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RESTAURANT ACCOUNTING Mower & Associates, CPA 1833 S Millennium Way Suite 100 Meridian, ID 83642 (208)342-5905

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Presentation on theme: "RESTAURANT ACCOUNTING Mower & Associates, CPA 1833 S Millennium Way Suite 100 Meridian, ID 83642 (208)342-5905"— Presentation transcript:

1 RESTAURANT ACCOUNTING Mower & Associates, CPA 1833 S Millennium Way Suite 100 Meridian, ID 83642 (208)342-5905

2 Mower & Associates, CPA 1833 S Millennium Way Suite 100 Meridian, ID 83642 (208)342-5905 Mower & Associates is focused on increasing restaurant profitability. M&A offers management solutions for single and multi-unit restaurants. M&A takes responsibility for payroll, accounts payable, financial reporting and tax preparation off your plate. Plus, you have electronic access to restaurant-specific spreadsheets and forms. We personally help you analyze your reports to find more profit. Give us your data from anywhere around the U.S. and we will help your restaurant prosper.

3 MORE CONTROL MORE PROFIT CONTROL POTENIAL PROFIT IMPACT Weekly P&L2% Purchasing and Receiving1% Costing the Menu2% Menu Engineering1% Perpetual Inventory Controls1% Scheduling and Motivation Techniques2% Bar Controls1% Reducing General Expenses1% Installing computerized POS System3% Employee Incentive Programs1% Fraud Detection1% Preliminary Profit Impact16% Less Additional Costs-2% Net Profit Impact14%

4 ATTENTION TO DETAIL HIGHER PROFITS In a restaurant grossing $2.5 million, if each server sold two more desserts per night, profit would improve 43%. In a restaurant with $500,000 in sales, if every employee comes in ¼ hour later, savings would be $10,000 per year. A steak house with a 4% profit, can double profit to 8%, with careful cutting of meat. A pizza restaurant doing $3 million in sales, can save $80,000 by accurately weighting each cheese portion.

5 Mower & Associates Restaurant CPA FINANCIAL STATEMENTS TOOLS for PROFIT BALANCE SHEET Summarizes Assets, Payables and Net Worth Key accounts on balance sheet Cash - must agree with bank balance Inventory - must agree with physical inventory count Payables - if there are no payables, the balance sheet and P&L are wrong STATEMENT OF PROFIT OR LOSS This statement shows Sales, Expenses, and Profits Use accrual accounting not cash accounting

6 Mower & Associates Restaurant CPA QUALITY FINANCIAL STATEMENTS Who BEST prepares restaurant financial statements & tax returns? CPA firm specializing in restaurants Bookkeeper Any CPA Firm Common Problems with Restaurant Statements None Restaurant Chart of Accounts Cash rather than accrual accounting Unorganized detail No interest on P&L, but loans on balance sheet No physical inventory adjustments Sales tax reporting errors

7 Mower & Associates Paul Mower Restaurant CPA Review of Profit and Loss Statements WE ASK A LOT OF QUESTIONS ABOUT: SALES COST OF GOODS SOLD LABOR GENERAL EXPENSES CASH FLOW

8 Restaurant Owner and Paul Mower, CPA Compare and Measure Sales Comparisons This Week to Last Week This Week to Same Week Last Year Compare to other Restaurants Sales per square foot Trends Customer Count Average Guest Check

9 Mower & Associates BREAKEVEN SALES Step 1 Add up Fixed Costs Step 2 Add up Variable Costs Step 3 Calculate Breakeven Sales

10 Mower & Associates Breakeven Computation

11 COST OF GOODS SOLD If Cost of Goods are high, check for: Spoilage and Waste Purchase and Receiving Shortages Employee Theft Under reported Sales Calculate exact foods costs each period (weekly) Food cost occurs when the food is used, not when the food bill is paid Step 1 Count merchandise received during the period Step 2 Count inventory Step 3 If inventory increases, subtract the increase from purchases If inventory decreases, add the decrease to purchases Example Purchases $4,000 Inventory Decrease 500 COGS $4,500

12 Restaurant Owner and Paul Mower, CPA Review Labor Costs Factors that Affect Labor Costs Sales Type of Restaurant Capability of employees Analyzing Costs Compare labor costs to other restaurants Review labor on a daily basis Set goals for labor costs Labor Schedule based on Hourly Customer Count

13 Mower & Associates DAILY LABOR SCHEDULE HOURS Customer Count MGRMGR CHEFCHEF COOKCOOK PANTRYPANTRY HOSTESSHOSTESS WASHERWASHER SERVERSERVER SERVERSERVER SERVERSERVER BUSBUS BARBAR BARBAR BARSERVERBARSERVER 9:00 10:001 11:006 12:0023 1:005 2:00 3:00 4:003 5:0012 6:0030 7:008 8:003 9:001 10:001 11:00 Count93 Hours114998191211959886


15 THE MENU Menu Costing Menu Pricing Menu Engineering

16 MENU COSTING Steak Dinner Item IngredientUnit Unit Price Portion Cost per Portion SteakOunce0.9610 oz $ 9.60 VegetableLbs.0.963 oz $ 0.18 Baked PotatoEach0.121 $ 0.12 Sour CreamQuart1.254 oz $ 0.16 ButterPound1.612 oz $ 0.20 PLATE COST $ 10.26

17 MENU PRICING Three ways to price a menu Compare to competitors Food cost percentage for target profit Add profit, overhead and food cost for each item

18 MENU ENGINEERING Rate each menu item APopular and Profitable BPopular Only CProfitable Only DUnpopular and Unprofitable Based on Rating Eliminate items Change the price of items Refocus the menu placement Change the way the items are prepared Add new items to revitalize the menu

19 Mower & Associates Menu Engineering Menu Engineering Description % Total Total Menu Items Sold Food Cost Selling Price Per Menu Gross Profit Per Item Total Food Cost Total Menu Sales Gross Profit $ Food Cost % Popular Rating Profit Rating Overall Rating Column ABCDEFGH (C-B)(A x B)(A x C)(F-E)(E / F) New York Steak17%200717101,4003,4002,00041%AAA Fajita19%18531075551,8501,29530%AAA Seafood fettuccini10%95515104751,42595033%ABB+ Sirloin9%8541393401,10576531%BBB Roasted chicken7%653131019584565023%BBC+ Eggplant7%70412828084056033%BBB Shrimp7%65513832584552038%CCC Salmon5%455161122572049531%CCC Fish & Chips7%6829713661247622%CCC+ Radiatore Pasta8%7839623470246833%CCC+ Snow Crab3%25513812532520038%DDD Seared Venison1%7122210841547055%DDD Hamburger2%20132 604033%DDD Total100%1008 439412883848934% Average 78 653

20 Value for your $ Mower & Associates, CPA 1833 S Millennium Way Suite 100 Meridian, ID 83642 (208)342-5905 Paul Mower Restaurant CPA

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