It’s hard to believe, it’s halftime in the year. There are certain things an operator should review when we get to this point. It is not too late to make adjustments to hit those final budget numbers. Here are some areas I suggest would have the most impact on your financial statements:
Conduct a full review at the end of the quarter with your management team to emphasize where you are performing up to budget and where you are not. Promoting dialogue as to how you can reach those targets in the next two quarters will help motivate and direct the management team. If you are working with an ownership group this is an excellent time to prep them for where you are headed this year.
This always makes everyone cringe but it shouldn’t. Take the top twenty-five items from your product mix and recalculate at current pricing what your costs are now. Make decisions regarding price increase at this point to see you through the end of the year. Check with your major purveyors on both food and bar items in regards to any anticipated increases.
Fill out a regular form 8027 to determine where you are in regards to tip reporting. Address issues with employees that are under-reporting to keep their declarations up through the end of the year. This is extremely important at this juncture as you can not go back on the reporting so far. You want to avoid any issues at the end of the year. Be sure to address secondary (indirectly) tipped employees, an area that’s always lacking.
Run a report on everyone who is eligible for vacation accruals to see where you are. If your policy has an accrual limit you should make employees aware that they have reached their limit. Use this information to carve out appropriate time off for staff that meets the needs of the business. It’s better to plan this out then to have everyone wanting their vacation before the end of the year.
Repairs and Maintenance
Mid-year is an excellent time to review what you have spent on repairs and maintenance. Review your maintenance logs to see where and on what equipment you are spending the most money. If major purchases are needed, it is often advantageous to purchase those items before the end of the year. Given that money is budgeted for those types of purchases and the depreciation will be helpful for your current year.
Circular 230 Disclaimer:
This article represents a general overview of tax developments and should not be relied upon without an independent, professional analysis of how any of these provisions may apply to a specific situation. Any tax information contained in the body of this article was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.
Author: Jean Hagan