Accounting is difficult, time-consuming, and frustrating. It’s also one of the most important parts of a successful restaurant. Fortunately for small business owners, advanced Point of Sale technology makes the job simple, faster, and more accurate to save you time, money, and a lot of headaches.
The Basics of Accounting
First, understand some common terms that come up in every accounting period. Knowing how to categorize and refer to various costs or equipment tells you how the business is doing so you can make an accurate budget for the following term.
Balance Sheet
This lists everything in your restaurant that you have to work with. It includes assets, or whatever you own with value. These can be either short-term assets, like ingredients, or long-term equipment. Your inventory is the most valuable asset since it’s the driving force behind restaurant revenue.
Balance sheets also list liabilities, which is money owed like loans, rent or taxes. Accounts payable, a common liability, is whatever you owe to creditors or suppliers.
Income Statement
This tells you what you need to know about your net income. It will detail profits and losses by looking at a few different factors. Revenue describes what you make before operational costs, whereas profit is the total amount you get to take home. Expenses are everything you pay to operate and can range from labor costs to inventory to rent.
When looking at revenue and expenses, you’re ultimately trying to figure out net income—how much you’re actually taking home at the end of the day. To do that, first, you need to break down all of your costs and subtract them from your total revenue.
COGS, or the “cost of goods sold,” is how much it costs to make everything you sell at your restaurant. This typically means ingredients and includes whatever else you sell there, such as t-shirt merch or drinks. Typically, a third of a restaurant’s revenue goes toward paying off COGS.
Prime costs are the direct cost of production, including labor costs. On average, this should hover between 55-65% of your food and beverage sales. The prime cost helps determine how to price your menu effectively because you know what effect this variable will have on your budget.
Make accounting easier with software designed to streamline labor costs and reduce your manual input, which ultimately eases some of your workloads. eatOS is integrated with 7Shifts which allows you to create streamlined employee schedules in much less time, with analytic capabilities to tell you when traffic is usually slow or overwhelming, so you don’t over-or understaff again. Your employees can trade shifts online and without managerial approval for their convenience and to free up supervisors’ time, as well. 7Shifts software cuts down on a lot of otherwise hard-to-control labor costs. eatOS also integrates with Gusto accounting software to automatically run payroll with more speed and accuracy than manually inputting all that data.
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These benefits come with state-of-the-art Point of Sales built to grow with your business. When you upgrade your POS system, you cut down on unnecessary expenses and generate more profit with increased flexibility, communication, and customer loyalty.
