Mastering Restaurant Cash Flow

restaurant cash flow

Anticipate best-case, worst-case, and moderate-case scenarios to prepare for various outcomes. Your cash flow template should be updated often, ideally weekly or monthly. By doing this, you can be confident that the financial information you use to evaluate and make choices is always the most recent. Format the cells as desired to make the cash flow statement easy to read and understand. You can add borders, apply cell formatting, use bold or italic fonts, and adjust column widths as needed.

For external uses, banks use the cash flow statement to decide on the creditworthiness of the business. Conklin said it’s been a struggle, but she was happy that Glasserie was able to retain about half the sales it did before it closed its doors to dine-in eating. In reality, cash flow may vary depending on various factors such as seasonality, market conditions, and unforeseen circumstances. It’s important to regularly monitor and update the cash flow forecast to reflect the actual performance of the restaurant.

Restaurant Cash Flow Template: A Comprehensive Guide for Effective Financial Management

It takes into account the restaurant’s assets and liabilities and calculates the restaurant’s equity to know its net worth on that particular date. An income statement does not include the assets and liabilities restaurant cash flow owned by a restaurant, and thus, does not provide a complete picture. You’ll also want to know operating cash flow, which is the amount of cash that your restaurant’s daily operations generate.

Simply put, that’s the amount of cash coming in versus the amount of cash going out on a daily, weekly, and monthly basis. If you don’t understand this basic concept, you put yourself at financial risk. Compile a list of all monthly expenses, such as rent, utilities, payroll, inventory purchases, marketing, and maintenance costs. Compare monthly expenses against revenue to determine profitability and identify areas for cost reduction or optimization. Your food and beverage sales reports are the most standard reports you will generate on a daily, weekly, and monthly basis. While your sales reports are only part of your restaurant’s story, you’ll need them to move forward with generating every other type of financial report.

Analyzing Monthly Expenses

Knowing your total cash flow means you know your cash inflows and your cash outflows. As a new restaurant owner, you will be very interested to know your cash flow on a frequent basis. It’s recommended to generate a restaurant cash flow statement on a weekly basis. Restaurants typically carry insurance coverage for liability, property, workers’ compensation, and other risks. Paying insurance premiums is an essential cash flow operating activity to protect your restaurant’s assets and manage potential liabilities. To manage cash flow, regularly review your expenses to see if there are any ways to reduce overhead costs.

restaurant cash flow

Numbers that have discrepancies should be re-counted, and then entered into the master list only after they’ve been reconciled. When you first began to plan for your restaurant, you were playing a few guessing games. If you’re struggling to keep up with marketing on your own, a junior manager with social media skills can be a huge help in keeping your online presence consistent and appealing. By tracking these figures, you’ll know when to update your menu and your prices and by what exact percentage per item, rather than per plate or glass. Inviting competition for your business is in your organization’s best interest.

Create cash flow forecasts

For instance, increased debt could mean there is more cash as you have taken a loan from somewhere, and decreased debt can mean less cash as you have paid off a liability. The financial side of running a restaurant can be dull and not as exciting as what’s happening in the kitchen. You would understandably want to spend all your time trying to improve your restaurant’s operations rather than reading a bunch of boring papers.

restaurant cash flow

You could be losing hundreds of customers for fear of credit card fraud if you do not start adopting better payment processing equipment. Business saving is possible either by increasing the income or by cutting down the expenses. If you are a business starter, a sudden increase in income is least likely to happen. Take a look at these strategies to manage your cash flow across all your venues. Elana Kroon used to work in restaurants before becoming a journalist and expert restaurant industry content creator at Eat App. Each section is broken down into more parts depending on the restaurant’s operations.

Find the right business checking account

Banking Services for payments made via ACH or wire from the Bluevine Business Checking Account are provided by Coastal Community Bank, Member FDIC. Certain payment funds, including payments made by credit card, are temporarily held during payment processing by Silicon Valley Bank, a division of First-Citizens Bank & Trust Company. Money transmission services for International Payments are provided by a third party and are also subject to their applicable terms and conditions. This content is for educational purposes only and should not be construed as professional advice of any type, such as financial, legal, tax, or accounting advice. This content does not necessarily state or reflect the views of Bluevine or its partners. Please consult with an expert if you need specific advice for your business.

  • The result is a number that gives you a rough idea of a restaurant’s financial health.
  • Any restaurant must manage its cash flow effectively in order to survive and succeed.
  • That means investing in good accounting and POS systems and hiring people who are as committed to maintaining a positive operational cash flow as you are.
  • Restaurants typically carry insurance coverage for liability, property, workers’ compensation, and other risks.