In general, it can be notoriously difficult to run your own business, but that can be doubly so when it comes to running a restaurant. You have to balance day-to-day management of front of house operations with back of house matters. Plus, you have to keep track of finances to ensure that your business is successful.
How to manage your restaurant’s financial picture
The key to staying on top of your financial picture is relying on two things on a monthly basis: a profit and loss statement and a restaurant balance sheet.
Profit and loss statement
A profit and loss statement shows the performance of your restaurant, weighing expenses, sales, cost of products/ingredients, and so on. On a profit and loss statement, you can see how many food items you sold, how much money was earned from those sales, how much you had to spend on the ingredients to make those items, how much you had to pay those working shifts for you, and other generalized expenses.
Profit and loss statements should be generated for each month and quarter, along with an annual profit and loss statement around the start of each new year.
Restaurant balance sheet
A restaurant balance sheet template can help you make sense of the facts on the profit and loss statement. A balance sheet will help you verify that all of the information on the profit and loss statement is accurate and is the best thing to refer to on a regular basis.
What's on a restaurant balance sheet? You'll find three main categories:
1. Assets: Your appliances, cookware, inventory, cash on hand, etc.
2. Liabilities: Debts to vendors or related to property leases and outstanding business loans
3. Equity: Also known as "retained earnings," basically, your "take home" after subtracting liabilities from assets
How to manage a restaurant balance sheet
How can you make your own restaurant balance sheet? You can easily find a sample, like the one at the bottom of this page, and download it to use as a restaurant balance sheet template.
To break down what you need, a restaurant balance sheet template should show the following for each month:
- Under Assets, you can see the totals for categories like petty cash, liquor, bar equipment, kitchen equipment (ovens, grills, microwaves, etc.), and furniture
- Under Liabilities, you can see how much is left on your business loan (if there is one), how much you pay monthly in rent for your business, how much your utilities are costing you, and how much you pay in wages
- Under Equity, you can see your total earnings
Do you need a profit and loss statement and a balance sheet?
You might be wondering why you need both a profit and loss statement (P+L) and a restaurant balance sheet… or even if you actually need both a profit and loss statement and a balance sheet (the answer to that second question is an emphatic YES—you need both the P+L and a balance sheet).
Why you need both
A profit and loss statement and a restaurant balance sheet complement each other, but neither can really take the place of the other. The profit and loss statement is itemized and detailed, which will help you make decisions about the future of your restaurant. It's the sort of thing you'll rely on at the start of a month and whenever tax season rolls around, but looking at it on a day-to-day basis won't be very illuminating.
On the other hand, a restaurant balance sheet template provides you with an immediate snapshot of your current and projected financial situation. If you're planning on introducing a new menu item or hiring staff during busier times, your balance sheet will show you how well-positioned you are (or aren't) to make such a move.
If your profit and loss statement for a particular month shows a loss, your restaurant balance sheet can help you pinpoint the cause; perhaps it's a menu item, such as an entree or drink, that isn't selling as well as you thought it would. Or, maybe the wages you're paying are outpacing your sales.
In any case, it's the restaurant balance sheet that you're going to be checking more often than the profit and loss statement. It can help you balance your expenses, liabilities, and profits, and put you on the path to long-term success.
Find a staffing balance with Qwick
With a restaurant balance sheet template to go by, it's easy to keep track of your operations and plan for the future. But did you know that it's also just as easy to find qualified talent to work shifts at your restaurant? With Qwick, you no longer need to worry about filling shifts or being understaffed. And, with that restaurant balance sheet template filled out, Qwick can help you quickly pay those workers and keep tabs on outlays.
Create an account today and get matched with experienced, vetted hospitality talent to fill shifts at your restaurant.
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