I talk about profitability a lot – because you’re in business to make money, not be a charity. Knowing your numbers and understanding your financial reports are a big part of being profitable. So, in this video tip, I’m going to talk about the three financial reports you must understand and review every single month if you want to make money in your restaurant. 📖 I wrote a book for restaurant owners and managers:
🔔 Be sure to subscribe to this channel to get alerts when I post a new tip:
📚 Want some easy solutions for cutting food cost in your restaurant? Download my free report:
**********************************
Welcome to my YouTube Channel. I am David Scott Peters, a restaurant coach and speaker who teaches restaurant operators how to cut costs and increase profits with my trademark Restaurant Prosperity Formula. Known as THE expert in the restaurant industry, I apply my no-BS style to teach and motivate restaurant owners to take control of their businesses and finally realize their full potential. Thousands of restaurants have used my formula to transform their businesses. To learn more about me and the online courses I provide, visit
**********************************
About Restaurant Restaurant Financial Reports...
I talk about numbers numbers numbers numbers, right? I'm a numbers geek, and I talk about the systems restaurant’s should put in place to make money. I talk about getting your life back and putting a management team in place. Here's the deal: that which we measure improves and the only way to improve is to have measurements in the first place. There are three financial reports that are a must have to give you every opportunity to make the money you deserve.
**********************************
What Are Restaurant Financial Reports?
The three financial reports you must have in your restaurant are:
a balance sheet
a profit and loss statement
a cash flow report
A balance sheet is stuff and who owns the stuff? When you're working with your accountant, make sure they tie out every one of those accounts and reconcile those balance sheet accounts assets and liabilities. And when they do so, if they do that on a monthly basis, whatever your profit and loss number is it is 100 percent accurate.
Are you working with a CPA or an accountant that is tying those books out each month? If not, you're paying for it with extra time and money at the end of the year when they do your taxes and then do that same process.
The profit and loss (the P&L) is your report card. It tells you if you did a good job running your business, which means every line item in your chart of accounts needs to be detailed. Every position should be split out so you can measure every line item on your chart of accounts? This is something to communicate to your CPA or bookkeeper so that when you look at that number, you know what goes into it. If you don't have a good P&L, how do you know whether you're operating properly?
Last but not least, the most important report is a cash flow report. I'm not talking about that crappy cash flow report most accounting software gives you. That's a rearview mirror perspective that tells you how you did the last month. It’s where you started with cash and where you ended. No, I'm talking about putting together a 52-period cash flow report starting every single month, reconciling where your checking account is and putting where your accounts payable is and what your target cost of goods sold is going to be, where your sales are. You want detail so that you can see on week 34, because sales are low and you're in your lowest part of your season, that you're going to need $7,000 in your bank account that you can operate even if you operate perfectly.
Cash flow is incredibly important. I always ask people: what pays your bills cash or profits? The answer is cash. Last time I checked, I can't go to the power company with a case of stakes, drop them on the counter – THUD – and say, “There, we’re even.” So, if you want to control your business, you must know your financial reports, especially your balance sheet, profit and loss statement and your cash flow report.
**********************************
**********************************
Find more about how to run a restaurant business on my other platforms:
👍 Facebook:
📸 Instagram:
📱 Twitter:
🔔 Subscribe to YouTube:
0 Comments