Proper bookkeeping is essential for the financial health and success of any restaurant. It involves accurately recording sales, tracking expenses, managing payroll, reconciling accounts, and generating financial reports. In this guide, we will explore the steps involved in restaurant bookkeeping and highlight the importance of utilizing modern bookkeeping software to streamline the process.
How to Do Bookkeeping for a Restaurant:
Effective restaurant bookkeeping can be achieved by following these key steps:
Step 1: Record Restaurant Sales:
Accurately recording sales is the foundation of restaurant bookkeeping. Here’s what you need to do:
- Utilize a modern point-of-sale (POS) system to track sales in real-time.
- Ensure that all sales transactions, including cash, credit card, and online payments, are properly recorded.
- Keep detailed records of sales by category, such as food, beverages, and merchandise.
- If you use 3rd party sales channels, record the sales & the fees so you understand the costs associated.
Step 2: Record COGS and Expenses:
To track your cost of goods sold (COGS) and other expenses, follow these guidelines:
- Regularly record and categorize all expenses related to running your restaurant, including food and beverage costs, utilities, rent, payroll expenses, and marketing expenses.
- Implement a system to track inventory levels and calculate COGS accurately.
- Ensure that all expenses are properly documented with receipts and invoices.
- Consider using an AP automation platform that will turn scanned invoices and receipts into categorized expenses that automatically get recorded in your accounting system.
Step 3: Pay Restaurant Expenses:
Efficiently manage your restaurant expenses by utilizing a modern accounts payable (AP) system:
- In addition to recording COGS and expenses, an AP automation system can help you schedule payments, and ensure timely payments to vendors and suppliers.
- Automate payment processes whenever possible to streamline operations and reduce the risk of errors.
Step 4: Manage Restaurant Payroll:
Managing payroll is a critical aspect of restaurant bookkeeping. Follow these steps:
- Keep detailed records of employee wages, tips, and benefits.
- Stay compliant with labor laws and regulations regarding minimum wage, overtime, and employee classifications.
- Utilize a modern payroll platform that streamlines calculations and automatically records payroll data into your accounting platform.
- Be sure to record accrual JEs for payroll periods that straddle two months so you get accurate payroll costs.
Step 5: Reconcile Restaurant Accounts:
- Regularly reconciling your restaurant accounts ensures accuracy and identifies any discrepancies. Consider these actions:
- Reconcile bank statements, credit card statements, and vendor statements with your records.
- Investigate and resolve any discrepancies promptly to maintain accurate financial records.
Step 6: Master Restaurant Financial Reporting:
Financial reporting provides valuable insights into your restaurant’s performance. Here’s what you can do:
- Generate regular financial reports, including profit and loss statements, balance sheets, and cash flow statements.
- Define key business metrics that you will track weekly including Net Sales, Food Cost (as a % of Food Sales), Beverage Cost(as a % of Beverage Sales) & Labor Cost(as a % of Net Sales). Consider breaking down labor into front-of-house and back-of-house.
- Analyze the reports to assess your restaurant’s financial health, identify trends, and make informed decisions.
Use Restaurant Bookkeeping Software:
Utilizing restaurant bookkeeping software simplifies the entire process and enhances accuracy and efficiency. Consider these benefits:
- Streamlined Record Keeping: Modern bookkeeping software integrates with your POS system and automatically tracks sales, expenses, and inventory.
- Time-Saving Automation: Software automates repetitive tasks, such as generating invoices, processing payments, and calculating payroll.
- Accurate Financial Reporting: Generate comprehensive financial reports with ease, giving you a clear view of your restaurant’s performance.
- Increased Efficiency: Software eliminates manual errors, reduces paperwork, and saves time, allowing you to focus on core business operations.
Need Help Getting Your Books in Order?
If you’re overwhelmed by restaurant bookkeeping tasks or need assistance in streamlining your processes, our bookkeeping software can help. Request a demo today to discover how our software can simplify your restaurant bookkeeping, improve accuracy, and provide valuable financial insights.
To sum it up: proper bookkeeping is vital for the success of your restaurant. By diligently recording sales, tracking expenses, managing payroll, reconciling accounts, and utilizing modern bookkeeping software, you can maintain accurate financial records, make informed decisions, and ensure the financial health of your establishment. Implement these steps and take control of your restaurant’s bookkeeping processes today.