How do you keep up all the expenses?

[pandandesign]

My dad owns a restaurant, and I help him since he's started his business. I don't mind helping my parents because family is important and it's part of my business too. Owning a business isn't easy and can be quite expensive than working for someone else because the more people he's hired, the more he's going to pay because there are insurance and employment benefits and etc. How do you keep up all the expenses in a business because there are a lot of bills to pay in order to keep the business going. I want to know how do you keep up all the expenses when the business isn't doing well? Do you usually have a plan to limit the spending or something?

[jfab]

Always have a good auditing of just about everything. It's also best that you handle the management of all the expenses like create a list or a budget so you don't overspend. Only buy what you need and never what you want. Focus on the immediate needs alone then worry on the other stuff later once the priority has been settled.

[owesem75]

I would suggest that you classify/categorize your expenses to recurring expenses, seasonal expense, optional expense, etc. You will be surprised to know that while there are expenses that you cannot avoid when running a business, it will also show you some other expenses that are actually unnecessary and can be avoided or removed. Also, you have to keep an always up-to-date inventory of your resources to maximize its use. Regarding human resources, you can maximize them by assigning them functions relevant to the position he was hired for. You can also maximize your restaurant space by selling extra services to non-restaurant clients. I mean, for example if you wish to decorate your dining area - one better way of doing it is to lease photo frames to other companies as an ADVERTISING space. You save on decoration and you get additional income to cover the payment for some big expenses too.

[delusional]

I just keep a ledger with all the income and expenses for every month. I also keep all the bills and at the end of the month I deliver everything to my bookkeeper. He will translate everything into the needed documents and make sure everything is balanced. It could be that he says he is missing a bill but that hasn't happened anymore in the last year. It's just a matter of discipline to keep everything together in one place.

[crimsonghost747]

Obviously the bigger the company gets the more expenses there are and the harder it's to manage them. If you are interested in this, maybe you could do all the financials for him so he can concentrate on running the restaurant?

As for preparing for a bad month or two, I'd always keep a decent amount of money as cash in the company. Say, something that can pay the expenses for a couple of months.

[fredkawig]

I suggest that you should account or codify all your earnings and losses either simply by writing it in your business books or professionally by hiring an accountant (or you could do it yourself). Based on your gross profit, deduct all the expenses that you incur in running your business and you come up with your net income. If the previous months or years of the business has a positive net income then that should be good as it can siphon the possible future net losses. The problem arises when all or most of the months in your records are net losses. Here we can see that your business in not doing well and it can lead to bankruptcy. As a businessman, I suggest that you check whether your business is doing well or is becoming an additional liability for your family.

[Yamabushi]

I'd also keep a spreadsheet where you can have all your expenses written out and contrasted with revenue.

[ap4aaron]

Keep a spreadsheet with your money at the top, and subtract and add to it based on profits/losses.

[hillaryNC]

Sounds like you need an accountant! They will know how to keep track of all these expenses and show you how to budget you money and see what expenses can be cut! Some expenses are un-needed! Maybe you can meet with someone and see what they have to say! Good luck!!!

[cpefley]

It just depends on how far you are willing to spend out of pocket to try and make the business succeed. Owning a business is somewhat like gambling, and some people lose everything. They dip into retirement, savings, or take out loans to make ends meet. Sometimes it pays off and the business flourishes.