As a hospitality business owner, you know it is important to always keep your finger on the pulse. From knowing the number of covers each day to being aware of customer online reviews, you must know what is going on in every facet of the business. But, are you intimately aware of your financial position or performance?
Accounting packages such as MYOB, Xero and Reckon (to name just a few) have a plethora of reports to look at. While it is great to be able to dive deep into these reports, business owners are often not really sure what they are looking at, because at the end of the day, they didn’t buy or build a business to spend many sleepless nights grasping at the understanding of reporting. Business owners need reports that are accurate, complete and relevant.
Firstly, it is imperative for all reports to be accurate. In our line of work, I increasingly encounter clients who have had previous bookkeepers’ providing inaccurate work, and not providing correct data. Their earlier issues were not detected either, as the business owners didn’t know what they should be asking for from their accounts or bookkeeping staff.
The most common issue we find when we onboard new clients, is a discrepancy in revenue not matching with the Point-of-Sale system.
Secondly, we often find that new customers tell us that they have not been receiving complete reports. This may be due to journal adjustments or all the data not been entered. Recently, we came across a situation where the previous bookkeeper was only entering supplier invoices once they were paid. Therefore, the client was never able to see clearly what was outstanding to the creditors. This is an example that shows the need to see the Aged Payables report
Lastly, relevance. The hospitality industry is a unique industry in itself. As industry specialists, we understand the value of providing reporting that is specific to hospitality. Many bookkeepers and accountants alike are not tailoring reports to accommodate the specifics for the industry, such as the importance of showing revenue between departments (e.g. food sales, beverage sales, etc.).
So, which reports should you be looking at or receiving from your accounting professional, especially if you are busy?
- The Balance sheet and Profit & Loss reports are a must. These reports show where the business is financially positioned and how it is performing. It is also useful to see reports comparing the same period from the previous year. If a budget is in place, we like to provide an analysis and report the budget against the actuals too.
- The Aged Payables report. Hospitality is an industry where debtors are generally not a big concern; however, creditors are invariably on-going, therefore it is a good idea to also look at a creditor’s report to understand how much money is outstanding to your suppliers.
It is ideal to receive these reports at least monthly. That way, any concerns with gross profit or general spending are addressed sooner rather than later. Depending on the situation of the business, weekly trading reports may be recommended.
Of course, there are a range of other reports that you should look at on a monthly, quarterly and annual basis too, but these will give you a good snapshot when you are pressed for time.
At Brisan, we work with each client and provide reports based on their individual needs. If you would like to know how you can start receiving accurate and relevant reports, please feel free to contact us for a chat on (08) 8235 1594 or send us a message and we will be happy to help you.