Owning a bar or nightclub is equally rewarding as it is challenging. In recent times, it has been an especially difficult sector of the hospitality industry to manage. Staying on top of your bar or club accounting is integral to the success of your business.
The importance of inventory
Mundane as it sounds, the day-to-day administration and management of your bar or nightclub must not be neglected. Margins in the hospitality industry can be slim, so it is crucial that you check your inventory frequently and get a handle on your business’s cash flow.
For the majority of hospitality businesses, a partial inventory is recommended to be taken every week, especially if you have perishables (food, such as bar snacks). This will also help you stay on top of your high-value goods. On a monthly basis, make sure that you are taking a full, physical inventory.
To calculate inventory, you will need to take into consideration total beverage sales, resources available (accountants, bookkeepers etc), the skill set of management staff and any technology that may aid you. These different variables can influence how quickly and efficiently you can do your inventory and can demonstrate what parts of your business require work. Stock loss, such as dispensing errors, breakages, spillage or theft also highlights the importance of inventory management.
Systems and processes
Make sure that you’re regularly reviewing the performance of your business, so you don’t miss out on identifying any opportunities to improve it. We recommend that you do this once a month or once per quarter. To help you do this, set up processes that you can reuse. For example, a monthly performance report could start off with you looking into your customers’ behaviour. This will allow you to find out which drinks are your best-sellers and worth upselling!
Technology integration makes for better hospitality accounting. Having the right technology to hand will make all the difference in the success of your business. A good POS (Point of Sale) system streamlines operations so you can spend less time managing your restaurant and more time growing it.
A POS system is not just used to process payments and monitor revenue but is also able to provide information about the average spend per table and the most popular drinks at your establishment. You can take this one step further and integrate your POS with your management system and use it to raise your marketing efforts, by offering guests discounts and incentives to visit again. In turn, this will increase revenue. In the short term, a good POS system can also speed up the order process, giving your customers a better experience.
Accounting software for bars and clubs
Choosing the right accounting software for your business is crucial. Accounting software is designed to help make your business’s financial operations run smoothly, so if this isn’t the case with your current software, it may be time to consider switching it up.
There are many benefits to using Xero as your business’s accounting software. Its features increase business efficiency, with alerts and reminders for important payment deadlines. It can also connect to apps like Square so you can get data directly from your POS system. The team at Steele Financial are experts in all things Xero and can provide you and your business with Xero training if necessary.
Accounting software like Xero is especially useful when it comes to managing payroll for your bar or club. It’s important to keep all employees on the payroll. In the hospitality industry, it is standard to have casual or temporary staff, which can cause problems when it comes to organising payroll. By using a cloud accounting software, you won’t have to worry about making any mistakes.
How to deal with busy periods
When most hospitality businesses are winding down for the night, bars and nightclubs are just starting to fill up. This can come with its challenges when it comes to financial management. It can leave little time for forecasting and planning.
As well as these unusual hours, bars and nightclubs face the challenge of seasonal fluctuations. During the festive season or big holidays bars and clubs may experience an influx of customers that can throw off their usual bookkeeping schedule. This puts extra pressure on the management team. Some accountants offer help to hospitality businesses on a seasonal or ad-hoc basis so that they can deal with these busier times.
Save time by using good cloud accounting software as mentioned earlier in this post. This will help you stay organised throughout the busy periods and stay on top of your cash flow. Xero has an app that you can download and use to work on the go.
Where to find bar and nightclub accounting help
Outsourcing to an accountant with experience in accounting for the hospitality industry is a great way of staying on top of your business’s finances and admin. Most accountants can also help with forecasting, meaning that you can begin to make exciting plans for the future of your bar or club.
At Steele Financial, we understand how bars and nightclubs have a specific business structure that makes them unique. Our accountants understand how to provide financial help to hospitality businesses and have a range of experience working with different clients to achieve their goals. From general financial advice to forecasting help and payroll management, the right accountant can provide you with the security you need to continue running your business effectively.
The Steele Financial team offer a Full Finance Department service to hospitality businesses. This is where you can outsource all of your accounting to us. We manage everything, from payroll to HMRC, and take care of all the numbers so that you don’t have to. As well as reducing your chances of receiving fines for late payments, you will reduce the risk of the business failing due to financial mismanagement.
Get in touch with a member of our team to learn more about how we can help your bar or nightclub.