Running a restaurant means keeping up with a lot of things, including inventory, employees and costs. Many financial aspects of running a food service establishment are tracked using a financial reporting platform for restaurants. These reports can be helpful in several ways, and reporting can be the difference between catching problems early and addressing them too late. Gain financial clarity: experience our financial reporting platform for restaurants! https://www.superorder.com/financial-management
Below are three financial reports you should track if you run a restaurant:
1. Profit and Loss
A profit and loss report is one of the most vital for restaurateurs. This report, often generated using a financial reporting platform for restaurants, tracks how much money a restaurant has made above its operating costs or how much it has lost.
The reason this report is vital is because it shows how successful the restaurant is in a given period. If profits are minimal but revenue sustains operations, the restaurant is breaking even. If losses outnumber profits or eat into revenue, this can indicate that changes need to be made somewhere in the restaurant's operating structure.
2. Balance Sheet
A balance sheet is a financial report that details the assets and liabilities of a restaurant. An asset will be anything of value that is owned by the restaurant, and this can include everything from equipment to cash.
A liability is anything that the restaurant owes money on. An example of a liability in the food service industry may be a loan for a new oven. These are not considered losses, despite being costs, because the restaurant has not technically lost money on the purchase.
3. Cash Flow Report
A cash flow report documents all the money coming into and going out of the restaurant, regardless of whether that money is considered revenue, profit, investment capital, purchases or loan payments. Analyzing a cash flow report can help a restaurateur get a better sense of balance in how the establishment is operating. Too much cash flow in one direction can signal a need for change in how finances are managed.
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