12 Expert-approved Restaurant Bookkeeping Tips

Many restaurants fail to leverage their financial statements, such as the profit and loss statement or cash flow report, to guide decision-making. Integrated systems, such as inventory management software, bring together various operational elements into a centralized platform. This integration enhances visibility into critical restaurant metrics, such as cost of goods sold (COGS) and gross profit, enabling precise cost control.

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• However, modern accounting software can also provide detailed information through the use of classes, locations, and tags without requiring an overly detailed and confusing chart of accounts.
• These issues, which I shared, became frustrating for teams during busy periods when quick access to the system is crucial for smooth operations.
• Even food trucks can gain a lot from systems like Flipdish, which can handle orders and customer relationships.
• Fixed costs remain constant regardless of your restaurant’s sales volume, encompassing expenses such as rent, insurance, and equipment leases.
• Food costs, the largest portion of COGS, include the purchase price of ingredients.
• We offer our toolkit of financial intelligence that will be your greatest asset for business growth.

Understanding local tax codes, such as the Internal Revenue Code (IRC) in the U.S., ensures proper management and compliance. Calculating payroll taxes in the restaurant industry can be tricky for a business owner. There are multiple wages, employees coming and going, and irregular hours. There are also benefits, insurance, and federal and state tax obligations to stay on top of. A daily sales report is a report of all the money you took in for the day. It also shows the payment methods used, which is handy when reconciling your accounts.

Track accounts payable and receivable

I didn’t have to constantly check task statuses—it was all available in one place. This eliminates the need for constant supervision, which can be a game-changer for maintaining operational efficiency and ensuring everything runs smoothly. However, I found Tock lacking in areas like inventory tracking and staff scheduling. For restaurants seeking an all-in-one system, Tock might fall short, as it requires additional integrations to handle these operational needs. I appreciate Tock’s dynamic pricing functionality, which allows restaurants to adjust prices based on demand, special events, or peak times. This flexibility has been invaluable during high-demand holidays or weekends, allowing teams to optimize revenue by charging more.

Reconciling accounts keeps you aware of lost checks, incorrect deposits, or cash variances. Account reconciliation also catches accounting errors and keeps track of your transactions. Account reconciliation proves that you’ve accounted for all transactions – and that the amount of cash in your checking account is actually correct. Note that modern accounting software can automate account reconciliation. You and your accountant can use your P&L to review the total revenue and expenses of your business over a period of time.

• Understanding the roles and benefits of accounting and bookkeeping is essential for achieving that balance.
• You'll have to fill out a form with all your restaurant's information, including the name, location, and even a store code if you have multiple locations with the same name, like with a franchise.
• For small business owners and employers in the restaurant industry, financial literacy is not just an option; it's a necessity for sustainable success.
• Ensure that you keep all receipts and invoices organized and record your transactions accurately.
• For restaurants with complex revenue streams and cost structures, an effective chart of accounts enhances decision-making.
• However, the cash accounting method can still be a good option for smaller restaurants since it’s the easiest.

Why prime cost matters

Understanding common pitfalls and how to avoid them is essential for keeping your finances in order. For example, an online ordering system that syncs with your accounting and POS systems can automatically record sales, inventory adjustments, and expenses. It’s great that a customer raved about a dish, but what are the numbers telling you? Your POS can give you deep insights on best and worst sellers, menu sales trends over time, and your inventory status.

Should I Outsource My Restaurant Bookkeeping?

Another feature I’ve found incredibly useful is Tock’s integration with order management platforms and its capability to manage deposits or pre-payments for reservations. This has significantly reduced no-shows—a crucial feature for high-end restaurants or those with limited seating. One of its key strengths is that the system integrates with payment processing software and supports a variety of payment methods, allowing for a seamless transaction experience. This has been especially helpful in ensuring smooth checkouts for customers, even when dealing with different types of payments. Additionally, I found that some of the reports were difficult to customize. While the reporting system provides much useful data, its rigidity meant that tailoring reports to meet specific needs took extra time and effort.

It generates tax-friendly reports of deductible expenses to help with accurate tax filing. If you want to outsource receipt and expense management, Shoeboxed offers a free postage-paid Magic Envelope that you can fill with a batch of receipts and mail to their processing center. Restaurants can simplify their bookkeeping by using an app or outsourcing their receipt and document management to track expenses. By prioritizing these practices, restaurant operators can enhance their financial stability and proactively address challenges, positioning their business for sustained success. These documents highlight areas of success and those needing improvement, offering insights into metrics like gross profit and operational performance. Using automated systems to assist with account reconciliation reduces errors and saves time.

Recording restaurant sales is one of the most vital aspects of managing a restaurant’s finances. Modern solutions, such as bookkeeping for restaurant POS systems, automation, and integrated software, can significantly reduce errors and save time. Here is the ultimate list of restaurant business KPIs you’ll lose sleep over. Payroll is responsible for calculating and distributing employees’ paychecks.

Implement double-entry restaurant bookkeeping

Ensure that you keep all receipts and invoices organized and record your transactions accurately. For this step, it can be helpful to hire a bookkeeper to do this for you so you can focus on other parts of your business. Just like keeping track of orders, oven temperatures, and the right amount of salt, you have several things to track when doing accounting for your restaurant.