YOUR 7-STEP CHECKLIST FOR MONTH END – STEPS 4-7
Not read steps 1-3? Check them out here:
Step 4 - Wastage
Alongside your stock take, you should also be accounting for any waste.
When you think about wastage, consider not only the prepared food that has been binned because it didn’t sell, but also raw ingredients that went out of date, or got cross contaminated with other foods.
You may have had ingredients that were delivered in a bad state, this month, and can’t be used. You should request a refund, of course, and do consider the quality of your supplier if this is happening regularly. Doing regular checks will help you pick up on this.
Food that is consumed by staff should also be recorded as wastage. Not because you are mean and would not allow your staff to eat, but to ensure that when you compare your sales with purchases you get the accurate figure. In light of just one month or only a few staff members, it may not seem important, but it is a consideration for business decisions and to know exactly where your purchased items are going.
Do not look at wastage as a bad thing and try to hide it. Embrace the reality and strive to improve.. There are many opportunities these days to reduce waste and even help others.
If you don’t deal with consumables, consider if there are areas in your business where wastage is occurring.
Step 5 - VAT checks
The standard VAT return period is every three months, but it is important to carry out monthly VAT checks to ensure that mistakes are spotted early and corrected before it becomes a real problem. VAT has an effect on both sales and purchases. Depending on how you record your sales you will need to make different checks.
VAT is complex, especially in industries such as hospitality, so if you are not sure, speak to me or a fellow expert who can help.
If you do nothing else, please make sure to check the VAT due to HMRC each month (even if you pay quarterly) and set the money aside, so that when it comes to paying it your cashflow is not affected.
If you struggle with quarterly VAT returns, as it can become quite a large amount of money, speak to HMRC and see if you can move to a monthly return.
Step 6 - Payroll
Payroll is often seen as one of the dreaded duties of any business with staff.
It is a complex area, especially for those with staff who work part time or if hours are different each week. Furthermore, the regulations and HMRC requirements are quite strict. There are endless deadlines to meet and forms to fill in.
The complexity of it often depends on whether running a weekly, fortnightly or monthly payroll. My suggestion is to do it monthly as this will save you time and money. And it sits nicely with the monthly checklist jobs!
Using correct software is key here. If you are not outsourcing your payroll, I would strongly recommend to look into this, as again it will save you time and allow you to spend more time working on your business not in it.
The monthly checks depend on the size of your business but normally will include:
- setting up new starters and processing leavers and making sure both are paid correctly and the correct information is passed on to HMRC.
- making sure that holidays, sick periods and other absences are recorded correctly.
For me, payroll is the most important task of the month as people are depending on their pay and it’s not only your members of staff, but their families too. So, again, I would strongly recommend talking to a specialist and making sure that things are being done correctly and in time.
Step 7 - Review your figures
Step 7 is one not to be missed! I know you are busy trying to run a business, but taking the time to run a few reports or, at least, taking the time to look at your profit and loss statement for the month is where the magic happens.
You will get an accurate view of how your business is performing and it will help you make informed decisions for the coming month. Ideally, you can also compare the figures with your goals and business plan to see if everything remains on track.
Choose three things to concentrate on in your business finances at any one time – this is key.
It could be anything from increasing sales; reducing costs or overheads;stabilizing wages bill so that they are more consistent, and increases are matched by increased sales, reducing wastage or stock levels, etc.
Identifying the important things to your business is key and that is what will make the biggest difference in the long run, as you can measure improvement – all with the help of the monthly information you are gathering.
Month by month support
With a helpful checklist and relevant templates, most business owners can do month end checks without it becoming too much of a chore. However, if you do want support with steps 1-6, plus want some fluency in extrapolating your figures to help you make more strategic decisions, as in step 7, then please get in touch.
It is proven that tasks that are no fun for us take much longer to do and make us miserable just thinking about them. Therefore, outsourcing tasks that are time consuming, boring and you are not very good at can actually be cheaper in the long run.
I can do the admin bits, set up the systems and create bespoke reports for your business, while you make sure your business is growing and customers are happy.
While this blog aims to provide helpful information, it’s important to remember that every business and person is unique. So, before making any decisions, we highly recommend seeking professional advice. We want to ensure that you have all the support you need to make the best choices for your situation!