iHelp: Between the Sheets

It's time to bring your restaurant's accounting strategy into the modern age, here's how.

Good food. Accommodating service. Strong buzz. Loyal regulars. They’re all essentials for success, but perhaps the most overlooked differentiator comes down to that most un-sexiest of topics: bookkeeping.

“A love of food and beverage is not enough for long-term success in the restaurant industry,” says Hudson Riehle, senior vice president of research for the National Restaurant Association. “It’s important to have a well-thought-out and honed business plan and allied accounting system to monitor and analyze the business.”

Proper bookkeeping can vastly improve profitability, says Brian Kerby, restaurant operations consultant for US Foods®.

“Most restaurant operations have 4% to 6% of profitability (gain) that exists within their current sales,” Kerby says. “By keeping their focus on accurate and timely weekly key metrics, they can leverage ways to dig up that buried treasure.”


First, ensure basic procedures are in place – including reliable cash-handling and deposit practices, profit-and-loss statements, weekly inventory calculations and an annual operating budget. “There’s really no substitute for having a strong internal accounting system,” says Riehle. “Good business decisions are based on good data.”



Most expenses fit into two categories: fixed costs (mortgage, utility and refuse-handling costs) and prime costs (food and beverage costs coupled with labor). There’s very little wiggle room when it comes to fixed costs, but analyzing prime costs may unearth unexpected savings.

Currently, more than 95% of independent operators report food and labor costs on a monthly basis. This makes for blurry comparisons. Does one month include five weekends, and the next, just four?

By switching to four-week accounting and measuring prime costs on a weekly basis, Kerby says it’s easier to make period-to-period and weekly comparisons on the products and people you truly need.

Red flags are easier to spot, and problems can be corrected before they mount. Food costs by individual ingredients also can be nailed down, catching over-portioning and waste. Plus, it’s now easier to assess when extra servers are needed on the floor.


Front-of-the-house POS systems that connect with the back-office operations efficiently track transactions by inventory, labor and a host of other metrics. Linking vastly reduces human error, minimizes the amount of time managers spend inputting numbers and makes it faster to act on data.

Greater efficiencies can be gained with menu boards and tablets that allow for “yield management” or “flexible pricing” strategies – which allow operators to adjust menus and menu listings, depending on what’s happening on the floor, Riehle said.

At Stiltsville Fish Bar in Miami Beach, Florida, part of the Grove Bay Hospitality Group, its $1 oyster promotion proved wildly popular. When real-time data showed that hundreds of oysters were flying out the door – too many to keep up with inventory – the restaurant limited this offering to just six oysters per person.


In 2014, Grove Bay adopted Compeat software to centralize workforce data when the South Florida chain had two restaurants. Now with nine locations – and six more to come – unified records are more helpful than ever, says co-founder and CEO Ignacio Garcia-Menocal, a CPA by trade.

The Compeat data extends from when someone is recruited and hired to their ongoing work schedules, sales reports and payroll, thus eliminating disputes.

In Cleveland, the decision to adopt the Entrepreneurial Operating System helped Spice Kitchen + Bar. “We’re measuring our average spend per person, the number of reservations at the beginning of the week versus how many we need to do to make our budget goal,” says owner Ben Bebenroth.

Spice used to analyze its previous month’s data to check traffic, food and labor trends. “Now we’re looking back on the weekly (data)...and looking at how it will shape (the month) we’re already in,” Bebenroth says.

With its new, digitized intelligence, Spice revamped its bar snacks to stress easy-to-prepare plates. Per-person average bar tabs zoomed from $22.50 to $33.80 in weeks.

“I had a bar menu before that. There were all kinds of snacks on there. It was good food, but it didn’t have any specific purpose,” Bebenroth says. “Now it’s tactical.”

For accounting tips on finding buried treasure, go to usfoods.com/foodfanatics