Unlike Fine Wine, Your Financials Don't Get Better With Age
- Nickque Tan
- Nov 22, 2016
- 3 min read
Often, one of the most striking differences between independent & chain restaurants is the sense of urgency they place on getting their financial results. Chain operators realize the importance of getting super-quick feedback on how they're doing, typically getting their monthly or 4-week financials completed within 7 days, many even sooner. Most independents, on the other hand, seem to have no problem with getting this information many more days, and even weeks, after the end of the period. In working with lots of independent operators, I've noticed there is a direct correlation between the amount of time it takes an operator to get their financials and how profitable their restaurant is.
Operators who place a high priority on getting their numbers quickly, nearly always make more money than those who allow this process to take longer. If you're waiting longer than a few days to know your financial results here are some ideas to speed up the process so you can identify and react to problems and opportunities in a more timely (and profitable) manner.
1. Make fast turnaround of your financial reports a priority. You're the boss, so if you want your financials faster, "YOU" have got to set the standard. Unless you push them, managers, bookkeepers and accountants don't naturally perform at peak efficiency in this area.
2. Get organized. Meet with everyone who is involved in your accounting process to discuss how it could be reorganized to be more streamlined and efficient. Identify all the activities and steps involved in preparing your financials and who's responsible for each function.
3. Get online access to your bank transactions. Your accountant won't have to wait to get the bank statement in the mail to begin preparing the bank reconciliation. (this nixes a popular excuse for being slow)
4. Process your invoices, manual checks and sales reports daily. Don't wait until the end of the week or month.
5. Tie a portion of management compensation to financial results. This usually causes managers to become MUCH more interested in your restaurant's financial performance and motivates them to be a positive force in seeing that the financial statements are completed in a timely manner.
6. Prepare a weekly Prime Cost Report. Getting weekly feedback on cost of sales and labour, your two biggest and most volatile costs, will result in lower prime cost, guaranteed! Do this and you won't have to wait 30 or more days to find out how your food, beverage and labor costs are running. Your P&L will normally just confirm what you already know
Weekly Prime Cost Worksheets
Calculating prime cost every week is one of the profitable activities any restaurant can do. If prime cost is too high it's VERY difficult for any restaurant to generate a profit. Our weekly prime cost worksheets make it easy to track and control your biggest and most volatile costs.
SAMPLE: Full Service Bistro (Food and Beverage)
Restaurant operators that track their prime cost weekly routinely increase their bottom-line 2% - 5% or more! If you're serious about improving your profit - START USING THIS WORKSHEET TODAY!
This sample worksheet has been designed to efficiently capture sales, purchases, payroll and inventory information to generate one of the most valuable weekly reports in any food service operation.
Prime cost is composed of the two biggest and most volatile cost areas in any restaurant, food & beverage and labor cost. Having accurate, weekly feedback on prime cost is essential to keep management informed and focused on their biggest and most vulnerable cost control areas.
Keys to success in using this report:
Enter supplier purchases, hourly payroll and sales information daily.
Conduct an accurate physical inventory of all food and beverage items at the end of the week.
Commit to completing and reviewing the prime cost report the day after your week ends.
Summary of Features & Benefits:
The Prime Cost Worksheets are an integrated set of spreadsheets that will make it easier way to generate an accurate prime cost report. Shown here is only one sample for you to hve an idea of its formulation.
Other file contains worksheets to collect hourly employee hours and calculate hourly payroll cost every day.
Making the Prime Cost Report a part of your restaurant's weekly routine will make build awareness and accountability for the two most important cost areas in any restaurant.
Successful integration of a weekly Prime Cost Report discipline always results in lower food, beverage and labor costs often equivalent to 2% to 5% of sales.
If you're serious about improving your profitability – CONTACT US FOR MORE INFO & START USING THESE WORKSHEETS!
