How To Master Restaurant Bookkeeping in Five Steps

Staying on top of your financial records and daily accounting allows you to grow and scale your business. The right tools and partners in place make it easier to focus on building great customer relationships to keep your restaurant running for years to come. The cost of goods sold represents the costs of making and selling your products at any given time, including inventory costs. It helps you understand how much you’re spending to make the food.

However, it helps to have a two- or four-year degree in accounting, finance or related discipline. Running a restaurant isn’t cheap, and most restaurateurs will require a loan at some point. There are several types to choose from, including short-term, business line of credit, and equipment financing. As the industry faces historic change, Restaurant365 is empowering owners and operators to meet their teams‘ needs and pay faster than ever. A controllable cost report gives you an idea of where the company spends its money, which potentially affects how much it will earn or if money is being lost. This is a statement of the company’s assets, liabilities and equity.

Fresh tips for your restaurant

Under accrual accounting, CoGS is recorded as inventory is used, not when the suppliers are paid. Because recording income ahead of expenses makes your restaurant seem more profitable than it is. To miskey numbers when you’re entering row upon row of data is also human.

While no defined average food cost percentage is defined, this range has been a well-known standard for US-based food operators. The improper posting of POS transactions and expenses is at the top of the list of common errors. Avoiding this mistake involves detailed training for any staff that works with the POS system and using the cash basis method for accounting daily. Here are some key ratios to consider when reviewing the financial statements of your restaurant, specifically your weekly and monthly income statements.

Key Restaurant Marketing Tactics to Attract More Customers

With B4R you can immediately tap into a ready-made restaurant accounting department without having to build one of your own. Every client is provided a dedicated controller („One-Point-of-Contact“) who is backed by a team comprised of full-charge bookkeepers and reconciliation specialists. We have decades of experience in restaurant bookkeeping and operations. We are impressed by the food, cocktails, local beers, service, and atmosphere that independent restaurants provide and strive to help them succeed.

Kelly is an SMB Editor specializing in starting and marketing new ventures. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners. Below is a sample bookkeeper job description that you can customize to meet the needs of your business.

How to Set up Accounts Payable

A restaurant bookkeeper oversees the finances and budget for the restaurant. Restaurant bookkeeping with accurate accounting records is one of the most important aspects if you want to run a successful restaurant. While accounting for restaurants can be arduous, it doesn’t have to be a daily struggle if you choose the right approaches. There is no better guarantee of a smooth tax payment period than efficient restaurant bookkeeping, which ensures an orderly flow of documents.

And when you understand your foundation, you can make impactful, long-term changes that add to your bottom line and help your business grow. Outsourcing your payroll is a surprisingly affordable option to ensure your accounting is consistent and reliable. By hiring a professional payroll service, you can not only ensure you are obeying regulations, but you can also save hours of your time every pay period. This automation replaces the need for manual data entry, automating general ledger entries and reducing the time and errors in your bookkeeping. With real-time financial information, you always have the most up-to-date information to understand inventory and labor data. This is a helpful bookkeeping process that verifies every transaction across your accounts so that your ending balance matches.

QuickBooks will help you stay ahead of backorders by sending you real-time notifications when it is time to order. While receiving the inventory, QuickBooks will convert that purchase order into a bill. Adding customer information and offering discounts can be done directly at thin e POS, saving you a great deal of time when it comes to accounting for discounts and other expenses. You do not have to pay per transaction for this credit payment processing software, which is excellent, especially for large companies.

We chose https://1investing.in/ Online as our runner-up because, while it isn’t designed specifically for restaurants, it offers an impressive lineup of features, including add-on payroll services. It’s also extremely easy to use for owners with no accounting or bookkeeping experience. We chose Restaurant365 as our best overall accounting software for restaurants because of its robust features, ease of use, and full integration with other systems.

The chart of accounts records high-level transactions like revenue, expenses, assets, liabilities,cost of goods sold, and equity. Each of these buckets is further categorized into smaller ones, such as meat costs, alcohol costs, staff wages, marketing, utilities, laundry, etc. Choosing accounting systems for restaurants can help you eliminate the difficulty with restaurant accounting and help you manage your food costs easily.

Accounting Treatment for Restaurant Spoilage

Your straight line depreciation is the money that’s left over after you’ve accounted for your COGs, labor, rent, equipment, utilities and all other operating expenses. Calculating prime costs help you spot where you can cut costs, increase efficiencies, and boost profits. You can’t run your business without staff, which means you need know they’re being paid accurately and on time. Mistakes on payroll can cost you your best performing employees – if not more. Keeping up with accounts payable helps maintain good relationships with your vendors, since you’ll be paying those bill on time every time. Your financial forecast gives you a rough estimate of how much revenue you’ll generate in the future.

With millions of users worldwide, your accountant will likely be familiar with it. 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. At the end of the day, accounting is all about getting the information you need to make smart decisions.

Looking at profit and loss comparisons to previous periods and years will also give you some insight as to how things are going financially. Now you can type in profit and loss or find it under the business overview section. You can attach your statement to the reconciliation in QBO to make it easy to reference. It will require an additional reconciliation of the Bill.com clearing account. You can then upload your invoices to Bill.com to allow your accountant to code them properly.

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. Over 52% of restaurant owners reported that high operating and food costs are some of the biggest challenges they face in running restaurants.

• It has tools for managing invoices, bank reconciliation, purchases, expenses, inventory, and more.
• Once integrated, the software can automate the collection and categorization of your financial transactions.
• Because restaurants have a high number of transactions, monthly bank reconciliation used to take hours or days for a restaurant manager to complete.
• Staying on top of the restaurant’s financial health can be achieved by reviewing its financial statements regularly.
• Accounts payable is the amount you owe vendors, etc., for the products or services they provide.

The bookkeeper may actually take the deposit to the bank to ensure that it arrives safely. Though not always inclusive, this should be informative enough to set you on your way to restaurant accounting success. The core function of a bookkeeper is to ensure that all bills are paid on time, transactions are recorded correctly, payroll runs on time and taxes are filed correctly. So if you’re looking to hire a bookkeeper, it is essential to create a bookkeeper job description that fills your recruitment funnel with ideal candidates as quickly as possible.