Many people dream of having their own business in the food industry. You are not alone if you often visualize yourself owning a restaurant or cafe. It may sound quite the fantasy at first, serving your customers signature dishes you whipped up in your own kitchen.
However, before you embark on this business, it’s good to get a reality check. The majority of veteran restaurateurs will attest that running a resto business is not as glamorous as it seems when thinking about it compared to actually doing it. Of course, running a business is difficult but one of the most competitive and toughest industries to build a profitable business is the restaurant industry.
Restaurant business owners need to keep a keen eye on their finances for their businesses to succeed. After all, you deal with highly perishable goods, plus you have to maintain the stores cleanliness and manage your staff. Thus, managing finances is crucial and for restaurants, it needs a thorough financial process and control. Some even hire professional accounting services in the Philippines to help with this process. If you’re thinking of opening up your own restaurant, here’s what you need to know to make sure that your finances are correctly managed.
Diligent Planning for Food Cost
If you’re planning on opening a restaurant or have already opened one, one of the critical things to do for your resto business is to plan for the food cost. The cost of the raw materials has true implications on the profitability of your restaurant. When planning for the food cost, restaurants must be very vigilant in tracking prices as these often fluctuate.
They need to execute it well because poor portion control, stock substitution, volatile food prices, and unanticipated waste are factors that can negatively affect the restaurant’s food cost plan. If you’re not good at number crunching, consider outsourcing to a reputable firm that offers tax and accounting services in the Philippines.
Vigilant Inventory Management
Managing inventory is an essential activity that involves buying or selling goods. The importance of this is way higher in restaurants because of the perishable nature of the food products bought and sold. Managing inventory is making sure you have the right product at the right time, place, quantity, and cost.
If you have excess inventory, it will lead to food waste, issues in storage, and increased disposal costs. You need to thoroughly check and make sure the purchase and inventory prices align with the food cost. This way, you’ll be able to maintain a steady gross profit margin and continue to see positive returns. Counting your inventory frequently will also make sure that you have minimal food wastage.
Use a Reliable POS or Point of Sale System
Regardless of the size of your business, strategically using the POS or Point of Sale System is crucial to everyday business operations. A POS system is a cash register that can record the payments and goods sold by the business.
It will be able to generate data on the best-selling products, stock level warnings, employee performance, and reports on daily sales. It can also directly send financial data to the accountant of the company which reduces the workload of the employees and help reduce fraud and errors.
The POS system has capabilities that can be very beneficial to your business. You just need to understand and use it well to make it work for your business model. If you need assistance with reconciling data, you can get expert help from a reputable firm offering tax and accounting services in Pasig.
Implement a Three-Way Matching System
The three-way matching system is a system that can help restaurants control food and beverage costs, purchasing processes, and accounts payable. It’s a system that checks and balances whatever goes on in your daily operations, preventing petty theft and other oversights.
Every transaction requires 3 documents related to purchasing–formal order authorization, payment or delivery proof, and the bill. The information it should contain includes goods description, quantity, and of course, the price. It should match before it can be inputted into the books of accounts. It makes complying with financial reporting and auditing simpler for the business.
Always Conduct Payment Reconciliations
There are many forms of payment that restaurants receive. It could be cash, credit card, debit card, money-off coupons, authorized vouchers, and many more. Restaurants must have a thorough process that enables reconciliation of all payments at the time they are received to avoid overlooking payments, making incorrect records, and misattributions.
If you’re running a small restaurant, you may be able to get by with doing your own accounting and auditing. However, if you’re a large chain with a lot of branches, it would be best to outsource the work. You can call our team who offers tax and accounting services in the Philippines. We’d be happy to help your restaurant flourish.
