Proven Accounting System or the lack thereof.
To understand restaurant financials and management accounts you have to have a proven accounting system in place. Most owners know how to run a kitchen, but they have no idea how the accounting side of the business works.
Hiring an accountant to handle all of the systems is a smart choice, many companies will rely on DIY solutions, such as QuickBooks, to mention one of many, for all of their accounting. The problem is that the owner should manage their business based on their up-to-date management accounts.
An accounting system requires to:
- Be compliant by law.
- Simple and easy to use by the owner.
- Easy reporting.
- Update on a daily basis.
- Follow industry standards.
- Identify other red flags.
There is enough software and cloud-based solutions available to make the entire accounting system easy to set up. Owners should work with an accountant and get professional accounting help as needed.
The right accounting system is imperative.
This ensures that the owner has a better grasp of the establishment’s actual financials with financial controls to be implemented in order to better manage their business. The problems that could be faced by a business owner are numerous and we can author a book on the subject, this shows the importance of the choice faced when choosing the accounting system to suit the needs of the business and its owner.
Once you present proper financial reports on your business and you make it easy for your broker to market and offer your business for sale, you will find the right buyer for your business and facilitate a successful sale so much easier.
Every restaurant owner that I know in a career spanning 30 plus years has definitely not been a born administrator and or hiding undeveloped accounting skills. We thrive on managed chaos at the best of times and therefore choosing the correct accounting system is one of those few structured measures to ensure you are not sailing in a leaking boat.