Management accounting in Restaurant by USAR
USAR is a short term for Uniform System of Accounts for Restaurants. The standardized accounting procedures for the restaurant industry, including those related to the presentation of restaurant reports: Statement of Restaurant Profit and Loss, cash flow, operation statements for all departments.
«USAR: Restaurant Management Accounting» is the best practice for analyzing and controlling the activities. The USAR model includes: restaurant budget, summary report for managers, a set of KPIs.
The set of reports by USAR is an ideal tool for using in restaurant business:
- a set of operating reports, the budget of the restaurant or a restaurant chain;
- budgeting system from departments to groups of companies;
- ready to use metrics and performance indicators of the restaurant (KPI);
- payment request and payment calendar for the restaurant;
- financial analysis and performance control.
Management accounting assists in decision-making and analysis:
- The plan/actual ratio allows the evaluation of performance data for the current, future and past periods;
- Analyze data, in fiscal and physical form and calculate percentage metric;
- Quickly get information about deviations in the work of the restaurant;
- Plan and analyze different scenarios.
Restaurant reports structure
General report. This is the result of operational activities for the restaurant as a whole. All accounts in the system are kept separately and aggregated into one overall report. The following statements are included:
The revenue is the revenue from:
- Retail Sales of merchandise;
- Other income.
It is recommended that the accounts and performance indicators be divided into groups.
The cost of sales. It is quite difficult to calculate the cost of sales in a restaurant. This is not just the calculation of the used raw materials for dishes sold. It also includes all energy costs, labor costs and other direct costs.
Salaries and wages. Cost of personnel includes salaries, bonuses, extra payments, insurance and all other people related expenses. A restaurant can not exist without this category of expenses. No staff – no activities. This section includes people groups:
- management team: is the payment of employees who are not directly related to the production process, or the provision of services. These are heads of structural units and the restaurant as a whole or departments;
- workers: are the expenses on those employees who ensure the benefit of the restaurant through their work;
Operating expenses are necessary expenses to keep restaurant business running:
- utility costs – paid monthly and can vary from workload;
- marketing – promotions, attracting new guests;
- music and entertainment;
- replacements of silverware and kitchen ware;
- Maintenance costs of equipment, premises, etc. ;
- equipment purchased in leasing – for example, you have purchased certain kitchen equipment and pay for it every month;
This is the result of all the activities of the restaurant. In other words, the net profit before taxes, loans, credits and other expenses.
The operational report is intended for detailed analysis in the conduct of management accounting of the restaurant:
- Rent: banquet halls, equipment;
- Merchandise sale;
- Entrance fee;
- Service charges;
Kitchen cost of dishes sold:
- Grocery, etc.
General and administrative costs. This is the cost of administrative staff, which is not related to the production process.
The distinguishing feature of the model is the absence of allocation of overhead costs to operating departments.
Operational metrics. Help to analyze the operational efficiency of the restaurant:
Income structure, per cent:
Average check. There are a number of methods of calculating the average check. Each manager chooses for himself what suits him.
- Average per check;
- Average per quest (or seat);
- Average per table;
- Average per dish.
Inventory turnover is money that is taken out of circulation for the long-term purpose of making a profit. The issue of inventory size should always be taken responsibly. Do not clog warehouses when there is no demand for certain products. And you need to keep stocks of products that are sold regularly.
Analysis of income. This is an important part in the management accounting of the restaurant. Analysis allows to solve a number of issues related to the activity as a whole.In the USAR standard, the following indicators are calculated:
- income per seat;
- income per 1 m2;
- Income per quest.
- Summary report
- Operations report
- General and administrative costs
- KPI – Restaurant indicators