Operational Accounting Helps Client Raise Net
We have a client who operates sandwich shops at multiple locations close to our Accounting Firm headquarters. For the past three years, they had experienced a steady decline in net profits, and distributions to the owners had almost vanished. They approached our firm seeking insight into how restaurants generate profit and to figure out their mistakes. This was just over a year ago, and the progress we’ve made since has been remarkable! Initially, we focused on understanding their products, finances, and overall business mindset. It turned out that their approach was misguided. Although their product quality was high, their prime costs were excessive, and food waste was significant. Their financial situation was disorganized, with a chart of accounts so convoluted it felt like a complicated course just to navigate it. It was unclear how they could identify their financial losses. Their business mindset was also flawed; they placed too much trust in long-term managers who weren’t performing well. Labor management was lacking, and accountability was absent. We took action! Our Operational Accounting package offered advanced consulting, ongoing financial analysis, and direct access to one of our expert accountants. Over the course of a year, we helped them manage their prime costs, tidy up their financial records, and enhance their understanding of the restaurant business. We successfully improved their net profit from -2.49% to 7.15%, despite a dramatic increase in sandwich meat prices due to COVID-related supply chain issues. They increased their distributions from 2 a year to 11. They reduced food waste, brought labor costs under control, and ensured their managers effectively understood and fulfilled their roles. We are more than just accountants; we are entrepreneurs. Learn more at https://www.verticesco.com/