Emerald Business Systems Blog

Food & Beverage Management: Standard Restaurant Accounting versus Cost Accounting

Posted in Bars and Taverns,Restaurant by ebs4pos on July 11, 2009

Another common issue is an operator with little accounting experience and who is, therefore, uneasy about directing the accounting “pro” as to how and what reports need to be generated and in what time frame. As has been previously mentioned, the goal of financial management reports is to improve operational efficiency and profitability. The determination, therefore, of what financial management reports need to be generated should be determined by the operator. Just like financial accounting reports are created and formatted according to the instructions of the end user, such as the IRS, financial management reports, likewise, need to be generated based on the direction given by their end user, the operator. If an organization is large enough to have an accounting department headed up by a CFO or controller with a strong hospitality background, this is not necessarily a huge problem, as this individual should be able to guide accounting towards the production of reports that will be operationally actionable. If, however, an organization does not have the luxury of a large, seasoned accounting department or executive, it becomes the responsibility of the operator/owner to instruct the “accounting” employee as to what management reports are necessary. It is also worth noting that an accounting professional with a long history in the accounting field may not know what information to provide on management reports if their accounting background does not include hospitality experience. Under these circumstances, the operator must again “coach” the professional on what kind or information and report styles are important for running the operation. Whatever the situation for a given operator, it is critical that they question the reports that they are being given to ensure that they provide adequate information for making operational decisions. Remember, just because current reporting contains accurate information and meets generally accepted accounting principles, that does not mean that your financial information is being collected and reported in a manner that best enables management to make operational decisions.

via Food & Beverage Management: Standard Restaurant Accounting versus Cost Accounting.


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