It appears that restaurants are starting to turn around from their race to the bottom. Prices at the major restaurant chains dropped rapidly during the economic downturn as competitors raced to offer a better deal to customers who had thin wallets. Even though margins have been pretty thin, this has at least led to one good outcome for restaurant owners and managers: they are being fiscally responsible.
In order to shave costs and offer better value to customers, restaurant managers have been relying heavily on their accounting software. Those managers with a good system in place have been able to make better decisions because they had a good handle on which products were profitable.
Restaurant owners with good restaurant accounting software and good people know exactly how much each ingredient costs. Although prices fluctuate daily they are disciplined and enter the necessary data into the software each day. They can then use the restaurant software to turn the data into information. Data is just a bunch of numbers, but information represents something that can be understood and used to make decisions.
How is your system working?
You’ll need to ensure that after ingredient purchases are made at your restaurant, your team enters the prices into the computer. Sometimes restaurant managers don’t see this as a value-added activity so they skip this step and just assume that prices haven’t moved. Over time this can lead to faulty data and bad decisions.
ERP for Restaurants
ERP stands for enterprise resource planning and it is the hottest trend in software and business today. Basically a restaurant ERP software solution would mean that your restaurant is all run using the same software. Your sales cycle, purchasing cycle, and accounting are all under the same roof. There are several major advantages for restaurants that choose to use ERP software.
(1) Managers don’t have to train the employees on four different types of software. There is just one piece of software that everybody learns to use. This can improve worker morale, and it saves money in training costs.
(2) With your restaurant using an ERP system information will be easier to access and manipulate. If accounting needs information, they don’t have to download the data from sales or purchasing and then re-enter the data into their software. All the data are stored in the same database making it easy for anyone to get the information they need.
(3) The centralized database also provides for more accurate information. Because data is not entered more than once, there is less chance for error.
As your restaurant looks to cut costs try and find an accounting software package that fits and that can communicate with all areas of your business. Make sure you are disciplined in entering information into the software. Use the new information to choose which products are best and which should be dropped.