Best Practices for Data-Driven Restaurants eBook
Your accounting system should propel you forward, not just look backward.
As your restaurant or franchise grows in size and complexity, you start finding that your old accounting system which worked fine in the past starts holding you back. Manual processes and lack of
visibility into your locations as well as across the entire business hinders continued growth.
You have abundant financial and operational data that flows into the business from multiple streams – point of sale, reservations, scheduling systems, just to name a few. A powerful benefit of a cloud accounting system lies in integrations with bestin- class systems to turn that data into insights efficiently and accurately. Those reports that used to take hours? Done, in minutes. Consolidations for your entities that used to take weeks? Automated, in real time.
The right accounting software minimizes the manual work in getting the insights you need, so you can spend more time driving profitability and growth.
Stay On Top of Prime Costs to Maximize Profits
In a traditionally slim margin industry, restaurants are challenged with keeping a close eye on their prime costs.
Prime costs are a large expense area, on average making up 61.3% of sales1. You want to keep them from growing too high, but if they are too low, they could indicate poor quality or service. Staying in control of your prime costs starts with consistently and routinely monitoring them.
Get Granular Insights Into Your COGS
You need insight into how each food and beverage category is behaving compared to budget or a prior period in order to identify problem areas and plan an approach. Give COGS a spot on your dashboard. Next, track your food and beverage items as dimensions so you’re able to drill down into the details of each.
Viewing COGS in this way can indicate problem areas to investigate. If the cost of an item is too high compared to budget, is it time to renegotiate or switch vendors? If the cost of an item is higher than normal compared to sales, could it be that employees are inaccurately measuring ingredients and more training is needed? Or could it be that menu items are priced too low? Taking corrective action starts with precise insights.
Best practices for tracking COGS:
- View COGS as a performance card metric on your dashboard
- Leverage dimensions to slice and dice your inventory data for maximum visibility and impact
- Automate accounts payable invoice processes to eliminate time-consuming, error-prone tasks – and get real-time insights into your food costs
View Labor Costs With Full Context
Labor costs, which include wages, recruitment, taxes, and benefits, are typically presented as a percentage of sales. While labor cost targets and their management will look different in each restaurant, there are ways to leverage a flexible cloud accounting system to control this area of prime costs.
Assign staff categories, such as hosts, servers, kitchen staff, and management to reporting dimensions so you can easily see what is driving your costs. Drilling into those dimensions, you can generate labor reports that indicate whether the restaurant is being staffed at the right levels at the right times of day, so you can course correct if needed.
Best practices for tracking labor costs:
- Keep labor costs within line of sight on your dashboard
- Assign staff categories to dimensions to easily generate labor reports for a deeper view
- Optimize scheduling with scheduling apps in order to manage your labor costs, and integrate them with your cloud financial management system so that you can run labor reports in real-time
Improve visibility and save time
When there are multiple instances of an accounting software for entities, hours of data manipulation between spreadsheets and the system, and days of consolidations to roll up those financial results, the business is making decisions based on stale information.
Create detailed custom reports in minutes
Custom reporting that meets the exact requirements of each entity can be available in minutes, thanks to dimensional drilldowns. Reports displaying dimensions enable a deeper understanding of performance drivers at your restaurant. For example, drill down into the sales by location, employee, or menu item within a food & beverage report. If a menu item is not selling well, you can compare its
sales to its costs in the prime cost report. With combined insights on the item’s sales and costs, you’ll be able to make the informed decision on whether you should stop selling the item or decrease the price to sell more.
Stakeholders throughout the company should be empowered to create and use reports that they need. Sage Intacct report creator tools are user-friendly enough that anyone from the staff accountant to the CFO can create role-based dashboards and financial reports within minutes, so there can be higher frequency and accuracy in reporting.
Conclusion: Evolve Into a Key Strategic Partner of the Business
Your restaurant has an abundance of operational and financial data. The right cloud accounting system enables you to quickly harness that data so you can make proactive management decisions, by bringing:
- Flexible & custom reporting that fit your needs. Use custom financial and operational dashboards based on a dimensional GL structure so you can make data-driven decisions, easily.
- Accuracy & speed with automation. Automate the ongoing finance tasks like financial consolidations so they take minutes, not weeks.
- Real-time visibility across systems. Integrate your restaurant systems so you can effortlessly maintain a current, holistic financial view all in one place.
Sage Intacct enables restaurants to operate on strategic insights through access to real-time information instead of backward-looking data. Dimensional reporting drills into the most granular detail, and can also instantly roll up multiple entities for a complete, strategic view of company performance.