Is Profit on your Menu?
When you google "Is profit on your menu?" you find plenty articles about menu management. While these articles are providing valuable insights, they all will only work for you if your accounting is [well] organized. What do I mean? Well, to turn a profit it needs a solid back office organization.
At the heart of a well working restaurant management information system is a well structured Chart of Accounts. Think of your expenses, streams of income, capital, assets and liabilities: do you have accounts that reflect, what you want to track? If, for example, you record food cost in a single account, its hard to know how much steak you bought, or how much seafood, etc. Why is that?
Have you ever been in a parking garage and could not find your car, later? If you think of each item in your accounting as 'a car and each account as the car's own garage, then its clear: if you don't remember where you parked, which garage you used, it will be difficult to know. If all Meat and Seafood and Poultry etc. is recorded under 'food' - how could you ever know quickly, whether your cost is in line and which area is maybe not. How do you find out whether you pay for the BBQ party of your chefs? Or whether your bartenders are your 'silent partners'? The restaurant business is a tough one. Your accounting can be easier if it is well organized. A perfect guideline how to organize is the Uniform System of Accounts for Restaurants. I believe that, which system you use, for example QuickBooks or XERO or Restaurant365 is less relevant. Most relevant is that it is well mapped out and organized so you can see at a glance how much steak you bought and how much you sold. Now you have the foundation to analyze your numbers. Frankly as the next notch up, we advocate the use of a sub-system for analytics, such as CISBOX. More on that in a future blog. Thanks for checking in!