Accounting for Restaurants: Financial Controls to Consider

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Have you ever thought of starting your own restaurant? Have you tried running one? If you have, you probably know already that it is not an easy path to take. It is one of the most difficult and most competitive industries. Accounting services in the Philippines verify that a slight or tiny mistake in your daily operation could already make a significant impact on your finances. Running a restaurant will require you to have a solid accounting and financial process. Having so can give you control over your profitability and cash flow. 

Running a restaurant may be difficult but that does not mean it is something you should not pursue. If you want to run a restaurant or if you already have a restaurant, there are financial control mechanisms and processes that can help you. With these financial controls, you can make better financial decisions and impact your finances positively.

Point of Sale System

A point of sale system or POS is a modern-day cash register that records the goods sold and the payments of your customers. Regardless of the size of your restaurant, you must ensure that you are using your POS strategically and effectively. It will not only help you with management, it can also generate data on key business metrics. It can tell you your best seller and remind you of your stock levels. 

Moreover, it can help reduce human error and fraud from happening. Tax and audit services in the Philippines attest that if you know how to use the system properly and effectively, you can even send financial data directly to your accountant. This is even more helpful during audit season. It is important that you know the features and capabilities of your POS so your business can get the most out of it.

Three-Way Matching System

One of the most cost-sensitive activities in running a restaurant is the purchasing process. If you are poor with purchasing practices, you might have cash flow issues, incorrect stock levels, and balance sheet errors. This system can help you maintain control over the food and beverage cost, accounts payable, and purchasing process.  

It’s a check and balance system that requires the documents for every transaction you make. It will need a purchasing order from someone authorized to make an order, vendor’s receiving report which includes the proof of payment and delivery, and lastly, the vendor’s invoice or bill. The information found on the document must match before the transaction can be entered into your books of accounts. Using this system helps reduce errors and fraud.

Food Cost Planning

You need to be vigilant in calculating food costs so you can forecast your potential gross/net margins and your gross/net profit across each product. If there is a change in the cost of raw materials, it is likely going to have a significant impact on your profitability. That is why it’s important that you have an efficient and proper plan for your food cost and identify whether the product is a profit or loss

In addition, you need to ensure you understand that poor portion control, unanticipated wastage, and stock substitution are factors that can impact your restaurant’s cost plan. It would be best for your restaurant to stick to a food plan. That way, you can have more chances of achieving your financial goals.

Payment Reconciliations

You will receive different forms of payments coming from different sources. Your customers may pay via cash, credit/debit card, vouchers, and or coupons. You need to ensure you have a rigorous payment process to avoid payments being overlooked and making incorrect recordings. 

Having such a process will make sure your follow-on bank reconciliation process is getting accurate information. According to tax services in Manila, having the right data will also make it so much easier for you to stay compliant with your taxes

Management of Inventory

Managing your inventory is one of the many critical activities that restaurant business owners need to look at. This involves the buying and/or selling of goods. Inventory management is especially crucial for restaurant businesses. If you have excess inventory, it can lead to wastage, disposal expenses, and storage issues. 

It is very important that you constantly check your purchase and inventory purchases and make sure they are in line with the cost of your recipes to maintain your gross profit margins. Constantly and continuously counting your inventory will keep food waste under control.

Navigating the challenging restaurant industry is easier with our accounting services in Pasig. Whether you’re a hopeful restaurateur or an experienced owner, we’ll be your trusted financial companions on the path to culinary triumph.