A new restaurant owner hired SK Accountancy for bookkeeping services. It had come to Sam and his team’s attention that the business revenue was good but the bottom line was poor. The restaurant owner felt that he could have earned more as the business was good. His customers like his restaurant!
After a detailed review of his financial reports, our team had found out that his labor cost was too high when compared to his sales. He was puzzled as there was no way to cut the headcount of his staff as everyone was busy already. How could he further reduce the labor cost? Our team then reviewed the details of the payroll and found out that he could cut the overtime pay. He had been paying a lot of overtime as his staff were working long hours.
We then suggested him hire more part-time people to work on different shifts so as to reduce the overtime pay. By adopting our advice, he found that his team is more energetic. More importantly, his business is more profitable now. He is grateful to our ratio analysis to help me grow the business!
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