Salt Lake City, UT | Jan. 9, 2023
6 Steps to Closing Out Books
Closing out the financial books for a restaurant at the end of the year can be a complex process, as it involves reconciling various financial accounts and preparing financial statements. Here are the general steps you can follow to close out the financial books for your restaurant at the end of the year:
Reconcile all bank accounts: Review all bank statements and make sure they match the records in your accounting software or manual ledger. This includes checking that all deposits, withdrawals, and other transactions are accounted for.
Review and adjust the general ledger: Go through the general ledger and verify that all transactions are properly recorded and classified. Make any necessary adjustments to ensure that the financial statements accurately reflect the financial position of the restaurant.
Close out the income and expense accounts: At the end of the year, you will need to close out the income and expense accounts so that they are ready to start fresh in the new year. This involves transferring the balances of these accounts to a summary account called "Retained Earnings" or "Income Summary."
Prepare the financial statements: Using the information in the reconciled accounts and the adjusted general ledger, prepare the financial statements for the restaurant. These typically include a balance sheet, an income statement, and a statement of cash flows.
Review and analyze the financial statements: Review the financial statements carefully to get a clear understanding of the financial performance and position of the restaurant. Look for trends, variances, and other insights that can help you make informed business decisions.
File any necessary tax returns: If your restaurant is a separate legal entity, you will likely need to file tax returns at the end of the year. Make sure to gather all necessary documentation and work with an accountant or tax professional to ensure that the returns are filed accurately and on time.
Additional Considerations For Restaurant Franchisors
In addition to the steps above, as a franchisor you will also need to consider the financial performance of the individual franchise units. You may need to review and analyze the financial statements of each unit and compare them to the overall performance of the franchisor. This will help you identify any trends or issues that may need to be addressed.
Planning for 2023
Restaurant sales forecasting helps you control inventory, staff wisely, and predict profits. Financial forecasting is the process of using historical data and trends to predict future financial performance. It can be a valuable tool for restaurants to plan for the coming year and make informed business decisions. Here are a few ways that restaurants can use financial forecasting to plan for the next year:
Predict future sales: By analyzing past sales data, restaurants can make an educated guess about how much revenue they can expect to generate in the coming year. This can help them plan for staffing needs, inventory levels, and other operational expenses.
Identify trends and patterns: Financial forecasting can help restaurants identify trends and patterns in their financial performance. For example, they may notice that sales tend to be higher during certain times of the year or that certain menu items are more popular than others. This can help them make informed decisions about how to allocate resources and plan for the future.
Develop a budget: By forecasting their financial performance, restaurants can develop a budget for the coming year. This can help them allocate resources and set financial goals, such as increasing profits or reducing expenses.
Make informed business decisions: Financial forecasting can provide valuable insights that can help restaurants make informed business decisions. For example, they may use financial forecasts to determine whether it makes sense to expand their business, invest in new equipment, or make other changes.
How Crisp's All-In-One Restaurant Technology Platform Makes Financial Forecasts and Budgets Easier for Restaurants to Prepare
Streamlines data collection and management: Crisp QSR can help restaurants streamline data collection and management by providing a single platform for recording and tracking financial information. This can make it easier to access and analyze data, which can help restaurants make more accurate financial forecasts.
Provides real-time insights: Crisp All-in-one technology can provide real-time insights into a restaurant's financial performance. This can help restaurants identify trends and patterns more quickly and make more informed decisions about how to allocate resources and plan for the future.
Enhances collaboration: Crisp All-in-one technology can enhance collaboration by providing a single platform for sharing and accessing financial information. This can make it easier for restaurants to work with their accounting team, franchisees, and other stakeholders to develop and track financial forecasts and budgets.
Overall, using Crisp all-in-one technology platform can help restaurants streamline their financial management processes and make more informed decisions about how to allocate resources and plan for the future.