Monthly Archives: June 2018

Restaurant Financial Management

Restaurant owners, while being aware of the financial management of their businesses, are more likely to be involved in troubleshooting the day to day issues that keep things running smoothly. Unfortunately, a financial accountant is a luxury that many small restaurant owners cannot afford. This article will address six main accounting problems that restaurant owners often encounter and how to either prevent them from occurring or how to solve the problems once they do occur. Being a small business owner is always a challenge and the restaurant business is complex financially.

This article will concentrate on those issues that can be resolved with some good accounting skills and procedural methods. By teaching restaurant owners how to look for financial issues before they arise, an accountant, can help the owner correct or improve the financial techniques being utilized to manage profit and reduce any losses that are preventable. The six issues addressed here will focus on the:

Problem One – Absence of an Accounting System
Problem Two – When Major Operating Expenses are Higher than Total Sales
Problem Three – Menu Offerings
Problem Four – Food and Beverage Inventory
Problem Five – Issues that Occur When Inventory is Higher than Sales
Problem Six – Utilizing a Balance Sheet and Profit & Loss at Month End

By investigating these issues, which are common problems for restaurant owners, managing these issues and troubleshooting them before the restaurant is out of control financially is feasible and can help an owner utilize accounting methods.

Problem One – Absence of an Accounting System

The first issues that a restaurant owner must deal with when trying to avoid accounting issues is to invest in a good piece of computer software that will help keep track of all transactions. Nessel, who is an owner and financial consultant to restaurant owners, recommends QuickBooks for keeping a General Ledger of all financial transactions that occur in the restaurant. All financial transactions must be recorded in the General Ledger in order for accurate records to be maintained. Without attending to this, the owner is not going to be able to run the restaurant without maintaining accountability in the ledger. Nessel further states that, “My experience is that how well the business is being proactively managed is directly correlated as to how well the owner is managing his “books”. Therefore, it is a primary concern for the owner to set up an accounting system in order to ensure the business runs smooth financially. Not having accounting and financial controls in place is the number one reason most businesses fail and if a restaurant is in trouble this is the first issue to address. The Restaurant Operators Complete Guide to QuickBooks, is recommended by many accountants as a guide to help setup a good accounting system.

Problem Two – When Major Operating Expenses are Higher than Total Sales

Statistics say that, “Restaurant food & beverage purchases plus labor expenses (wages plus employer paid taxes and benefits) account for 62 to 68 cents of every dollar in restaurant sales.” These are referred to in accounting terms as a restaurant’s “Prime Cost” and where most restaurants encounter their biggest problems. These costs are able to be controlled unlike utilities and other fixed costs. An owner can control product purchasing and handling as well as menu selection and pricing. Other controllable output costs for a restaurant include the hiring of staff and scheduling staff in an economically efficient way. “If a restaurant’s Prime Cost percentage exceeds 70%, a red flag is raised. Unless the restaurant can compensate for these higher costs by having, for example, a very favorable rent expense (e.g. less than 4% of sales) it is very difficult, and perhaps impossible, to be profitable.”

Rental expenses for a restaurant (if one included taxes, insurance and other expenses that may fall into this category such as any association fees) are the highest expense a restaurant will incur after the “Prime Costs.” Rent averages around 6-7% of a restaurant’s sales. Since it is in the category of a fixed expense it can only become a reduced ratio through an increase in sales. If the cost exceeds 8% then it is useful to divide the occupancy cost by 7% to find out what level of sales will be required to keep rental expenses under control so they do not put the restaurant out of business

Problem Three – Menu Offerings

Most offerings on a menu are priced by the owner after visiting other local restaurant competitors, viewing their offerings and menus prices. However, menu pricing should never be done by simply looking at the menus of their competitors. Menu pricing must be done (and periodically redone as supplier costs fluctuate) and documented into the software books. Some math skills will be useful as a menu is converting product prices from purchases to recipe units. A restaurant owner needs to know the cost of making a recipe in order to know how to price it. This means knowing what the ingredients and the quantity of ingredient used costs per recipe. There is software available to help with this and Microsoft Excel can be used to customize menu costing while linking to inventory items that are available.

Some of the things that an owner can do to help with accounting that are controllable through the menu would include:

– Pricing the menu for minimum wage increases.
– Using value-added meals to increase profits.
– Re-introducing price increases while still keeping your customer base.

A menu must be periodically updated as supplier costs change. This can be positive or negative according to the supplier. Either way, menu items can be adjusted according to the supplier costs with math and some help from inventory tracking software.

