11 Expert-approved Restaurant Bookkeeping Tips

Four-week periods, on the other hand, are always 28 days with four Fridays and four Saturdays. When you’re comparing accounting periods, you want to accurately compare revenue based on times that should be equally as busy. Restaurant accounting is also made up of essential bookkeeping processes that keep your business running. While you’ll most likely hire an accountant or bookkeeper to handle most of these processes, here’s what you need to know so you’re at least speaking the language. So here are the essentials of restaurant accounting and bookkeeping when it comes toreports, processes, and KPIs. Bookkeepers are more task-based and manage accounts payable, payroll, and posting journal entries.

They will be sorted, quickbooks payrolled and matched automatically, to help you stay on top of cash flow and plan ahead. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

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Compare your records against bank statements, credits cards and other financial transactions to ensure the records match. You’re checking to see if your transactions made it from the customer’s hand to the bank. A P&L statement is your guiding post to drive business decisions (when and where to cut costs, how to increase revenue, whether to change your business strategy, etc.). The chart of accounts gives you a sense of your restaurant’s financial health, so you know how you make and spend money. A daily sales report tells you how your business did that day, so you can compare with other days that week, month, year, or even year-over-year. It’s the thermometer you should check before making any changes – or patting yourself on the back after a hard day of work.

Here is the ultimate list of restaurant business KPIs you’ll lose sleep over. Payroll is responsible for calculating and distributing employees’ paychecks. Payroll also keeps a financial record of deductions, bonuses, vacation, sick time, and overtime.

Reconciliation

You should review your prime costs, CoGs, inventory counts, and labor on a weekly basis, not a monthly basis. These KPIs are controllable, but they can also easily get out of hand if not monitored. If you’re monitoring these figures on a weekly basis, you can patch any cost leaks without incurring too many damages. Restaurants have KPIs, reports, and business and tax structures that are unique to the restaurant industry.

Since your POS logs revenue coming in and much of the money going out of your restaurant , you can use it to analyze sales and costs. This method reports income as it’s earned and expenses as they appear. Under accrual accounting, CoGS is recorded as inventory is used, not when the suppliers are paid.

Sync your restaurant accounting software with apps that organize sales, employees, and back of house with less manual data entry. We looked at a dozen business accounting software systems and reviewed each for pricing, features, ease of use, integration options, and automation. We focused on those features that we considered the most important for restaurant owners to identify the best accounting software options for restaurants. Plate IQ is used by multiple industries, including restaurants, restaurant accounting firms, groceries, and hotels. DAVO was created in 2001 as a way to remedy pain points between the payee and the payor.

The result is either cash over or short – but in an ideal world, you’re at zero. The chart of accounts includes assets, liabilities, revenue, expenses, and owner’s equity. This chart can be broken down into subcategories that specifically tailor to your business. That way, each category can easily be monitored and compared to industry averages. Remember, a POS system and financial software will help you manage your financials more efficiently. With the right tools, you can easily track financial data, generate accurate financial reports and monitor restaurant performance.

Keep accurate accounting records

In particular, this is useful for restaurants with more than one location, as it makes management easier. Keeping track of financial transactions is the first step in bookkeeping, as it is essential for all bookkeepers. Using software such as QuickBooks, Excel, or a traditional ledger makes it easier to keep track of finances. The owner should choose a system that is very easy to use and understand, avoiding issues in the future. An establishment such as a restaurant has many moving parts that must be considered.

• Founded in 2015, ZipBooks is simple accounting software that can be used for any industry.
• However, QuickBooks has a variety of plans that offer different features depending on your business structure.
• Before we dive into our 5-step guide to restaurant bookkeeping, let’s take a minute to discuss why it’s important.
• These dedicated agents know the specific risks restaurant owners face, and can help ensure your business is protected with the right policies and coverage limits.

It is an iPad-based POS system built by restaurant owners for restaurant owners. The company’s primary goals are to make managing your restaurant easier, make more money, and deliver a positive experience to your customers. Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years.

Bookkeeping for Restaurants – The Need for Great Bookkeeping:

That said, running a restaurant or bar is fast-paced, demanding, and full of challenges that require thinking on your toes. Calculating prime costs help you spot where you can cut costs, increase efficiencies, and boost profits. Prime costs are one of the most important KPIs for restaurateurs. Prime costs account for all the costs required to produce and distribute your product. For every dollar that comes in, your prime cost is the amount of that dollar that goes to people and product . Your financial forecast gives you a rough estimate of how much revenue you’ll generate in the future.

We can help — SLC Bookkeeping is a certified QuickBooks ProAdvisor. There is no better guarantee of a smooth tax payment period than efficient restaurant bookkeeping, which ensures an orderly flow of documents. The importance of bookkeeping cannot be understated when running a restaurant business, and all of these reasons prove that it is an integral part of the business.

For example, if you own a small food truck business, your Accounts Payable would include food, supplies and equipment expenses. Before we dive into our 5-step guide to restaurant bookkeeping, let’s take a minute to discuss why it’s important. Not only is it essential for managing your business, but restaurant bookkeeping can provide valuable insights into optimising your business operations and maximising profits. It’s important to keep accurate records of every transaction in your restaurant so you can track spending, identify areas for improvement and manage taxes properly.

A cash flow statement shows you whether you’re able to generate enough positive cash flow to maintain or grow your operations or whether you should seek external financing. Choose an accountant that specializes in the restaurant industry. Because of this, they require specific accounting methods and benchmarks that wouldn’t apply to, say, a retail store. Restaurant accountants understand how to compile data accurately and meaningfully. They are trained to analyze your financials to identify operational shortcomings, cost leaks, and trends that require immediate or long-term action. Overhead is the monthly fixed rates that it costs to run your business.

Family Style Turn more tables and delight guests with a POS built for family style restaurants. Food Truck Turn long lines into large profits with a fast and reliable POS for food trucks. See how the restaurant industry is using technology to continually improve. Stories of how restaurants of all shapes and sizes succeed with Restaurant365.

You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. Prepare and report monthly, quarterly, semi-annual various state and federal government reporting. Our most basic service to help small businesses that fell behind and need to get caught up. Running a restaurant isn’t cheap, and most restaurateurs will require a loan at some point.

Additionally, it is also essential to watch out for any deductions that can be made, such as expenses related to your business that can be deducted. Budgets can be important factors in determining how well a restaurant can manage its finances. This is possible with a budget planning tool and allows you to identify areas where you can reduce the company’s costs for the future by using a program for future expenses.

And if you’re looking for a new POS or inventory app designed specifically for restaurants, you can choose from 50+ apps that work seamlessly with QuickBooks. Always know what’s going out, coming in, and when supplies are running low. Your first month with DAVO is free, and then it’s $49.99 per month per location.

Quickly access a profit and loss report that shows how much of each sales dollar you spend on each expense category. QuickBooks has the reports you need to quickly make smart decisions for your restaurant. Released in 2012, Restaurant365 is a cloud-based software solution designed specifically for restaurant owners. It offers a comprehensive platform to meet the needs of restaurants of all sizes, as well as owners ranging from beginners to experienced bookkeepers. Depending on the needs of your restaurant and the number of bills that you process, there’s a variety of A/P software programs that may be able to assist you. The best ones must have strong general A/P features, such as purchase order tracking and vendor payment tracking.