Hospitality folks – hang in there. These last too-many-months of COVID have been hard on you. Not only have you had to adapt to a national lockdown, but you’ve come out the other side faced with fresh new challenges to overcome.
* Reduced covers due to social distancing requirements
* Additional admin burden from administering furlough scheme, EOTHO, and changing VAT rates
* Customers booking tables but not showing up
* PPE requirements and other costs of creating a COVID-safe environment
* Training staff for all of the above
We’ve compiled this list of tips to help you get some quick wins for your business in a time where you’re not feeling overly victorious. You’ve got this!
Check delivery notes against invoices to stay on track
You’ll know in your hospitality business, suppliers sometimes deliver to you several times a day or week which means a lot of invoices are getting produced. It is important to check delivery notes against the invoices. Supplier statements also need to be checked against the invoices produced so items don’t get lost or missed.
Do regular stock takes
In the hospitality industry it’s so important to do regular stock takes so that any discrepancies in stock can be found immediately. It’s also good practice to check that the till agrees each day, so discrepancies are shown and dealt with quickly.
Review your numbers
Talk to us if you’re not getting management accounts. Management accounts provide up to date financial information to help you make informed decisions. You can review your numbers by sales channel to see where to focus your efforts, and compare your performance to your plan.
Knowing and understanding your gross profit figures is so important
Your ‘Gross Profit’ is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. The gross margin is your gross profit divided by your sales. In the hospitality industry you should generally aim to make around a 60 to 70% gross margin.
Gross margin is critical for hospitality as it has to be high enough to cover fixed costs such as rent, and still generate a profit. Checking in regularly is vital for keeping on top of it all.
- You want to take into account staffing costs which are based on time worked not on sales volume
- Understanding likely sales means you can work out how many staff members you can afford while still covering other costs
- If your gross margin is too low, your business will not be profitable and will eventually fail. We can get quite granular and work out your margin on individual dishes if costed out properly.
We get all our hospitality clients using Receipt Bank
Receipt Bank is a platform used to manage receipts, invoices and other documents – and if you’d try it just for one month, you’d know why we recommend it as a no-brainer. It’s quick. It’s easy. It’s not expensive. And it saves you hours of valuable time spent finding receipts and inputting data.
Seriously, all you need to do is take a photo of the receipt or invoice with the app, or forward the items to a unique Receipt Bank email address. The invoices/receipts are then checked by us the accountant and uploaded into Xero.
Find a great POS system (that integrates with your accounting software)
The first point here is the importance of the POS system – full stop. If you’re not using a POS system already, you could be saving yourself a tonne of time. It makes your check-out process quick and simple for your staff (and we all know happy staff make a better business) and it means you get real time data at your fingertips wherever you are.
Inventory management is easier because you can see when stock is low, and what is selling best. Plus you have access to data that shows employee performance so you can incentivise and nurture your people.
To the second point. Now you’re on board, use a POS system that integrates with Xero. When your systems align like this, you won’t waste any time moving data from your POS system into your accounting system. It’ll do it automatically.
Baby steps to a better business long term
These changes to your internal systems, accounting processes and tech choices might feel small – but those small wins add up to overall big picture success.
Anything on this list you feel like you’re not getting, or you don’t feel confident to do yourself, we’re always around for a chat about how we can support you.
If you’re doing all of these things, but you’re still struggling – firstly, well done you. Secondly, don’t panic. There are plenty of other ways we can help – we’ll just need to look a little closer at your business. You can start today, by telling us a little more about you.