How to succeed with catering bookkeeping

If you run a catering business, you’ll need to spend time on bookkeeping like any other business. This can be tricky, especially if you have more experience with the catering side of your job instead of with accounting or business management. That said, there are a few ways you can make catering bookkeeping easier.

This article will advise you on how to succeed with catering bookkeeping, whether you run a new business or a well-established company. We’ll cover a variety of accounting tips, including:

• Decide how you’ll take payments
• Track your cash flow
• Record expenses carefully
• Use budgeting
• Make catering bookkeeping easy with Countingup

One of the most critical aspects of doing the accounts for a catering business is analysing your income. As such, you should pick a preferred method for receiving payment not long after you start your business. 

You might change this method in future or add additional options for your clients, but it’s important to have a primary way of receiving payments as it helps simplify your bookkeeping. If your income comes from different sources using different methods, it can be difficult to keep track of.

Sending an invoice to a client after their event is one of the most common ways caterers receive payment. Invoicing can be tricky if you don’t have any practice, though, and you may end up making any number of common invoice mistakes. If you have a hard time with invoicing, consider downloading the Countingup app to help.

Countingup’s invoice system is quick and easy to use. Once you’re in the new invoice screen, all you need to do is enter the client’s details, the services you provided, and the payment date. Afterwards, you can send the digital invoice off with a single tap.

One of the most important things to remember when doing accounting for any catering or small food business is that you need to monitor your cash flow. This is because cash is necessary for your business to continue running. It allows you to purchase ingredients, rent any equipment and ensure you can continue to produce food.

Cash flow refers to all the money coming into and going out of your company. For example, all the supplies you purchase and invoices your clients pay make up part of your cash flow. It’s best to maintain a positive cash flow, which means that your income is higher than your outgoing expenses. 

Keeping an eye on your cash flow is essential because it has an enormous impact on your business decisions. For instance, your cash flow may dip if you need to invest in new cooking equipment. If you don’t monitor your cash flow, and purchase an expensive new oven, you may find you don’t have enough money to cover the operating costs of your business. 

As a caterer, you’ll have a considerable number of business expenses. You might have a vehicle that you use to transport food to your clients, which you pay to fuel up and maintain. Alternatively, you might need to pay for the rent on a kitchen that you use to prepare your dishes in. This is on top of the constant expense of buying ingredients for all of your clients’ orders.

An essential part of catering bookkeeping is recording these expenses. Since you’ll likely be buying ingredients frequently, there will be a lot of expenses to keep track of. Try to put a system in place for organising your expenses to ensure they’re easy to access in the future.

The primary reason to track your expenses is to claim them back as business expenses when filing taxes. For instance: if you earn £40,000 and claim £10,000 worth of expenses, you will only have to pay tax on £30,000 of your earnings. 

Claiming business expenses can reduce your tax bill greatly, so remember to look into the range of business expenses you can claim while doing taxes. If you operate your catering business out of your own kitchen, remember that there are also expenses you can claim while working from home.

You may already be familiar with budgeting, as you’ll likely have put together a budget for starting your business. This is by no means the last budget you’ll make, though. If you’re in the catering industry, it’s a good idea to create a budget for pretty much every new job you get hired for. 

This frequent budgeting is smart because of the number of different expenses you’ll have for each job. The obvious one is ingredients, but there may be equipment you need to make specific orders, and there will be various bills attached to packaging and transporting the food once.

For the most part, you’ll weigh these expenses against the payment you’re expecting to receive from that particular job. That said, you should also take into account the financial state of your whole business every time you create a budget, just in case you overspend and have to dip into funds that you’re planning to spend elsewhere.

Starting a catering business is a demanding career path: as well as having a high level of cooking expertise, you’ll also need a keen understanding of business and financial management. If you find yourself struggling with the accounting tasks involved in running your catering company, consider using the Countingup app.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Click here to start your three-month free trial today.