Posted by: The Ellis Team

Accountancy tips for the hospitality sector

The hospitality industry has been through some turbulent times in recent years. From pubs and restaurants to hotels, bars, and tourist attractions, those in the industry were disproportionately hit by the pandemic.

Since then, hospitality businesses have faced new challenges such as rising energy prices and higher food costs, not to mention their customers having less disposable income due to the rising cost of living.

It’s tough out there and with many in the sector calling for support from the government in the form of a VAT cut for the industry, it is time for hospitality businesses to take stock and make sure their accounts are in order.

So, what can hospitality business owners and managers do? Here is some advice on putting your business in a strong and healthy financial position in 2024…

Get clear on your costs

With price fluctuations this can be difficult, but having clarity on costs in a hospitality business is crucial.

It will help with pricing and inform important operational decisions which can impact on the bottom line. For example, understanding the cost of staffing each shift can help with decisions on opening days and hours to ensure a business is open when it is most profitable and, just as importantly, is closed during the times when it is likely to run at a loss.

Enlist support

Long hours, distractions, staffing shortages and the seasonal nature of hospitality can all contribute to accounts falling by the wayside. Make them a priority! If you need support (either external or in-house) to do this, then put that support in place as soon as possible.

Seek professional advice 

If you don’t already have a professional accountant looking after your business and its finances, then now might be the time to think about hiring one. What feels like an additional expense is an investment in clarity.

A good accountant will do more than manage your accounts. They will help with business planning and give advice which is based on solid financial information.

At Ellis & Co we help our clients to understand where their business is and how the future looks. How it is performing currently and where the opportunities lie. It is about supporting our clients to achieve their business goals through working closely with them as an extension of their in-house team.

This can be absolutely crucial for independent hospitality businesses and smaller companies, particularly where they may not have an in-house finance team or much experience in bookkeeping and accountancy.

As accountants, we often see things from a different perspective. Our insights mean we can offer subjective, informed advice. We can help businesses understand their cash flow and how to manage it as well as to understand the risks and opportunities they face.

Put systems in place 

Businesses in the food and drink sector often deal with a high volume of transactions. Keeping accurate and timely records will save work and frustration in the long run so putting the right systems and processes in place is key. This might mean new accounting software and staff training to ensure everyone understands their role in maintaining accurate information. 

Outsource time-consuming tasks 

Outsourcing tasks like payroll, bookkeeping and VAT returns can save valuable time and give you peace of mind that they have been completed accurately. 

Finding the right support 

If you are looking for help or support with your accounts, look for an accountancy firm with a good understanding of the hospitality industry, its regulations and compliance requirements. Check they understand businesses like yours and appreciate the challenges you are facing in the current market.

The team here at Ellis & Co have vast experience supporting hospitality businesses to grow and achieve their goals. We would love to discuss how we can help you to do the same in your business. Get in touch by completing our contact form or calling 01244 343 504.

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