When it comes to running your restaurant, your expenses are probably one of your biggest headaches. If they get out of control, you’re in the red. Yet, it can be challenging to stay on top of them with so many other tasks to take care of. Here’s how to ensure that you manage and track your expenses like a boss.
1. Use Restaurant-Specific Software
It’s a lot more challenging to stay on top of restaurant expenses if you’re using a spreadsheet to log them. Accounting software is really affordable these days, and some are geared specifically toward restaurants, and include features like inventory management and purchase order management.
If you use inventory software (in addition to or as part of your accounting software), your expenses are recorded as soon as you place an order for more artichokes. And your point-of-sale system can link up to your inventory and ordering systems so that, when someone orders the second-to-last ribeye, you automatically put in an order for more.
2. Assign Someone to the Job
It might be your job as restaurant owner or manager to oversee expenses, but if anyone else is involved with inventory management, get a plan for who will be responsible for logging the expenses in your accounting software.
If your chef does the ordering but you handle the expense management, make sure he gives you a receipt or invoice for everything that he orders. Your best bet is to scan any outstanding invoices into your accounting system to pay rather than letting them pile up on your desk and risk them getting lost in the mess. Teach the process for getting expenses logged in the training process to ensure that new hires know how to handle them.
3. When You Charge It, Log It
Using a business credit card can help you keep cash flowing in your business, but use it wisely. First, pay off the balance each month, otherwise you end up spending far more than you budgeted for anything you charge, thanks to interest rates.
Second, record the expense as soon as you buy something with your card. You may not remember in a few weeks that the $298.45 charge on your card was for your napkin service, so record and categorize the expense as soon as you charge it. This saves you time later digging back through invoices to match to the expense.
4. Organize Your Expense Categories
Tax season won’t be as much of a headache if you do some planning and organizing ahead of time. Use expense categories in your accounting software that align with what your accountant will need come tax time.
Spend just a few minutes at the end of each month making sure each expense is appropriately categorized so you don’t have to spend hours doing this when it’s time to file.
5. Log Every Single Ingredient Used
It may seem like a waste of time to calculate the expense for a dash of salt in a recipe, but a dash multiplied times hundreds of dishes a year adds up. When you’re calculating your food cost, account for every spice, every drizzle of oil. This helps you determine what the cost per dish is, which then helps you figure out what to charge so that you maximize profits for that dish.
Also, factor in overhead costs like marketing and rent into the calculation for your food costs. Each dish should include enough profit to help cover these expenses…and then some.
6. Make It Easy for Employees to Track Time Worked
Hopefully you’re not still using a paper sign-in sheet for your employees to “clock in” each day. There are apps and software that not only let employees clock in digitally (removing any potential for human error or fudging hours worked) but also let you create their schedules and send them via text or email.
When your staff can access their schedules from their phones, you cut down on the time you spend answering calls or texts asking, “when’s my shift?” and can focus on other things. When you use time-tracking software, payroll gets easier (and more concise), too.
You don’t have to be a CPA to get a handle on your restaurant expenses. A little organization upfront and ongoing maintenance means you can spend just a few minutes each week managing expenses rather than untangling a mess once a year.