The following financial checklist will guide restaurants as
they adjust to operating under new circumstances.
1. Comprehensive financial data
It’s vital for restaurant owners to maintain timely and precise financial data.
Consider the following:
o Monthly, even weekly reports will be key in accessing government
funding, managing cash flow, and pivoting operations.
Ensure financial data is accurate and can be used to drive important decisions
Maintain accurate, timely, and current books
Evaluate how operational changes will impact finances
o Capacity constraints
o 3, 6, or 12 month forecasts in anticipating future cash flows
o Deferred payments coming due, such as taxes, rent, royalties, and
loan payments
o Ability to take advantage or extend vendor payment terms
o Options for covering shortfalls
Based on cash flow analysis, review how much staff should be rehired or
retained. Involve advisors, including your accountant, banker, and investors
in developing forecasts, considering:
Cash flow
analysis
sample
If you are struggling with anything on this checklist, let us help you reposition your restaurant for the future.
BDO can help manage the rebuilding phase.
Sample Cash Analysis
The restaurant in this example experienced a loss of sales in April due to COVID-19. The owners pivoted their strategy quickly and were able to increase sales as customers grew tired of cooking
at home. Third party delivery apps are taking a large portion of sales (15%), which arguably could increase to 20%.
Despite a strong increase in sales while taking advantage of government wage subsidies and GST/
HST deferrals, payment requirements will burn cash with deferrals coming due in June and result in
a negative cash position in July. This is despite significant increases in sales each and every month.
Opening Cash
Operating Inflows:
Sales Deposits
Operating Outflows:
Labour Costs
Food and Beverage Purchases
Third party delivery app fees
Rent
Royalty and Ad Fund Payments
Equipment Leases
Repairs and maintenance
Supplies
Advertising
Utilities
Other
Other Items:
GST/HST on Sales
Deferred Amount (GST/HST)
Wage Subsidies Received (CEWS)
Canada Emergency Business Account (CEBA)
Net change in cash
Closing Cash
April
100,000
10,000
33,000
30,000
15,000
12,000
8,000
2,500
2,000
3,500
2,000
3,000
4,000
-13,000
13,000
15,000
40,000
40,000
50,000
33%
30%
15%
12%
8%
3%
2%
4%
2%
3%
4%
-13%
13%
15%
40%
40%
50%
May
115,000
50,000
37,950
34,500
17,250
13,800
9,200
2,500
2,000
3,500
2,000
3,000
4,000
-14,950
14,950
16,000
-
1,300
51,300
33%
30%
15%
12%
8%
2%
2%
3%
2%
3%
3%
-13%
13%
14%
0%
1%
51%
June
130,000
51,300
42,900
39,000
19,500
15,600
10,400
2,500
2,000
3,500
2,000
3,000
4,000
-16,900
-27,950
17,000
-
-42,250
9,050
33%
30%
15%
12%
8%
2%
2%
3%
2%
2%
3%
-13%
-22%
13%
0%
-33%
9%
July
145,000
9,050
47,850
43,500
21,750
17,400
11,600
2,500
2,000
3,500
2,000
3,000
4,000
-18,850
-
-
-
-32,950
-23,900
33%
30%
15%
12%
8%
2%
1%
2%
1%
2%
3%
-13%
0%
0%
0%
-23%
-16%
2. Staffing
How will you adjust staffing levels accordingly as you rebuild? Staffing is traditionally one of the major costs to a franchise restaurant’s operations. Ensure you are optimizing as you rebuild:
Based on cash flow analysis, analyze how much staff you should rehire
or retain
Based on changes in traffic patterns, as you rebuild, prepare a plan for
tackling fluctuations
Develop a communication plan for your staff
Update your policies and procedures to ensure the safety of staff
and patrons
Ensure you can manage payroll properly with ongoing changes
If you are struggling with anything on this checklist, let us help you reposition your restaurant for the future.
BDO can help manage the rebuilding phase.
3. Inventory
Restaurants should track and review inventory levels on a frequent basis. Regularly conduct the following checks:
Review inventory levels
Analyze and re-negotiate payment terms and lead-time with suppliers
Re-assess inventory levels and consider paring back menu items to adjust
inventory requirements as you rebuild
Project anticipated sales of inventory items
If you are struggling with anything on this checklist, let us help you reposition your restaurant for the future.
BDO can help manage the rebuilding phase.
4. Operations & Technology
While you may have pivoted some of your operations, you need to consider how you will operate going forward:
Consider whether you will maintain any operational additions, such as
grocery or delivery
Key steps and systems needed to rebuild (supply chains, staff, etc.)
have been established
Leverage technology, if possible
Continue relationship with food delivery service providers
(Uber Eats, DoorDash)
If you are struggling with anything on this checklist, let us help you reposition your restaurant for the future.
BDO can help manage the rebuilding phase.
We can help you rebuild. Learn more.
The following financial checklist will guide restaurants as they adjust to operating
under new circumstances.
Comprehensive
financial data
It’s vital for restaurant owners to maintain timely and precise financial data. Consider the following:
o Monthly, even weekly reports will be
key in accessing government funding, managing cash flow, and pivoting
operations.
Ensure financial data is accurate and can be used to drive important decisions
Maintain accurate, timely, and current books
Evaluate how operational changes will
impact finances
o Capacity constraints
o 3, 6, or 12 month forecasts in
anticipating future cash flows
o Deferred payments coming due,
such as taxes, rent, royalties, and
loan payments
o Ability to take advantage or extend
vendor payment terms
o Options for covering shortfalls
Based on cash flow analysis, review how much staff should be rehired or
retained. Involve advisors, including your accountant, banker, and investors
in developing forecasts, considering:
Cash flow
analysis
sample
Sample Cash Analysis
The restaurant in this example experienced a loss of sales in April due to COVID-19. The owners pivoted their strategy quickly and were able to increase sales as customers grew tired of cooking at home. Third party delivery apps are taking a large portion of sales (15%), which arguably could increase to 20%.
Despite a strong increases in sales while taking advantage of government wage subsidies and GST/HST deferrals, payment requirements will burn cash with deferrals coming due in June and result in a negative cash position in July. This is despite significant increases in sales each and every month.
Staffing
How will you adjust staffing levels
accordingly as you rebuild? Staffing is traditionally one of the major costs to a franchise restaurant’s operations. Ensure
you are optimizing as you rebuild:
Based on cash flow analysis, analyze how
much staff you should rehire or retain
Based on changes in traffic patterns, as you rebuild, prepare a plan for tackling fluctuations
Develop a communication plan for your staff
Update your policies and procedures to ensure the safety of staff and patrons
Ensure you can manage payroll properly with ongoing changes
Inventory
Restaurants should track and review
inventory levels on a frequent basis.
Regularly conduct the following checks:
Review inventory levels
Analyze and re-negotiate payment terms
and lead-time with suppliers
Re-assess inventory levels and consider
paring back menu items to adjust inventory requirements as you rebuild
Project anticipated sales of inventory items
If you are struggling with anything on this checklist, let us help you reposition your restaurant for the future. BDO can help manage the rebuilding phase.
Operations &
Technology
While you may have pivoted some of your operations, you need to consider how you
will operate going forward:
Consider whether you will maintain any operational additions, such as grocery
or delivery
Key steps and systems needed to
rebuild (supply chains, staff, etc.)
have been established
Leverage technology, if possible
Continue relationship with food delivery
service providers (Uber Eats, DoorDash)