Problem Four – Food and Beverage Inventory

It is a common mistake for restaurant owners to review the Profit & Loss Statement and assume that what they have spent on food can be divided by sales in that period to find the cost of what was sold. This is an error. The inventory at the start and finish of the period must be known in order to calculate food costs in a precise manner. “For a restaurant with food sales of $50,000/month, an inventory difference of $1000 between the beginning and end of the month, can translate into a variance of 2%. This disparity represents half the total annual profit of a typical full service restaurant.” Simply put, one cannot manage food costs if they don’t keep records of what they are. Changes in inventory are essential to be aware of when calculating profit and loss.

Microsoft Excel spreadsheets can be utilized to track inventory and document pricing and know all the totals of inventory when it comes to food and beverages. Tracking this through Excel will prevent mistakes.

Problem Five – Issues that Occur When Inventory is Higher than Sales

When food inventory is too high, the costs will be too high and waste is inevitable. Calculating inventory needs is absolutely a necessity to prevent food from going bad, being over portioned in recipes or even stolen. “A typical full service restaurant should have on average no more than 7 days of inventory.”

There is an equation to use to find out how much inventory is needed for a restaurant to run properly. The equation is:

Step 1) Multiply your average monthly food sales by your food cost %.
Step 2) Divide that number (your average monthly food usage) by 30 (days/month)

By using this formula and keeping records of all the beginning and ending inventory the problem of losing money due to wasted food costs is reduced or eliminated.

Problem Six – Utilizing a Balance Sheet and Profit & Loss Statement

For a restaurant to be successful it needs to be operated like a large business by the owner as much as possible. A weekly report at the very least is needed. The formatting of the report should be categorized. Inventory, suppliers, labor and sales should all have a start and end period. Fixed expenses such as rent and electric should be broken down to fit the report if it is weekly, or daily. It is not advisable to wait until the end of the month to calculate a report as changes occur swiftly in the restaurant business.

It is a very important point that a start and end date should be included in the reporting and that even fixed expenses should be broken down so that a weekly net profit can be calculated. As previously mentioned, Microsoft Excel and other tracking software can be utilized for inventory and other costs, even scheduling which effects profit. Without keeping proper track of inventory, surplus, scheduling, menu pricing, portioning and all that has been covered in this study, can result in a restaurant going under. A restaurant owner simply needs to take the initiative to put some simple accounting strategies in place. It may seem as if a restaurant owner has to do it all; but, with some good software and a systematic method put in place keeping a restaurant on track financially will create financial rewards well worth the work.

Best Italian Cuisines in Cape Town

Located in South Africa on the shore of Table Bay, Cape Town is undoubtedly one of the most scintillating cities in the world and quickly coming out to be the epicenter of African food, art, culture and architecture. The city was primarily developed by the Dutch East India Company as a supply station for their ships. Surrounded by the numerous gorgeous mountains, this supremely glorious city is the legislative capital of Republic of South Africa.

Its spectacular harbors, stunning biodiversity, fine weather and enticing landmarks make it a major tourist destination. People from all over the world come to explore this sensational African city. The most unique feature of this city that makes it one of the firm favorite among the visitors is its location. From one side the city is absolutely ultra-modern with its cosmopolitan population and high-rise office buildings, on the other side one could still feel closeness to nature because of its proximity to ocean and mountains. Cape Town truly offers the best of both worlds.

Cape Town is a foodie’s paradise-

Of all the South African cities, Cape Town has evolved rapidly and the growing number of tourists to this town has accelerated this transition. Quite obviously the arrival of the people from different parts of the world made necessary changes in the food habits and the eating places. From the restaurants that offer authentic African dishes to the restaurants that can amaze you with their sumptuous Italian cuisines, there is no dearth of eating spots for the gastronomers to satisfy their hunger in Cape Town.

Top-notch Italian restaurants in the city of Cape Town-

A new trend has been noticed by the food critics. They are noticing that for the past couple of years along with the tourists, local people are also showing their immense interest towards Italian cuisines, and an extended number of Italian restaurant mushroomed all over this town are the strong evidence of this trend. The phenomenon is bewitching and keeping up with the trend, there are many restos opened up here that are offering delightful Italian cuisines. Here are top-four best restaurants in Cape Town renowned for their exotic Italian dishes:

A Tavola- Located in Library Square, Wilderness Road in Western Cape, A Tavola is a fine place to have great Italian food. This spacious, classy restaurant is famous for serving authentic and utterly delicious Italian cuisines. The hallmark dish of A Tavola are Fusilli ai Broccoli, Linguine Gamberoni (prawn pasta) and chocolate tart. You can expect friendly service and really good value for money. A Tavola will be ranked really high among the best restaurants in Cape Town.

