate when necessary
• Be strict with creating monthly profit and loss statements
• Consider hiring a company to do your bookkeeping for you, which will, in turn, free up your time, so you can concentrate on growing your restaurant business
It’s perfectly understandable to want a team of qualified accountants to look after your books for you, especially if you’re a chef with a passion for delivering mouth-watering meals or a restaurateur with a desire to mingle with diners front-of-house. Of course, hiring professional bookkeepers also reduces the risk of error when it comes to your financial recordings.
If you’re a small restaurant owner, then get in touch with PrixFixe. Our friendly team of experts provide accounting and bookkeeping services, specifically for businesses within the hospitality industry.
If you’ve been in the business for a while, you’ve heard the terms “food cost” and “labor cost” thrown around. Generally speaking, it usually comes up when partners at a restaurant are reprimanding the kitchen about how one of the metrics are absolute garbage. You’ve also probably heard the chef counter with an excuse about how good the other metric is. Arguments ensue. Voices raise. Cooks run for cover.
We get it, you’re probably thinking the thought of bookkeeping sounds boring but honestly, understanding what it is and, more importantly, appreciating its value can have a huge role in the success of your restaurant. Put simply, however big or small your restaurant is, bookkeeping is essential, not just for now but to help you prepare for the future too. And remember, if you start to neglect bookkeeping, then it’s difficult to catch up.
A lot of businesses got stiffed on the Restaurant Revitalization Fund (RRF) Grants. After the program closed on May 3rd, less than 10 days after the launch of the program, the Small Business Administration ended the program on Jul 3, 2021, claiming they had released the full $27.6B the organization was allocated. More recently, the list of recipients was released, sending many independent restaurant owners into a fury, as the receipts on the top of the list were large franchises of Dunkin Donuts, Denny’s and Panera, rather than actual independent restaurants. In the end, 5% of the RRF receipts, ended up with 40% of the money.
That leaves many small business owners out of the pool. A staggering $60B in applications is left unfunded. That begs the question, what options are left for those that weren’t lucky enough to receive RRF money?
The ERTC is the red-headed stepchild of pandemic relief. The program was quickly shoved in the corner in favor of the Paycheck Protection Program. However, now that time has passed and the PPP has been fully utilized, business owners and accountants are turning their attention to this program. It works in tandem with the PPP (but you can’t use the same money on both programs, effectively double-dipping), but you can earn a credit of up to 70% of wages per quarter, with a limit of $10k per employee per quarter for 2021.
This setup is similar to the PPP programs.
If you have less than 500 full-time employees
And:
Operations either fully or partially suspended due to orders from a governmental authority due to COVID-19, OR;
The business experienced a significant decline (50%) in gross receipts when comparing either the calendar quarter or the prior quarter to the corresponding quarter in 2019.
Well, then you’re in luck, you’re eligible for the ERTC.
Reach out to your accountant. This is an absolutely BRUTAL process to calculate these numbers, and it's absolutely not something you should do only on your own. Your accountant should be able to help with this, but be patient, as they have a lot of work on their plate already. Ask them honestly if they are going to be able to handle it, and if not, reach out to other accountants to get it done.
There is a staggering $30B remaining in the Economic Impact Disaster Loan. Qualified businesses (which is basically anyone who was open prior to 2020) can take advantage of this program. While the other options have been either grants or tax credits, this program comes in the form of a loan through the Small Business Administration. Applicants can qualify for up to a $500k loan at 3.75% for 30 years. In the world of commercial loans, this is a rock bottom rate and a great term. There are some strings attached to this loan (can’t be used for new equipment or expansion of the business), but, if you’re willing to take on some debt, you might as well take advantage of this cheap money.
The calculation for the loan amount is your 2019 Gross Profit (Revenue - Cost of Goods Sold).
You can apply for this loan here, and if you have all the information, it takes about 20 minutes.
If you’re still holding out for the RRF, don’t. Simply put, the political capital behind replenishing the fund is few and far between. The Independent Restaurant Coalition is putting pressure on Capitol Hill, but it doesn’t seem like politicians are interested in replenishing the fund now that businesses are opening back up. There are some clever bills out there, looking to reallocate unused aid, such as the ENTRÉE Act, but there isn’t much news on the progress of the bill. In short, plan for the worst, and hope for the best.
Also, call your state representative and demand support.
Every hospitality business is a little different. Some businesses have catering, retail, multiple locations, maybe even some skeletons in the closets. That’s fine! We’ve seen it all, but we need to know all this before we’re ready to give you a quote. We promise, it won’t take long, so:
