Restaurant Financial Management: Introduction to Accounting and Finance for Independent Restaurants by Mbengeranwa Allen

Author:Mbengeranwa, Allen [Mbengeranwa, Allen]
Language: eng
Format: epub
Publisher: Allen T Mbengeranwa
Published: 2014-06-13T16:00:00+00:00

Activities of the Independent Restaurant

It seems odd to formally describe what a restaurant does. The views may be different but it is essential to enhance the understanding of what is actually happening within the independent restaurant.

The day to day activities of the restaurant can be divided into operating and non-operating activities. The former includes the preparation and production of meals and sales of beverages as well as the service or delivery to customers of the Chef’s efforts in addition to the collection of payment for services rendered to the customers. Curiously, this may also involve interest on loans with other entities such as money in the bank or ninety-day money market payments.

The latter, although also important, seems not to involve the day to day bread and butter tasks but rather more to do with independent restaurant owner or manger decisions and activities such as investments and finance.

For an independent restaurant on a small to medium scale, investment activities include purchases or sales of assets including equipment in the form of new stoves or commercial blenders, land or buildings or as mentioned, money market type assets. it is highly unlikely however, loans made or paid to suppliers and customers also constitute this element of investment activity. It is not beyond the independent restaurateur to get involved in mergers and acquisitions by choice or otherwise. Once again, this is also an investment activity.

The second and final element of non-operating activities relates to financing activities. It is normal for the independent operator to require external help with the venture from investors or banks in the form of cash inflows. In the same light outflows of cash as dividends to any shareholders are also financial non-operating activities. Most of this activity appears to happen on the balance sheet of the restaurant and incorporates the nature of equity and long term liabilities of the entity .

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