The Hidden Bookkeeping Secret Every Bar Owner Must Know

What if I told you there's a single bookkeeping secret that could save your bar thousands of dollars in lost revenue every month?

Many bar owners struggle with financial tracking and end up losing money through inventory discrepancies, mismanaged cash flow, and overlooked expenses. This episode reveals the fundamental bookkeeping practice that can transform your financial control.

In today's episode:

• Master the most crucial bookkeeping practice that successful bars consistently use 
• Learn how to spot and prevent profit leaks before they damage your bottom line 
• Discover a simple system to maintain accurate financial records without spending hours on paperwork

Listen now to unlock the number one bookkeeping secret that will help you take control of your bar's finances and boost your profits starting today.

Learn More:
Email Chris
Schedule a Strategy Session
Bar Business Nation Facebook Group
The Bar Business Podcast Website
Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'

Thank you to our show sponsors, SpotOn and Starfish. SpotOn's modern, cloud-based POS system allows bars to increase team productivity and provides the reporting you need to make smart financial decisions. Starfish works with your bookkeeping software using AI to help you make data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.
**We are a SpotOn affiliate and earn commissions from the link above.

A podcast for bar, pub, tavern, nightclub, and restaurant owners, managers, and hospitality professionals, covering essential topics like bar inventory, marketing strategies, restaurant financials, and hospitality profits to help increase b...

Transcript

Chris Schneider (00:01.89)
The shocking truth is most bars lose significant potential profits through poor bookkeeping and not following up on their bookkeeping. So today we are discussing a game changing daily routine that once you get used to it will take you only about 15 minutes. And this one bookkeeping secret could help you increase your profits in as little as 30 days.

Today we're diving into the most powerful bookkeeping secret that can transform the way you track profits, prevent losses, and make informed business decisions. Poor financial controls, which I've talked about a lot with you guys, are one of the leading causes of failure in our industry. I think that's pretty simple, right? Businesses don't fail if you have enough cash. Businesses do fail when you don't have enough cash. So when you don't have financial controls, it's almost impossible to succeed.

Providing guests with great drinks and amazing food and even world class service comes way more naturally to most bar owners than financial analysis and financial management. And so we're going to cover a simple daily thing that you can do that will transform your financial controls. And what is that thing? That thing is daily sales reconciliation.

And so what is daily sales reconciliation? Well, daily sales reconciliation is nothing more than matching your reports from the day and your accounting together and saying, okay, does everything work here? Is everything what I expected it to be? You really don't even have to do that much math. It's really not a hard thing to do. You just have to put in the time to make sure

that you're covering everything and you're double checking all the data that exists. And like I said, this will be annoying the first few times you do it, but once you get used to it, it takes about 15 minutes a day.

Chris Schneider (02:03.438)
So there's essentially five things on a daily basis for your daily sales reconciliation that I would encourage you to do. First, look at your POS reports and make sure your actual cash and card payments match what your POS says they should be. Now that sounds kind of dumb, especially if your POS system is doing your credit card processing, but you still need to check it. Maybe there's a fee there you didn't know. Maybe there was a charge back you didn't catch. So every day,

Match your POS reports with your deposit, which you should already be doing, but then also take the extra step and match what your POS report says your credit card should be with what's actually getting deposited into your account. And yeah, you might be looking two or three days behind for the credit card payments, but it's still something simple that you can do on a daily basis. The second thing you should do as part of your daily sales reconciliation is to verify void and comp.

Look at those reports. What did you avoid yesterday? What did you comp yesterday? Why did you avoid those things? Why did you comp those things? Does something look out of line?

You will know it's your bar. You know what your comp should look like. You know what your void should look like. But you have to spend the time to actually look at them and make sure that there is an abuse happening. And sometimes you might look at it, and this happened to me before. When I've looked at comps or voids or something, I've gone, know, it doesn't seem wrong, but it doesn't quite seem right. And I'm not sure what I think about what's going on here. And in those cases,

What I would encourage you to do is note it and see if you recognize a pattern. When people are stealing, and I hate to act like employees steal all the time, but let's face it, it happens more often than we want to admit.

Chris Schneider (03:57.698)
You'll start to see patterns and generally when people start to commit theft against a business, they do it a little bit at a time, just a little here and there, but then they'll escalate the speed at which they are committing theft as they realize they haven't gotten caught.

