How Food and Beverage Accounting Principles Will Increase Profits
Restaurants, pubs, and eateries, and any business that serves food and beverages, are always tricky places to do accounting. There are many reasons why food and beverages are difficult to track: they are consumable, food and beverages can spoil, and orders can be returned to the kitchen by customers. Food and beverage accounting principles can help to prevent financial losses for your establishment. If you follow these simple pieces of advice your business can improve its accounting, and hopefully increase profits.
Conduct Menu Engineering
Before you open your establishment or consider introducing a new menu item, you should conduct some menu engineering. This involves analyzing how many meals a certain amount of food can make, and determining the price that a customer will pay for an item. Menu engineering also determines an item’s popularity, and therefore, its profitability. This is the start of quantifying and controlling food and beverage for accounting purposes.
Use Standardized Recipes
The use of standardized recipes that are followed by everyone in the kitchen is the next step in food and beverage accounting. You need to make sure that your food inventory will make a certain number of meals, and your beverages are poured to a common standard. All employees should be trained to follow these guidelines. When they don’t, your business is losing money and profit.
Track Sales Carefully
All of your staff that deals with ringing in meals, customer payments, and cashing out cash registers should be trained to do so properly and diligently. Proper training can prevent many errors at the till that can throw off inventory and skew your accounting numbers. Make sure that everyone is well versed in how to use the register and your food and beverage accounting will be so much simpler.
Strict Purchasing Guidelines
Everyone in your establishment should be aware of and adhere to strict purchasing guidelines in order to establish effective food and beverage accounting. There should be one person designated to make purchases for the business, and he or she should be informed of inventory counts so that he or she can place orders. This prevents over ordering and food spoilage, which cause eateries a lot of money! Prevent this by putting a procedure in place before ordering and purchasing becomes an issue for you.
Have Effective Inventory Management
Effective inventory practices are essential to proper food and beverage accounting. You should create inventory sheets and an inventory policy that guides employees as to how often they should conduct inventories, and how they should be conducted. Inventories can aid with ordering the necessary amount of supplies, and also with determining if standardized recipes are being followed.
Food and beverage accounting is essential to the success of any eatery. You need to do menu engineering to determine the profitability and costs of individual items, and you need strict recipe inventory and purchasing guidelines to make sure food orders are being used to their full potential. If you own a restaurant, pub, or bar, it’s extremely important that you implement the suggestions detailed above to improve your food and beverage accounting practices.
Miller Kaplan Arase LLP, a full-service public accounting firm in Los Angeles, dedicated to providing accounting, auditing, business management, tax and advisory services for food and beverage, entertainment, retail, real estate businesses, tax-exempt organizations, and individuals across the US.
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