Accounting Software for Restaurants

financial statements
financial health

An experienced accountant can also help you navigate the loan application process, which includes preparing financial statements and a business plan. If you’re like many other restaurant owners who have their hands full with creating a culinary experience unlike any other, it can be hard to manage finances. Let FinancePal help make your dream a reality by handling your accounting and financial responsibilities for you.

While they are often used interchangeably, there are actually differences between how to calculate sales tax and bookkeeping. They are related because bookkeeping lays the groundwork for accounting, but these processes serve different functions. With the ability to slice, dice, and drill into that historical data, you can identify underlying trends in different datasets. For example, cross-reference sales by menu category to determine the best time to run a half-price appetizer promotion. Knowing your net profit margin helps you make decisions about growth, expansion, investors, and even selling your business for what it’s really worth.

What is restaurant accounting?

She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about travel, food, and books for various lifestyle publications. Automating your restaurant’s bills allows you to monitor exactly when the next bill is due. By integrating A/P software, you’ll be able to link your business account with the application.

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Family Matters at Burke’s Waterfront Food Northern Express.

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Keeping up with accounts payable helps maintain good relationships with your vendors, since you’ll be paying those bill on time every time. While long-term trend analysis is important, you should also log revenue reports on the daily and weekly. You can also use your revenue reports to show you how to set realistic sales targets and evaluate operations.

Review Your Profit and Loss Statement Daily

In 2007, Park East was formed to provide exceptional bookkeeping services in the Greater Cleveland Area. But your numbers to work to accurately predict your company’s financial future. Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. carriers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours. Managing your finances can be one of the hardest parts of running a restaurant – and also the deciding factor between success and failure. From creating cash-flow projections to applying for loans, overseeing the financial aspects of your restaurant can sometimes feel like a juggling act.

financial data

A restaurant owner should constantly monitor cash flow, which is the money coming in and going out of your restaurant. This includes making sure there is always an emergency fund set aside for unexpected expenses like equipment breaking and needing to be replaced. It’s important to have an overarching financial plan before you get started with restaurant bookkeeping. A financial plan will help you stay organized and track your financial progress and metrics. Restaurant costs come in all shapes and sizes, from food costs to labor costs and everything in between and understanding your overhead costs is key to managing your budget. For those who aren’t yet aware, Accounts Payable is the money you owe to suppliers and vendors for goods or services needed to run your restaurant.

Bookkeeping For Restaurants and Cafes

While daunting, learning what you need to know about restaurant accounting is not insurmountable. And when you do, you can reap the many benefits of finance-driven business decisions. Monitor key financial metrics such as profits, expenses and cash flow to gain insights into your restaurant’s financial health. Recording, approving and paying your vendors – also known as your accounts payable – is both time consuming and error prone, but it is key to maintaining positive relationships with vendors. Your sales data can be used to help you automate parts of your inventory management, updating inventory counts as food and drink items are sold.

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It’s a process with stepping stones that ultimately lead to federal and state obligations. It’s important to track payroll so you don’t miss out on important reporting deadlines and payroll tax obligations. Outsourcing payroll or using payroll software in the restaurant industry will take a load off of your shoulders. Calculating payroll in the restaurant industry can sometimes get a little tricky for a business owner who is dealing with multiple wages, employees coming and going, and irregular work hours. There are also benefits, insurance, and federal and state tax obligations to keep up with. A balance sheet spells out the restaurant’s equity, liabilities, and assets during a specified time frame.

By taking it off your plate, you can focus on making your restaurant the talk of the town. These tips are tailored to the restaurant industry, but there’s plenty more you need to understand about accounting processes. For a more general introduction to the basics of accounting, read our post on small business accounting tips.

When it comes to restaurant accounting, the chart of accounts categorizes the money you spend and receive. 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. Caryl Ramseyhas years of experience assisting in different aspects of bookkeeping, taxes, and customer service. She uses a variety of accounting software for setting up client information, reconciling accounts, coding expenses, running financial reports, and preparing tax returns.

