Restaurant Bookkeeping Tips

Restaurant Bookkeeping is not an easy task and definitely not a beginner’s job. A restaurant operator is aware of basic accounting principles, but restaurant bookkeeping requires extensive accounting knowledge which is related to coding invoices and formatting financial statements. 

An established bookkeeper is fundamental to guaranteeing restaurant success and ensuring the business operation runs smoothly. Restaurant Bookkeeping highlights the sources of income and mentions where the revenue is being used up. Bookkeeping helps in recording, organizing, and maintaining financial records. 

Besides, restaurant bookkeeping is different from other industries because it needs to track the results of ad hoc decisions, loyalty programs, and increases in hiring during peak times. All these factors incur more transactions, and hence, restaurant bookkeeping reports require daily or weekly versions to keep a tab on everything. To streamline these processes, businesses often turn to Restaurant Management Software, which helps automate and simplify the tracking of financial data and operational tasks.

Does restaurant bookkeeping look challenging? In this blog, we will share all the bookkeeping tips that will simplify the operations. 

Key Elements of Restaurant Bookkeeping

The main task of restaurant bookkeeping is recording daily sales, catering fees, and inventory, cash flow, and expense management. Let’s understand the key elements of restaurant bookkeeping.  

1. Sales Tracking

Your restaurant’s POS system is crucial to maintaining all kinds of accurate sales records. It involves choosing a design that integrates with your accounting software to automate data entry and reduce errors.

2. Expense Tracking

It involves handling the following supplier invoices and receipts, managing staff expenses through accurate data capture, and conducting monthly and quarterly financial analyses.

3. Payroll Management

Efficient payroll management is essential for ensuring employees are paid accurately and on time. This further helps you maintain detailed records of wages, tips, and tax withholdings.

4. Inventory Control

Proper inventory control helps in tracking stock levels, reducing waste, and optimizing purchasing decisions. It involves regular inventory counts, monitoring usage patterns, and using inventory management software to maintain accurate records and forecast future needs.

5. Profit and Loss Statements

Profit and Loss statements help analyze revenue trends by tracking key metrics like overall sales, average order value, and customer traffic. They also give a reality check between the set budget and actual costs and calculate other metrics, like food cost percentage, labor costs, and prime costs. 

Best Practices for Restaurant Bookkeeping

Restaurant bookkeeping best practices can help owners track critical restaurant KPIs and find those marginal gains that help their business flourish in a competitive industry. Now, let’s look at the best practices to ace restaurant bookkeeping and improve the process.

Prioritize Accuracy

The accuracy of a restaurant’s financial statements is crucial, especially for businesses legally required to submit them to local authorities or even the federal government. 

That is why you must ensure that the bookkeeping process is conducted accurately. This makes your job easier when preparing financial statements and taxes.

The more accurate the restaurant bookkeeping data, the better insights you can expect from its respective financial reports as you plan for the future. You can outsource restaurant bookkeeping if you want to save your money and get accurate reports and results from a professional and experienced bookkeeper. Additionally, focusing on accurate bookkeeping is a key step in learning how to improve restaurant operations management, ensuring smoother day-to-day operations and more informed decision-making.

Hire or Outsource a Bookkeeper

Hiring a bookkeeper for your restaurant often proves a game-changing choice. It often means you can concentrate on other important tasks instead of crunching numbers after dinner service. Many restaurant owners even choose to outsource bookkeeping or use payroll services. You can choose this practice, too, to maintain your finances accordingly. 

Use the Right Restaurant Accounting Software

Restaurant accounting software is the latest technological necessity that automates much of the bookkeeping process. Select accounting software that integrates with other systems to boost bookkeeping speed and accuracy. You can also go for a cloud-based system that ensures all the restaurant’s financial data is in one place and can be accessed from anywhere.

Identify Prime Costs

Food costs can fluctuate frequently despite the fact that your restaurant buys from a source or a distributor. The fluctuation often happens because of agricultural conditions, transportation issues, and inflationary pressures. That is why it is necessary to undergo thorough restaurant bookkeeping to manage all your prime costs. This involves providing an accurate record of different purchases and financial data. 

Use the Financial Reports

The financial reports produced from restaurant bookkeeping information enable you to review or act upon them. For example, the daily sales report may show the plummeting of certain sales. This enables you to analyze whether it is time to lose such food items from the menu. 

You can either employ a third-party bookkeeper or accountant to handle the financial reports or examine them yourself. This enables you to look for loopholes and eliminate them as soon as possible for enhanced business growth. 

Ask for Help

Despite being a competitive sector, the restaurant industry enables you to learn many things. This involves understanding the bookkeeping practices, too. You can learn this tips from your peers who work in the same sector. 

