4 financial basics you should know before you outsource bookkeeping for your restaurant

 All restaurant businesses operate on a very tight profit margin. It is hence of vital importance that you, as a restaurant owner run a tight ship. You need to know the basics of accounting and bookkeeping for your restaurant before you outsource bookkeeping to a professional. Such a basic idea on your part will not only prepare you for working alongside the firm you outsource bookkeeping to, it will also ensure that you are aware of the financial position of your restaurant. The following are some financial basics to keep in mind for your restaurant when you are outsource accounting or bookkeeping.

Management of your restaurant’s cash flow

When you manage your cash flow, you are essentially tracking the cash which goes out as well as comes into your restaurant. When you outsource bookkeeping, this function is basically taken care of by the bookkeeping firm. However, it would help both you and your bookkeeping firm if you know the basics of how to manage your cash flow. Through it, you will also know the business patterns of where your money is coming in and going out from. So whether you have decided to outsource bookkeeping or outsource accounting, knowing how to manage your cash flow will help.

Keeping the restaurant inventory

A restaurant generally has a lot of stock and supplies coming in regularly, which keeps it running. When you outsource bookkeeping, your bookkeeping firm needs to carefully review your restaurant inventory so that you can avoid losing money on inventory. Taking a regular look at the restaurant inventory like supplies, products and food ingredients should be part of your day to day activities. This will help in managing your restaurant’s bookkeeping efficiently. The decision to outsource bookkeeping will come handy in eliminating the losses related to inventory. You can also learn a lot while interacting with the professionals when you outsource accounting.

Keeping records of your restaurant

When you outsource bookkeeping, your record keeping remains updated at all times. You will hence be able to see the profitability and overall financial position of your restaurant at all times. An expert firm generally processes invoices and receipts within 24 hours of receiving them. Interact with your bookkeeping firm and know the basics about keeping records. This way, you will be able to keep track of your finances well.

P&L Statement

A profit and loss statement holds a lot of importance for your restaurant. As the statement gives a summary of the inventory, income and expenses, you will be able to see the month-by-month progress of your restaurant. When you outsource bookkeeping, the expert firm you hire will provide you with a monthly or weekly P&L statement, which will help you in taking strategic decisions and maintaining the profitability of your restaurant.

Score over your competitors by outsourcing accounting services

 Accounting is undoubtedly an integral part of running and developing a business successfully. In addition to helping run the day-to-day functions smoothly, accounting also ensures that the financial picture is clear in case you are looking for an acquisition or a buyer for your business. However, taking care of the accounting functions is no small task. After all, you are not an accounting expert. That is why outsourcing accounting services may be the best decision to achieve your business goals. Hiring an expert for accounting services not only ensures that your finances are in the right hands, it also frees you to take care of strategic decisions so that you can stay competitive in the business.

Outsourcing accounting services to an expert

Many business owners try to take care of their accounting functions by hiring a full-time in-house accounting staff. This is a very expensive option, as hiring, training and retention takes up a lot of business resources. But now, in the cut-throat business scenario, it is financially more viable to use a professional accounting service provider who has the potential to save 40-60% of accounting costs. When you outsource accounting, your work is done by expert accountants, reducing the chances of errors and producing impeccable records. Due to the growing popularity of outsourcing, the number of accounting service providers has also increased exponentially. If outsourcing accounting services can save you significant costs as compared to in-house hiring as well as get the work done efficiently, why would you want to have an in-house accounting department?

What you can expect from accounting services

When you outsource accounting, you will have a team of accountants working dedicatedly on your business financials. Most companies provide custom services, tailored to meet your business requirements, so that you do not have to pay for any service you don't require. Such custom solutions are also scalable, you so can change your workload at any time. However, discuss the details with your accounting service provider so that you know the details beforehand. When you are outsourcing accounting services, also check out other services of the company like bookkeeping, tax preparation, payroll etc. which could be useful to your business. Also iron out the other details with your accounting service provider and discuss how your financial information will be protected and which firewalls and encryption are used by the company.

When you are outsourcing accounting services to a professional company, you can focus completely on your business activities and get a competitive edge that sets you apart in the market.

Want to increase profits of your restaurant? Think of outsourcing accounting services

 In our last post, we discussed some basics of outsourcing accounting services for a restaurant business. Continuing with our topic of restaurant accounting and bookkeeping, we thought of highlighting HOW outsourcing accounting services can help your restaurant business grow. As said before, profit margins of restaurants are quite thin as compared to other businesses.

Outsourcing accounting services is a good way to ensure that your costs are reduced while getting your financials done efficiently. Some ways in which the decision to outsource accounting can help your restaurant are:

1. Maintain Impeccable Restaurant Financials
Having your books of accounts updated at all times is very important, especially in the restaurant business. Outsourcing accounting services to an expert accounting firm ensures that there is a team of experts working on your books at all times. Having impeccable records means that you won't have to scramble at the last moment when it's tax time. If you are trying to take care of accounting yourself or hiring a bookkeeper, you are likely to make mistakes too. If you outsource accounting, you eliminate any errors that your books might be having. Accounting professionals of an experienced accounting firm ensure that your books are free of any errors and up to date at all times.
2. Spend More Time on Expansion & Profitability
As a restaurant owner, the most important benefit of outsourcing accounting services will be the time you save. You can spend this time on thinking about strategic opportunities related to expansion, mergers or simply increasing profitability. When you outsource accounting, you leave all the non-core functions headaches to an accounting firm, while you focus on important, revenue generating or expansion activities.
3. Save Costs and Increase your Profitability
A good way of increasing profit margin of your restaurant business is reducing costs related to everyday activities. Outsourcing accounting services not only save you the cost of hiring in-house staff, it also saves you the money spent in training and hiring. If you are allotting space to your accountant, you can also save on its rent by deciding to outsource accounting. The savings that you accumulate over a period of time added to your bottom-line or re-invested in your restaurant.
4. Take Strategic Decisions with Ease
Time is of essence when you are thinking of taking strategic decisions. If your books of accounts are not updated or you do not spend enough time exploring different opportunities, you might end up taking wrong decisions for your restaurant business. Outsourcing accounting services means that you will have the time to explore any opportunities you find for your restaurant. It also means that when it's time to take the decisions, the financial position of your restaurant is crystal clear, so that you can judge whether the deal is viable for your business or not. Outsourcing accounting services hence helps in taking strategic decisions as well.

With outsourcing accounting services, you can not only increase profits of your restaurant business, you can also manage it well and expand when the time is right. When your profit margins start showing an improvement, you will know that the decision to outsource accounting was a good one for your restaurant.