Unlike a Fine Wine, Your Numbers Don't Get Better With Age (members ed.)
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February 6, 2007 - Jim Laube, president, RestaurantOwner.com
One of the most striking differences between independent restaurants and chain operations is the sense of urgency they place on getting their financial information. Chain operators realize the importance of getting super quick feedback on how their restaurants perform and get their monthly or 4-week financials completed within 5-7 days, many even sooner.
Most independents on the other hand seem to have no problem with getting this information weeks (and even months) after the end of the period. In working with literally hundreds of independent operators, I've noticed there is a direct correlation between the amount of time it takes an operator to get his or her monthly (or 4 week) financials and how profitable the restaurant is.
Operators who place a high priority on getting their numbers quickly, within 7 days after the end of each reporting period, nearly always make more money than those who allow this process to take longer.
If you're waiting longer than 7-10 days to see your financial results here are some ideas to speed up the process so you can learn about and react to problems and opportunities in a more timely manner.
1. Make fast turnaround of your financial reports a priority. You’re the boss, so if you want your financials faster, you’ve got to set the standard. Unless you push them, managers, bookkeepers and accountants don’t naturally perform at peak efficiency in this area.
2. Get organized. Meet with everyone who is involved in your accounting process to discuss how it could be reorganized to be more streamlined and efficient. Identify all the activities and steps involved in preparing your financials and who’s responsible for each function.
3. Get online access to your bank transactions. Your accountant won’t have to wait to get the bank statement in the mail to begin preparing the bank reconciliation. (this nixes a popular excuse for being slow)
4. Process your invoices, manual checks and sales reports daily. Don’t wait until the end of the week or month.
5. Tie a portion of management compensation to financial results. This usually causes managers to be much more interested in your restaurant's financial performance and motivates them to be a positive force in seeing that the financial statements are completed in a timely manner.
Author: Jim Laube
Jim Laube is the President of RestaurantOwner.com, an online resource center for independent restaurant operators. For more information visit www.RestaurantOwner.com.