The fundamental reason for starting a business i.e. restaurants is to make profits. Restaurants managers or owners need to know exactly how cash flows in and out the business so as to reduce losses and maximize on profits. As a director managing keeping track of restaurant finances will ensure that cash flow is effectively monitored and enable the success of such a business. As such, maintenance of accurate business income, profits, expenses, budgeting, and forecasting are equally important and has various benefits. To begin with, accurate record keeping is vital since it enables a business to determine its profitability. This means that when there is accurate expense and gross receipts records for the restaurant business, then the profit or loss realized by the restaurant business can easily be calculated (FSW, 2015). Expenses could include travel, purchases, transportation, rental costs, business licenses, and employee wages among others. On the other hand, gross receipts could include credit card payments, bank deposits or cash payments.
Second, accurate maintenance of such records would ensure that accurate financial information can be obtained at any time. With such information, potential investors or creditors can carefully assess the financial restaurant records and help them make informed business decisions such as forecasting on the potential business growth (IRD, 2015). This means they can scrutinize such information based on evidence of records such as bank statements, invoices, bills, and receipt books among others. Thirdly, there would be proper maintenance of the business financial controls that helps in budgeting. With accurate handling of business expenses and revenue, profits can be maximized. Furthermore, it becomes easy to determine whether the business resources are being efficiently managed which helps in budgetary allocation for business resources. Generally, accurate record maintenance helps in realization of positive returns and the success of a business.
References
FSW. (2015). Basic Restaurant Accounting.
IRD. (2015). The Importance of Record Keeping.