Ask them to talk about the mistakes they made earlier and the strategies they devised to overcome the same. The next thing to do is discuss with an experienced chef who can inform you more about the payroll process. 

You can seek help from bookkeepers and accountants who have been in the business for a very long time. Make sure you talk to someone who has already worked in the restaurant industry. 

Which Tools and Software are Best for Restaurant Bookkeeping?

You can find several tools and software online that help with the restaurant bookkeeping process. The common ones include: 

1. Mesha

Mesha is a accounting software that proves to be beneficial for global restaurant businesses and accountants. It automates all your accounting and bookkeeping tasks to help you save time. 

Its key features include:

• The platform manages accounts receivable (AR), accounts payable (AP), taxes, and compliance for multi-entity businesses. 
• It has powerful integrations with more than 9,000 banks, payment gateways, commerce sites, payrolls, cards, and customer relationship management (CRM) systems.
• The AI-powered software handles the financial reports of any restaurant business effectively.

2. Quickbooks

It is cloud-based accounting software for small businesses and freelancers. The software enables you to simplify financial tasks and streamline invoicing, time management, and expense tracking. It suits the needs of all restaurants seeking to organize their financial management efficiently.

Here’s the list of key features:

• It offers a range of features to streamline the accounting process.
• It allows to create of professional-looking invoices and automate recurring billing
• It offers time-tracking services for service-based businesses.

3. Xero

Xero is another cloud-based accounting software for small and medium-sized restaurant businesses. The platform is known for the following key features. 

• It offers you a user-friendly interface and accessibility. 
• It emphasizes automation and real-time data synchronization. 
• Xero helps you streamline your restaurant’s financial tasks, enabling you to manage your finances efficiently from anywhere.

4. Oracle

Oracle accounting software solution helps you streamline financial processes. It provides a wide range of accounting features, like general ledger management, financial reporting, budgeting, and cash flow management.

It offers the following features.

• The software provides real-time insights into your restaurant’s financial health. 
• It supports advanced automation capabilities, like automated journal entries and reconciliation processes.
• The software even supports multi-currency transactions so that you can cater to your international guests easily. 

5. Restaurant 365

Restaurant365 is an accounting software program that combines restaurant management tools with bookkeeping. Here’s the list of features that it offers to the users. 

• You can use various tools like invoicing, ordering, and staff scheduling. 
• The software enables you to integrate with another payroll company. 
• It can also collaborate with various vendors, POS systems, and financial institutions for automated banking reconciliation. 

6. TouchBistro

It is an iPad-based POS system for restaurant owners. Here are the key features that the software offers to the users. 

• The software aims to manage your restaurant easily and even deliver a positive experience to your customers. 
• You can integrate it with other payroll companies. 
• It is usually known for providing in-depth accounting services for your restaurant business.

Comparing the Tools: Pros and Cons

The following table compares the above tools, their benefits, and cons to give a brief idea of what tool or software is best for your business. 

Common Restaurant Bookkeeping Mistakes to Avoid

There are some basic restaurant bookkeeping mistakes that you must avoid to ensure your business operations run smoothly. Here’s a list of such mistakes that you can avoid.

• Improper posting of POS transactions and expenses often leads to financial discrepancies.
• Lack of consistent inventory records, which may result in overstocking or stockouts.
• Third-party delivery sales may lead to inaccurate revenue reporting.
• Inappropriate charts of accounts will make it difficult to categorize and analyze financial data correctly. 
• Monthly data collection instead of weekly can delay the identification of issues and hinder timely adjustments. 

Why is Bookkeeping Important for Restaurants?

Restaurant bookkeeping provides crucial insights into the financial status of the respective business. Here are some reasons why bookkeeping is important for restaurants.

• Cash Flow Management: Bookkeeping allows you to monitor and manage the inflow and outflow of cash. This ensures that the restaurant has sufficient funds to cover its expenses.
• Financial Health: Accurate bookkeeping gives you a better idea of the restaurant’s financial performance and helps you identify profitable areas that need improvement.
• Compliance: Bookkeeping ensures that your restaurant adheres to tax regulations and financial reporting standards.
• Operational Efficiency: Bookkeeping tracks expenses and revenues to help you make informed decisions. 

Effective bookkeeping is a strategic asset for all restaurants aiming to compete with others in the food and hospitality industry. As a restaurant manager or owner, you gain valuable insights by maintaining accurate records through bookkeeping. 

Final Thoughts

Restaurant bookkeeping is the best resort if you want to track your financial records. All you need to do is hire a third-party accountant or a bookkeeper to handle your restaurant’s financial data. Another resort is to seek help from software or tools that can also handle your finances accurately. 

You can hire a third-source accountant or bookkeeper to manage your financial data. This will enable you to focus on your restaurant business and make improved business decisions.