Startup Accounting Services For Food Catering Business: How to Begin?
Turning your passion for food into a business endorsement is one of the best ideas you can ever invest in. With the right startup accounting services tagging along you can become an overnight success even (no joke!) and you can earn profit too. Even if you are toying with the idea of starting a food catering service, accounting still remains one of the most important aspects of the business to become successful.
A lot is involved in the food business from managing inventory to sales to counting the number of sales in a day or on a weekly basis and so on. Without the help of an accountant, you cannot manage things properly.
Since it’s a small business, you can take help from online accountants who charge nominal fees to accommodate your food catering business in the long run.
Understanding Restaurant Accounting Methods
To run a successful restaurant, it’s essential to have a grasp of accounting methods. Restaurant accounting involves keeping track of financial transactions like sales, purchases, and expenses to ensure your business stays profitable and financially secure.
The restaurant industry uses various accounting methods, including cash-based and accrual-based accounting. Cash-based accounting records transactions as cash is received or paid out, while accrual-based accounting records transactions as they occur, regardless of when the cash is received or paid out. Understanding these methods can help you make informed decisions about your restaurant’s finances, such as when to invest in new equipment, hire new staff, or adjust menu prices. By implementing effective accounting practices, you can set your restaurant up for long-term success. So if you’re a restaurant owner or manager, taking the time to understand accounting methods is essential.
Accounting Services For Startup: Food Catering Business
Before you get up and about running a food catering business even at a small level, you need to understand the language of hospitality finance.
A catering company, even as a moving food truck, provides food and beverage for private and corporate events. The task is to keep the guest well-fed with the selected menu of delicious food, drinks, and snacks. You can offer a customized menu as you will be responsible for planning the menu, hiring cooking and serving staff, and cooking and delivering the food to the desired location.
So within a limited budget, you can offer some of the following services for your catering business;
- Food Catering
- Beverage Services
- Bartending Services
- Hot Or Cold Buffet Setup
- Chair And Table Rentals
- Dining Area Set Up And So On
If you are sticking purely to food catering then it’s great. It’s the core of the catering business. You can offer full service and charge as per dollar need.
However, CPA fees for small business charges must be kept in mind when you plan to hire one to handle your accounts. So here’s what you need to remember.
Find The Bookkeeper
There are plenty of bookkeeping startups, like My Count Solutions, available online that assist small businesses just like yours. As the owner, you will face some challenges to run the business and manage the accounts on your own. Staffing, inventory management, and controlling the cost of the goods sold is a time taking tasks.
A Professional Bookkeeper understands the complexity of the food industry and therefore can manage the front and back house management.
A proper CPA Portal will help to streamline all the data entry tasks too. If you want to customize the invoices, track the revenue, and create profit or loss statements.
The ideal accounting software will let you report the documents and is easy to use and allows you to access the data online anytime you want.
Set Accounts Chart
You must be able to categorize the accounts to set the cash flows. The most common set includes the assets, liabilities, expenses revenues, and owner’s equity.
When you hire professional help even if it’s remote or online then they can break down the accounts into business-specific categories too like inventory and sales, marketing and advertising, and so on.
They can monitor the metrics rather easily.
Point Of Sale System
You want to manage your cash, and receipts, whether it’s via texts or emails. Even inventory management and ogre management need to be properly managed. When you get the hang of a bookkeeping startup they help you stay organized and put about all the related tasks.
Besides they also track the necessary factors like;
For the food business, it can be a daunting task to track the employee’s working hours. Work hours are irregular and different types of payment can be a hassle.
Paying vendors and suppliers on time is important. Updating the invoices on the accounting software is important to generate the payment schedule.
Given that money primarily comes from one source, tracking income is now easier than tracking expenses. This is so that different costs, such as rent, wholesalers, and other restaurant-related expenses, can be accounted for. Being organized in this area is essential necessary because disorganized bills and invoices are bad for business. For every busy restaurant, choosing restaurant accounting outsourcing is the ideal choice.
For a small food catering business, you optimize the inventory you buy and reduce food waste.