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Another ratio many restaurants should consider is the prime cost, which aims to keep the cost of food + beverage + labor at roughly 60% to 65% of your total sales. Any account that gets a statement with a beginning and ending balance can be reconciled. Account reconciliation ensures that you are looking at accurate financial reports. As a business owner, you are at major risk by doing your own payroll. If you incorrectly file your payroll taxes or file them late, the penalties and interest you will be assessed can be quite large.

To do this, you can use a process known as the “Three Way Match.” First, look at your restaurant’s purchase order, then your receiving order, and finally, the vendor invoice. Make sure that what was ordered was fulfilled, and the amount owed is correct. Accounts payable is a bookkeeping process that handles paying invoices from vendors and suppliers, including food inventory. A locked down accounts payable process allows you to pay your bills on time and without error, so that your inventory shipments remain on schedule.

We save you money the moment you hire us by cutting out the expensive cost of hiring an in-house CFO. Restaurant financial reporting can be the difference between success and failure. Looking at profit and loss comparisons to previous periods and years will also give you some insight as to how things are going financially. Lastly, you’ll want to get the word out that you’re open for business. That may include newspaper ads and billboards, in addition to social media.

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If you want to automate all the above steps to create a daily sales journal in QBO we highly recommend taking a look at Shogo. We have been using Shogo for years to automatically create the daily sales journal from various restaurant POS systems to QBO. Most restaurant POS systems will have a daily sales summary built into them. If you need to customize the report to get more detailed information you will need to work through the customization with your POS system. You need to analyze how funds are hitting your bank and set up your restaurant bookkeeping system to mirror that activity.

Costs typically range from $11 per month for basic accounting features up to $459 per month for more comprehensive, automated systems. Some software includes payroll services, while others offer it as an add-on with monthly and per-employee costs. We chose it because of its ability to integrate fully with other systems. It is designed specifically for the industry with beneficial features for restaurant owners. It is affordable and easy to use, and its comprehensive platform can be used for any size eatery. With so many different moving parts, handling the bookkeeping for a restaurant can be complicated.

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Many of them offer tools to manage payroll taxes, track tips, and monitor attendance. Rather than trying to handle the books yourself or hiring someone to work internally, we recommend getting an outside bookkeeper. This wouldn’t be a full-time position, and they’re a separate person from your business accountant. Thus, they have no control over or connection to the daily ordering and sales in your restaurant. As an incentive for restaurants to report employee tips collected on the employee’s W-2, restaurants can claim a tax credit on their tax return equal to 7.65% of tips reported by employees.

If you are cutting checks for your bills you want to make sure to print checks from QuickBooks. This will automatically feed the payment information into your QuickBooks file, thus reducing unnecessary data entry. To start, learn how to enter bills and pay bills in QuickBooks; both are easy tasks to accomplish. You should see the information for your QBO account and can change any information through settings. One of the reasons we love connecting to QBO and to any restaurant POS system from Shogo is the steps and amount of time it takes. QBO has worked very well for all of our restaurant clients, so we recommend it 100% of the time.

  • This includes making sure there is always an emergency fund set aside for unexpected expenses like equipment breaking and needing to be replaced.
  • Keep your financial records organized by creating a financial filing system and creating digital backups of important documents.
  • Over 52% of restaurant owners reported that high operating and food costs are some of the biggest challenges they face in running restaurants.
  • Because restaurants deal with both front-of-house and back-of-house operations, POS integration options and reporting capabilities took center stage and were weighted most heavily.

When the staff receives these payments, they’re considered wages and are subject to withholding. Prepare financial reports for the General Manager, department managers, board members and the various committees. Including income statement, cash flow analysis, capital expenditures and executive summary information.

Using your restaurant bookkeeping to stay on top of your food cost numbers helps accurately track Cost of Goods Sold . Though paying employees may seem like a simple task, it’s actually very complex. Employee payroll is subject to regulation about tip reporting, state unemployment, payroll taxes, Social Security, and Medicare taxes. The level of liability for restaurant owners doing their own payroll can be high because filing payroll taxes incorrectly or late can lead to steep penalties. While certain restaurant-specific add-ons can help fill in the gaps when it comes to scheduling employees or automating the invoicing process, beware of integrations that require a third-party app. You might have to pay extra just to connect your POS and accounting systems — and that’s in addition to what you’re already paying for the POS system, accounting software and payroll software.

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