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Taking over restaurant/bar financials. Books are a mess

I recently gained some side work for a client who's previous GM (relative) woefully managed the books. I think it's at a point where I need to reconcile the bank account, create a trial balance, and start fresh. Any suggestions? I have not even looked at any financials or bank records yet. I am looking for a broad plan, or perhaps step by step directions for setting up solid financials for an upscale restaurant/bar. I have never been in this industry. Also, advice on taxes would be nice. I assume estimated S.T payments are necessary, but other tips or tricks would be nice. BTW this is a flow through, LLP, using quickbooks. No bank rec!


Ross Anderson, CPA, MBA
Title: Controller
Company: TFS Capital
(Controller, TFS Capital) |

You have a lot of work to do. Books in disorder is by no means rare for some small business. Please make sure that your agreement and fees are reasonable for the work, as it could be a ton of work and you don't want to be underpaid, especially given that it puts your reputation and possibly even license at risk. Ask for everything under the sun.

Tax estimates vary by state. You will need all the tax records to get things in order.

Be mindful that there is a lot of spoilage and breaking things in this industry, and not always the best margins.

Dale Folkers
Title: Chief Financial Officer
Company: Barmuda MMC, LLC
LinkedIn Profile
(Chief Financial Officer, Barmuda MMC, LLC) |

Typically the company uses a POS system, an Accounting system, and sometimes a Payroll system integration of these will make the task easier, but Ross is correct cleaning up a mess is risky and time consuming.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

You also have a four-fold fix, and which section to correct first is a difficult decision.

You need to fix (you'll need to pick the order)

1. Cash
2. The Books in general (G/L, Payables).
3. The POS system (Inventory, A/R, Invoicing, etc.)
4. The Payroll system (PR)

Each will require different information. I personally would try fixing the issues on a go forward (i.e., the POS system and HR), then go back and balance the checkbook which will allow you to correct the G/L. Finally, simultaneously you'll need to correct and institute controls, processes and systems.

As mentioned, all is time consuming and make sure you don't "eat" your profit in free time...

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Well I am a little confused. You said they use quickbooks currently so it doesn't sound like you need to start from scratch. I would run a P&L and BS and see what it looks like. Is that data up to date from the POS? Have they imported bank details? You also need to run Aging reports and analyze that data. I think this project sounds crazy fun. I worked in a full service hotel for 10 years so having strong inventory controls is a must. Let me know if you have questions.

(Financial Analyst) |

Thanks guys. Awesome advice so far.


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