Growing up, my dad was the Vice President of Finance for a 36-unit, regional restaurant company in the San Francisco Bay Area. Amongst his many books in his home office, a tiny red book titled “Accounting Systems for Restaurants” sat quietly on his bookshelf. As a kid, teenager, and young adult, I ignored that book, having zero interest in accounting.
Fast forward a few years, and I completed my college work with a degree in Business Administration. I was steadily climbing the ranks at a restaurant company, and my professional curiosity grew as I learned more about the financial side of the business.
One weekend, while visiting my parents, I noticed the little red book on my dad’s bookshelf. I decided to grab it and thumb through its pages with newfound interest. As I read through it, I was surprised to discover that the same principles presented in that old book were the very principles we were using in my company. The book was written in 1962, and I was shocked to learn that, fundamentally, nothing had really changed in the way we account for expenses, recognize sales, express our Cost of Goods Sold (COGS), and define profit.
Sure, technology had taken over, replacing 13 column ledgers with slick accounting platforms and sophisticated Excel spreadsheets. But the information, at its core, remained largely the same. We all still evaluate sales, labor, and expenses against our budgets. We all analyze our COGS using the same tried and true formula.
My journey from initially overlooking my dad’s tiny red book titled “Accounting Systems for Restaurants” to later discovering its enduring relevance in the restaurant industry is a remarkable reflection of how certain fundamental principles stand the test of time. It’s fascinating to realize that despite the advancements in technology and the evolution of business tools, the core principles of accounting and financial management in the restaurant business have remained consistent.
As we all continue our professional journeys in the restaurant and hospitality business, this experience serves as a reminder of the importance of understanding these enduring principles, even as the tools and methods evolve. It underscores the value of learning from the wisdom of those who came before us. In an ever-changing world, some things, like sound financial principles, remain constant.