One of the mistakes I see
when I take on a new client is that their books are not set up properly.
By books, I mean their accounting.
I'm going to share with you the proper way to set up your books,
so you can get the numbers you need to explode the sales and profits
in your restaurant.
Hey, everybody. My name is Ryan Gromfin. I'm an author, speaker, chef, restaurateur,
and I'm the founder of TheRestaurantBoss.com,
as well as RestaurantProfitAndPerformance.com
And like I said earlier, today, I'm going to talk to you about some really,
really important stuff. It may not be the sexiest and the most fun,
you know usually these videos are about increasing your sales and getting more profits,
and you know better management, but today's a little drier.
It's about accounting and it's particularly about making sure that
three very important accounts that you have set up and whatever software you use
all match and that's going to be some kind of an income or sales account,
your expense or cost of goods sold account, and your inventory.
You know I see a lot of times in restaurants
where their income accounts or their sales accounts
look something like restaurant, patio, catering,
banquets something like that,
but then their costs of goods sold or one of their expense accounts looks like
food, beverage, beer,wine,
inventory accounts if you even have them are usually all over the place.
So, in the next couple of minutes,
we're going to jump inside my computer and I'm going to show you how
you should set up your accounts.
If you don't do the accounting yourself, forward this video to your bookkeeper.
Make sure that they have your restaurant accounts set up this way,
it's the only way you're going to get accurate numbers.
Let's jump inside my computer and I'll show you exactly what I mean.
All right. So welcome inside of my computer,
so very quickly I just want to kind of show you how to build the accounts
and whatever accounting software that you use.
I like to call these categories and then the one thing you want to make sure is whatever
categories you make here,
again you want to make sure that your income or your sales accounts,
your purchases also known as your cost of goods sold accounts,
and your inventory accounts all match the same set up.
So, everybody's going to start with a cost of goods sold.
If you only track one thing in your restaurant,
it's going to be cost of goods sold,
but a lot people like to track food and beverage,
so then your accounts are going to look something like this
where you're goingto have a master account as your cost of goods sold and underneath it,
you're going to have a food and beverage account,
but then some people like to track more stuff,
some people like to track beer, wine, liquor.
I prefer to track beer draft and beer bottled as well as
wine and liquor.
Now, this could nest under your beverage or
what some people like to do is, I'll just type in here.
Some people like to track a non-alcoholic beverage account,
and then let me just move that
right there,
so then you can see, now you have your food,
your non-alcoholic beverage which would be like sodas, milk, juice,
coffee, and then you have your draft beer - your
bottle beer, your wine, and your liquor.
This is exactly how I like to set up accounts assuming
you sell all this stuff, and then like I said, these would be your income,
your cost of goods sold, your expense accounts
as well as your inventory accounts.
Now another thing that some people like to do, some people sell
merchandise in their restaurants, so then that would go…
that would go out to this level here
because it's under cost of goods sold,
but it's not under food or non-alcoholic beverage or beverage,
it's its own category. That's another thing.
Sometimes like if you sell cigarettes or
paraphernalia like a hats and shirts and
you know beer mugs,
whatever. If you're more of like a novelty type shop,
so that's kind of the first step. Again, making sure that your
sales accounts, your income… I'm sorry!
Your income or sales accounts, your expense or cost of goods sold accounts
and your inventory accounts all match,
because imagine if you had these as your cost of goods sold,
as your purchases accounts,
but then you had restaurant and catering
as your income account,
where would restaurant go? How would you know what your food cost is?
Let me explain that to you a little bit further.
You have to compare food purchases to food sales in order to get food costs,
but if you don't know what your food sales are if you only know what your
total restaurant sales are,
you have no number to compare that to.
So that means that when you enter in your sales for the day,
you have to break it down into these exact same categories which means
that these exact same categories set up exactly the same way
need to be in your POS system or your cash registers,
so you can extract that data in the exact same manner.
Now the last part, the most complicated part to this is when you
order your food and stuff,
you have to breakdown your invoices.
You know, draft beer, bottle beer, wine, liquor - that's pretty easy
to break down on an invoice,
things you have to be careful of though is like you might order cocktail napkins and straws
from your bar vendor,
your bar supplier. Those probably don't go into
your beer cost.
Those would go into a direct operating expense,
totally different, another conversation.
Same thing like your broad line distributor
no matter who it is who you order a majority of your product from,
you may order mostly food from them, but it's not only food,
so you have to go through each invoice and make sure that when you enter your food purchases,
you may have $1,000 invoice from your broad line,
but maybe only $750 of that is food,
$200 of it might be chemicals, and $50 of it might be paper.
Anyways. I hope this was helpful.
Hey, folks. I hope that was helpful.
Also, I just gave you a sneak peek into something that I am extraordinarily
proud of.
For the last couple months, I've been developing some software and you
are the first people who have ever seen that. It's not even released yet;
it's not quite done. Well, depending on when you're watching this video,
it might totally be done and I'll have an update below this video to let you know,
but if you're watching this video live like right when I sent it out to you the day I posted it,
it's not quite ready but it's close.
There'll be a button below if you're watching this video on YouTube,
there'll be a link come on back to my website and on my website,
there'll be a button that you can either learn more about the software
if it's live and ready to go,
or I'm looking for some beta testers who want to really
help me develop this into the perfect restaurant accounting software,
cost control counting software for your business.
And there'll be a button or a form that you could fill out to potentially be one of those beta
testers for me. But anyways,
if you love this video no matter where you are, if you're on YouTube,
go ahead and subscribe and like it. If you're on my website,
there's a little blue button below this video.
Go ahead and smash that button.
There's also a comment section. Wherever you're watching this from,
please go ahead ask some questions,
leave some comments. I reply to all of those within 24 hours, I promise.
My name is Ryan Gromfin.
I'm with the Restaurant Boss, as well as RestaurantProfitAndPerformance.com
I hope you have a wonderful day.
Quickly the last thing is, I'm able to produce these videos at no charge for you
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let the world know how awesome these videos are,
all of your friends in the restaurant business. I really appreciate it.
Have a wonderful day.