Let’s be honest, when starting a new restaurant or café, owners are excited about the colour schemes, developing their menu and ensuring they have great staff and chefs. However, the thought of how they will handle their bookkeeping or setting up their financials brings anxiety to most and in many cases is the last thing they think about, pushing the thought right back and hoping for the best.
The truth is, you can have a great menu sourced from great providers and cooked by the best chef and served by smiling waiters, however if you don’t have your accounting system operational, how is a business owner meant to pay their suppliers, pay their staff and record their sales.
The hospitality industry is a tough market, ever changing and with tight margins, so ensuring you are measuring what is working and what is not, is critical to a businesses success. Ensuring that a business owner remains agile in their decision making allows for them to pivot with trends, seasonality and staffing requirements.
Every decision you make will have an impact to your bottom line, so it is critical business owners measure and know what their bottom line is.
So how can Omnia help you setup for success? Here are some golden nuggets on how to have not only a top place to eat, but also a successfully measured business.
Payroll
This is by far the most important component of running your hospitality business. You can have the best produce and a fully booked premise, but if you don’t have engaged and happy employees to cook the food, make the coffees and serve the dishes you have a recipe for disaster.
Payroll can be one of the most complicated components of running a business. We look into this topic more in-depth in our Payroll Blog but the hospitality award is one of the most complex awards with earnings based on time of day, time of week and length of shift, it is easy to get it wrong. On top of that, accruing of benefits such as leave can cause any business owner to run scared.
Having the right time management software tracking employee hours and a great accounting and payroll system which can interpret this information goes a long way towards making life easier. The team at Omnia can help you choose the right software for you and ensure that staff remain engaged and cooking those delicious dishes.
Managing your cashflow
Let’s be honest – cash is still king! You may be operating the latest credit card facilities but business owners need to know their cash position and ensure they are meeting their obligations such as payroll, supplier invoices, GST & PAYG payments and superannuation.
Maintaining up to date records in an accounting software, allows you to quickly and concisely look at your incoming and outgoing cash, and pivot decisions to best suit the business. Good software allows you to run profit & loss reports showing your performance, balance sheets to show your position and cashflow forecasting to show how you are tracking with cash.
Ensuring you maintain a separate bank account for your statutory obligations such as BAS, PAYG and superannuation is a great way of ensuring you are meeting your Australian Tax Office obligations and don’t fall short when these are due.
Recording your income
Most accounting software allows you to record your revenue and give you reports on how the business is tracking. However, best practice suggests you should have a specific point-of-sale software which allows you to track your revenue by type and allow you to understand what is successful and what can be changed.
It is important to remember that this detailed information is not required in your financials or accounting application but many modern third party applications have great integrations into the accounting software to allow for drill through analysis of your financials.
Although statistics show that we are transitioning into a cashless society it is still very important businesses have a robust cash management process for collecting and depositing cash and also ensure it is recorded correctly in your accounting software.
Paying your suppliers
Capturing your supplier bills in your accounting software is critical to ensure you are managing your cashflow. Furthermore, it is important so that you claim correct GST credits. In the hospitality industry they is a large amount of taxable and tax free purchases which need to be correctly captured and reported to the ATO via the Business Activity Statement.
The latest accounting software also allows you to capture a copy of a suppliers bill or receipt directly into the system. Giving you the ability to maintain great record management and access to the information in the future. We have found many business owners in the hospitality industry ask themselves how much they paid for product twelve months ago and by maintaining this record you can easily access the information.
Maintaining this information in your accounting software also allows you to work your cashflow and understand when supplier payments are due and how to take advantage of discounts that some suppliers may provide for early payments.
Helping your accountant
Each year businesses must comply with their tax obligations and lodge their annual tax returns. Gone are the days of handing over a shoe box full of receipts, invoices and point-of-sale stubs to your accountant and letting them spend weeks capturing and preparing your returns.
Maintaining your books in a timely manner and ensuring that all your statutory obligations are reported and met, goes a long way towards streamlining your end of year financial reporting and lodgements. Furthermore, keeping records of substantiating bills and receipts will allow for your accountant to quickly and concisely find information within your accounting system.
So now that we have covered the hot topics of bookkeeping and accounting for your hospitality venture there is no need to stress about the dreaded word, bookkeeping or compliance. The team at Omnia Business Solutions can set you up with effective accounting software and manage all your bookkeeping and accounting needs. Leaving you to continue to develop those tantalising dishes, and keeping your clients smiling.