Pane E Vino Food & Wine Bar– It is a trendy spot for lovers of Italian food. A great thing to do on a full moon summer’s night is to walk up Pane E Vino Food & Wine Bar before dark, and taste sizzling Italian wine. You can have a lovely light meal, or a sandwich made with home-baked focaccia bread, or just an Italian good espresso or cappuccino. The family owned wine and food bar is so warm and homely, and the atmosphere so charming, that it’s easy to become a regular.

True Italic- The restaurant is located in Bree Street in Cape Town. True Italic is known for cooking what is freshly available so the menu changes daily. After a day exploring Cape Town, you can experience the city’s buzzy culinary and nightlife scenes with freshly squeezed juice at True Italic. Gnocchi with pancetta and sage are the special delicacies if this fabulous eating spot. The tasting menu consists of delicious culinary delights including calamari nero and rainbow trout.

Osteria Tarantino- Meatballs, pepperoni pizza, chicken parmigiana, fettucini alfredo are the signature dishes of Osteria Tarantino that will surely crave you for more. Situated just behind the Cape Quarter Lifestyle Centre and offers an inviting interior as well as seating out on the sunlit terrace. The delicately flavored pappardelle, pancetta, porcini and Parmesan are simply unavoidable as the cook Enrico Tarantino showed his full mastery in preparing them.

The Best Romantic Restaurants

If you’re thinking about the perfect romantic getaway, think about Bali. They say that Bali is the break-up island, but that’s not the case at all. Myths about love hitches in Bali have been debunked, and you can splendidly enjoy your romantic vacation in Bali. Isn’t it a wonderful place to ignite the fires of your love and togetherness?

Bali is a city with a laid back atmosphere. You can revel in its dreamy landscapes. In South Bali, you can go a bit farther to the beach town of Seminyak. It is the next town located at the north of Legian. You’ll be engrossed in the luxurious ambiance of Seminyak. As another top scenic and tourist spot in Bali, Seminyak is more uptown and fashionable. You’ll find high-end spas and boutiques in Seminyak, considering that it is Bali’s shopping capital. At daytime, you can relax at the beach. It’s quieter at that time. But what makes Seminyak more attractive to locals and tourists alike are the high-end restaurants. Bring your dearest to wine and dine in Seminyak. It’s the perfect place to nurture your affections and passions for each other.

There are different ways to dine with your beloved in Seminyak. Your dream date comes true in this romantic and sophisticated paradise. Here is a list of the top 5 romantic restaurants in Seminyak:

Lestari Grill and Pasta. Here is the ideal place if you want to indulge in a fantastic gastronomic delight while wooing your beloved. When in Bali, they say you can’t miss this dining destination. The restaurant serves classic European grills and pasta with a touch of the Asian influence. Lestari is found at the heart of Seminyak and it is known to deliver perfection to your table. Foods they serve are grilled according to your preference, but save some space for their lip-smacking desserts as well!

Ku De Ta. Dining experience in the beach front Ku De Ta is unsurpassed. Dine while you are surrounded by the fragrance of the fresh ocean water. The view of the astounding Indian Ocean will take your breath away as you savor the restaurant’s mouthwaterining meals. As you are satiated, you might even be tempted to walk along the beach and dip your feet in the sand.

The Restaurant at the Legian. This is the place to be if you want to dine Asian, French, European and contemporary cuisine. If you’re a health buff, you can ask for their gluten-free options. Dining at the Legian is a spectacular setting. With their varied selections at the menu, but not too many to choose from, dining is made easier. When in Bali, visit the Restaurant at the Legian for a beautiful location with a touch of paradise.

K Resto. This restaurant is known to be the most upmarket of all the beach restaurants in Seminyak. The menu at K Resto is classy. It ranges from Indonesian cuisine to other Asian dishes. You’ll have selections from cheaper standards to the most expensive ones. How about the feeling of eating at the beach with your toes in the sand? You’ll find it at K Resto in Seminyak.

Metis. This is where you get the best of Bali when it comes to French dining. The location is so romantic that swooning over your partner comes naturally. On the way to this splendid paradise of a restaurant, you’ll pass by pretty gardens with full-size lotus ponds. If you’re a foie gras enthusiast, Metis is the perfect romantic restaurant to visit in Seminyak.

An Overnight Stop in Asia’s World City

After clearing customs and immigration, proceed to the luggage storage counter at the ‘Meeters and Greeters Hall’, where you can store your trolley or bag till you come back…

Buy an Octopus Card from the Airport Express Counter at the Arrivals Hall: This electronic stored-value card is accepted on most public transport and will make your life easier when traveling around Hong Kong as you won’t have to bother about small change…

Now you can hop on the Airport Express Train, with which you travel all the way to Hong Kong Station, or you can take a bus (A11/N11 travels to Causeway bay, Wanchai and Central – on Hong Kong Island, while A21/N21 travels to Mong Kok and Tsim sha Tsui – in Kowloon)

In Kowloon
The “Symphony of Lights” is a nightly orchestrated light, sound and laser show featured on 37 key buildings on both sides of the Victoria Harbour. Awarded the world’s “Largest Permanent Light and Sound Show” by Guinness World Records, this spectacle is staged nightly at 8:00 pm and is best viewed from Tsim sha Tsui’s Waterfront Promenade (you can also enjoy it from Golden Bauhinia Square in Wan Chai, on Hong Kong Island).