Saving the raw materials, and getting more customers means earning more jobs which ultimately would lead to more cash inflows.
Keep track of the expenses and the profits being made. That’s what startup accounting services are for. Thankfully, outsourcing has come a long way. The days when your waiter had to scribble down the orders on a piece of paper and tape it to the chef’s window are long gone. You can track sales, correctly organize them into custom tabs, and reconcile daily POS sales with books with the use of a solid outsourced platform.
Reconcile the bank accounts, loans, credit cards, and so on. You need to be accountable for everything.
Evaluate the food safety, quality, and management control too. The audit in the food industry is relevant not only to the profit and loss but to the high standard of food quality too.
The major players in restaurant accounting
Managing a restaurant can be a challenging task, and having a clear understanding of accounting methods is crucial for success. Here are three key points to keep in mind when it comes to restaurant accounting:
- Track your finances: As a restaurant owner or manager, you need to keep track of your financial transactions. This includes sales, expenses, and purchases. Tracking these transactions can help you understand how much money is coming in and going out of your business, allowing you to make informed decisions about your finances.
- Use the right accounting method: There are different accounting methods used in the restaurant industry, such as cash-based and accrual-based accounting. Choosing the right method for your business can help you manage your finances more effectively, whether it’s recording transactions as cash is received or paid out, or recording transactions as they occur.
- Plan for long-term success: Applying sound accounting principles is key to setting your restaurant up for long-term success. By keeping track of your finances, choosing the right accounting method, and making informed decisions about your business, you can ensure that your restaurant is financially stable and profitable.
In summary, managing restaurant accounting involves tracking finances, selecting the right accounting method, and planning for long-term success. By following these key points, you can effectively manage your restaurant’s finances and set your business up for success.
Restaurant bookkeeping to-do list
Utilize your Point-of-sale (POS) to record sales each day
You’ll need to start by learning how to keep track of your sales. Many people believe that outsourcing is a great approach to keeping track of everything for restaurants.
- Count the number of sales you make every day.
Create a separate sales entry for each day (not monthly or weekly). This is how you simulate the cash and credit card deposits at the restaurant’s bank. The majority of restaurants accept credit cards and allow daily bill payments. As a result, each batch’s credit card payment or deposit will have an individual influence on your bank account.
In order to set up your restaurant accounting services to accurately reflect this activity, you must look at how money is received in your bank account.
- Use the data you’ve acquired to create a sales report.
To keep track of your daily sales, you’ll need to put together a report. Most restaurant POS systems feature a daily sales overview. You’ll need to interact with your POS system if you want to modify the report to get more specific data.
- Keep a daily sales journal.
After receiving a sales report, start a daily sales notebook entry and a memorized purchase. It may also be possible to gain insight into how things are performing financially by comparing profit and loss to previous quarters and years. Restaurant financial reporting can make the difference between success and failure.
Benefit from accounting software
Whatever accounting software you choose, keep in mind that it needs to be customized, or at the very least, best suited for your company. As a result, you should be able to streamline data entry activities, personalize invoices, easily keep track of regular income and outgoings, and much more. Keep in mind that you should have access to your statements and data 24/7/365.
Making your own payroll increases your risk as a businessperson. If you record your payroll taxes incorrectly or late, you could incur significant fines and fees. You run a lot of dangers if you don’t outsource your payroll to an accounting company.
For assuring reliable and consistent pay and accounting, payroll outsourcing is a practical and cost-effective alternative. Payroll outsourcing for restaurants should be used by all small businesses.
Restaurant payroll preparation can be challenging due to inconsistent work schedules, numerous positions, and several payment types. The best way to automate the process is to outsource payroll or use payroll software.
Make an accounting chart
The accounting system needs to be well organized as we move on to the next step. Why does this matter? You must create an accounting chart. You must list the assets, liabilities, expenses, income, and capital of the owner on the chart. Even if it is not restricted to those groups, it is advisable to start at the bottom and add more precise groups as you move up. This will enable you to assess the company’s cash flows.