So if something looks weird today, it, and then see if it looks weird tomorrow or next week. And once you see a pattern, you know you have a problem.

The next thing I want you to do as part of your daily sales reconciliation is check your clock ins and clock outs in your labor.

Chris Schneider (04:37.314)
Now, I will tell you there's an episode that will be coming out in a couple of weeks with a guy named Sejoy who runs a company called GM Pilot. This is all he does is work on labor discrepancies for large chains. And we have a very detailed conversation about labor. But for the purpose of today, make sure that when people clocked in is when you expected them to clock in. When people clocked out is when you expected them to clock out. That when you expect people to take a break, they took a break. Or when you expect

people not to take a break, they didn't take a break. Just look for those simple things on a daily basis.

Now, once you've looked at those three items, what do you need to do? Well, as I mentioned before, documenting discrepancies or abnormalities. Make sure that you're looking at those, not just what's weird today, but is what's weird today the same thing that was weird a couple days ago? And then create standardized daily checklists so that you do this every day. You record it the same way. It's a really simple process, but...

Standardize your process and this can look like a lot of different things. You know, personally, I do everything digitally. So I would just have a Google folder and I would have a doc every day or a spreadsheet every day. Hey, here's the reconciliation. Or maybe I just use a sheet and I do the reconciliation every single day in the same sheet. But however you want to do that, whether it's digitally or on hard copy paper or just a notebook where you write this stuff down, I don't really care. But create a standardized way of doing it.

create a checklist every day that you follow so you can train your managers how to do this too. And that will make sure that your cash, your cards, your voicing comps and your labor is basically where it should be. So how do we implement all this? Well, the first thing I will say is schedule the time. Now, frankly, my brain does not work. I don't know about the rest of you guys. My brain does not work well after a long shift.

Chris Schneider (06:37.71)
I've been running food. I've been busing tables. I'm tired. My feet hurt. I don't want to do finance stuff at the end of the night. So I would do this first thing in the morning when I come in. But some people love doing things like this at the end of the night. So wherever that falls for you.

Chris Schneider (07:00.27)
Schedule a 15 minute block in your day, either at the beginning or the end, to do this type of reconciliation. Like I said, develop that checklist so you have a standardized way you do it every day and make sure you do it over and over again that way. Your numbers should always tie out. And when I say tie out, what I'm really saying here is that the amount of credit card deposits you get should match the amount of credit cards that you're expecting from your POS system.

When people clock in and out and when their breaks are and your labor representatives should match what you forecasted, what you've scheduled. So they should always tie out. I personally, again, I like to use digital assets to do things like this, things like Google Sheets, because then I can put all the data in there and run that data and analyze that data and understand that data easier without necessarily having to look at everything and do all the math myself every day.

Chris Schneider (07:58.616)
But however you set this up, you can do this in a very complex digital way. You can do this again in a very simple, in a notebook style way. That's up to you.

do it. So now what do you want to avoid in doing this? So what are our pitfalls that will prevent us from getting the results we want in a process like this? The biggest one is not doing it every day. Every day you're open, you should reconcile. And the reason why you should reconcile every day you're open is just to make sure everything is exactly where it should be. That you're not missing money, that people aren't abusing your clock, that people aren't abusing your voids and comps.

Chris Schneider (08:38.112)
Second big pitfall is ignoring the small discrepancies, right? A half a percent discrepancy that continues always is a problem.

Chris Schneider (08:50.606)
The next pitfall you want to avoid? Failing to document. When you document or when you fail to document, you can't see the patterns. So this is all about recognizing patterns in discrepancies and abnormalities. And then when you change something to try to fix that problem, you need to document what you changed. And quite frankly, one thing you want to avoid, and this is really tempting and I get caught in this trap quite a bit, you don't want to change too much at once. You want to just change

one thing, give it some time, see how that one thing impacts your data, and then change the next thing.

Chris Schneider (09:29.272)
So I would encourage all of you to start doing a daily sales reconciliation. And if at a minimum, look at your POS reports, do they match your actual cash and card payments? Do they match your deposits? Does everything there tie out? Did you verify your voids and comps? Look through them, understand them, and nothing seems abnormal. And make sure you check your clock ins and clock outs, your labor percentage, and ensure that your labor is about what you expect it to

Your daily sales reconciliation is one of your most powerful tools for financial control. It is a 15-minute routine that can prevent loss and help you make better business decisions.