Not too far from there, in the area of JordanTemple Street’s Night Market is a good place to fetch a few bargains and feel a bit of a true Hong Kong market ambience… The brightly lit stalls are selling everything you can think of… and there are also more than a few food-stalls and eateries around, where you can indulge on simple, delicious Chinese food.

The market is open daily from 4 pm to 11 pm (although it gets busy only from 7 pm and onwards).

The area of Mong Kok, north of Tsim sha Tsui and Jordan, is famous for its open-air markets and late open shops. It is also chock-a-block with many authentic eateries and restaurants where you can enjoy some delicious local food at reasonable prices.

Ladies’ Market, along Tung Choi Street, and parallel Sai Yeung Choi Street South are Mong Kok’s best late-open shopping streets.

The area of Tsim sha Tsui (between the waterfront and Jordan’s Night Market) is Kowloon’s most busy and vibrant district… especially in the evening, when the streets are packed with diners and party goers. As a matter of fact, Tsim sha Tsui itself comprises a few different wine & dine precincts:

Knutsford Terrace: a small terrace street, lined with bars, pubs and restaurants, is Tsim sha Tsui’s smaller version of Lan Kwai Fong (although the ambience here is far more relaxed…).

Hillwood Road, north of Kimberley Road and Knutsford Terrace, has been nicknamed “Hillwood SoHo“and it boasts a few good Chinese and Asian restaurants, alongside some nice cafés…

Ashley Road somewhat resembles Wanchai’s Lockhart Road, with a good mix between restaurants, resto-bars and nightspots (forget about the girls though…).

Classy restaurants, as well as some nice cafés, can be found in Tsim sha Tsui’s leading hotels, as well as in the large shopping malls…

On Hong Kong Island
Victoria Peak (or simply “The Peak”) is one of Hong Kong’s most popular tourist attractions. The world-class views of the city and the harbour are simply spectacular… especially at night, when the countless skyscrapers are flashing in millions of dazzling lights…

ThePeak Tram is the most popular (and scenic) way of getting to The Peak.

It operates daily until midnight and climbs the full distance in approximately seven minutes. You can board it at the Lower Terminus, on Garden Road, Just a 10-15 minutes walk from Hong Kong Station (Airport Express) or MTR-Central.

Up at the top, there is a variety of restaurants, cafés and shops.

Causeway Bay is Hong Kong’s trendiest shopping district. The relatively compact area around Causeway Bay MTR Station houses some of the city’s best department stores, shopping malls and prestigious shops. Hong Kong yuppies consider Causeway Bay as the city’s “fashion barometer” – The place to go to when you want to know what’s new and “in”…

Other than countless fashion boutiques and glitzy shopping malls, Causeway Bay has more than a few good restaurants, cafés and nightspots.

Hong Kong’s modern business district – Central,is conquered by sparkling skyscrapers that accommodate the Asia-Pacific head office of international corporations, alongside bank managements, foreign consulates and stylish shopping malls.

Thanks to its “international ambience” and well-heeled shoppers, Central concentrates some of Hong Kong’s most glamorous restaurants, like Caprice at the Four Seasons Hotel, Toscana, Grissini and Le Parisien, among others…

Just a stonethrow from Central, Lan Kwai Fong (often abbreviated as LKF)is possibly Hong Kong’s most popular and most famous nightlife arena: The small quadrangle of streets, formed by the L-shaped Lan Kwai Fong Street and neighboring D’Aguilar Street, is packed with bars, pubs, clubs and some excellent restaurants that make it a popular choice for locals, expatriates and tourists alike.

Still around Central (and LKF), the SoHo is another extremely popular wine and dine district. Unlike Lan Kwai FongWan Chai and some of Hong Kong’s other nightlife areas, SoHo is more about quiet bistro-style restaurants and cafés, where you can enjoy a romantic evening, or have your coffee alfresco, while watching life on the street go by…

Lockhart Road in Wanchai (Wan Chai), together with some of the streets around it, form one of Hong Kong’s most popular nightlife areas, where discos and nightclubs can be found next to girly bars, posh restaurants and casual cafés… No matter what you look for, you’ll probably find it in Wanchai.