You are running your business blindly if you don’t employ financial statements in your restaurant accounting services. It’s crucial to regularly analyze your financial statistics due to the food industry’s razor-thin profitability.
Setting Accounting Goals for your restaurant business
As a restaurant owner, setting accounting goals is essential for your business’s financial success. Here are six key points to consider when setting accounting goals:
Improving tax reporting: for your restaurant business is crucial to avoid any legal or financial issues. To achieve this, you need to stay organized by keeping track of all your financial records, including receipts and other important documents. Knowing your tax obligations, such as sales tax, payroll tax, and income tax, is also crucial to meet them on time. Hiring a tax professional or using accounting software can help streamline your tax reporting and ensure that you’re meeting all your obligations. It’s also important to plan for the future by estimating your tax obligations, setting aside money for taxes, and being prepared for any tax-related changes that may impact your business. By following these key points, you can ensure that your business stays financially healthy and meets all its tax obligations.
Managing expenses: is an essential part of running a successful restaurant business. To do this effectively, you need to keep track of all your expenses, including food and beverage costs, rent, utilities, and payroll. One of the best ways to manage your expenses is to create a budget and stick to it. This will help you identify areas where you can cut costs and make adjustments to stay within your budget. Another important aspect of managing expenses is negotiating with vendors to get the best prices and deals. Additionally, using technology such as accounting software and POS systems can help streamline your expense management process and provide real-time data on your expenses. By managing your expenses effectively, you can improve your bottom line and ensure the financial health of your restaurant business.
Designing better menu pricing: is a crucial aspect of running a successful restaurant business. One of the key considerations when designing menu prices is understanding your food costs and overhead expenses. This will help you determine the minimum prices you need to charge to cover your costs and make a profit. Additionally, you can use techniques such as “psychological pricing” to make your prices more appealing to customers. This involves using prices that end in .99 or .95, which is proven to be more effective than round numbers. Another strategy is to offer menu items at different price points to cater to different customer budgets. You can also consider offering specials or promotions to attract customers and boost sales. By designing your menu pricing effectively, you can increase your profitability and attract more customers to your restaurant.
Achieving accurate staffing levels: is essential to ensure that your restaurant business runs smoothly and provides excellent customer service. One of the key considerations when determining staffing levels is to analyze historical sales data and forecast future sales. This will help you determine the number of staff needed during peak and non-peak times. Additionally, you can use tools such as scheduling software to help you create and manage staff schedules efficiently. It’s also important to train your staff effectively and cross-train them in different roles, which can help you manage staffing shortages and prevent disruptions in service. Moreover, regularly monitoring your staff performance and adjusting staffing levels accordingly can help you maintain optimal staffing levels. By achieving accurate staffing levels, you can ensure that your restaurant business provides excellent customer service, reduces labor costs, and improves overall profitability.
Having better control of your cash flow: is crucial to the success of your restaurant business. One of the first steps in managing cash flow is to monitor your income and expenses closely. This involves regularly reviewing your financial statements and identifying areas where you can cut costs or increase revenue. Additionally, it’s important to manage your inventory effectively and control your food and beverage costs, which can have a significant impact on your cash flow. Implementing effective payment and credit policies can also help you manage your cash flow more efficiently. This includes collecting payment from customers promptly and setting clear payment terms for suppliers. Moreover, using tools such as accounting software and cash flow forecasting can help you predict and manage your cash flow effectively. By having better control of your cash flow, you can improve the financial health of your restaurant business, reduce financial stress, and position yourself for long-term success.
Let the Accounting Services Cook your Books!
The success of the catering business does not only rely on your passion, management, and taste of the food you serve but also on how well-managed your books are. Only then you will be able to expand and grow your food catering business if you can keep a close eye on the cash inflows and outflows.
CPA fees for small businesses will vary based on different factors but rest assured My Count Solutions is the perfect solution for sore eyes looking for a service provider who is ideal in bookkeeping and accounting services.
You can contact us and learn how My Count Solutions can help grow your catering business toward success.