how to do bookkeeping for a restaurant

While other bookkeeping credentials do exist, those offered by AIPB and NACPB are the most renowned and respected. You can easily track any incorrect deposits, lost invoices, or sales discrepancies. Your breakeven point shows how much revenue you need to earn to pay for your expenses. According to a report by the National Restaurant Association, there are 14.7 million people working in the restaurant industry.

Skilled bookkeepers provide a valuable service to large and small organizations by keeping meticulous records of all financial transactions. But with the right restaurant accounting tools, this process can be automated. The tools match your records against your accounts, identifying any discrepancies and errors quickly and accurately. Similarly, calculating and tracking prime costs enables you to optimize seasonal menu items and prices, manage inventory efficiently, and make smart staffing decisions.

What Does a Restaurant Accountant Do?

You’ll also need to keep constant track of inventory, food and pour costs, prepaid accounts, short pays and vendor credits, and tips. Since your POS logs revenue coming in and much of the money going out of your restaurant (credit card refund, food cost, labor), you can use it to analyze sales and costs. You should always reconcile accounts payable before putting your invoices into your accounting software. 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. Restaurant accounting is also made up of essential bookkeeping processes that keep your business running.

how to do bookkeeping for a restaurant

Finding a bookkeeper who understands the complexity of the food and beverage industry, both front-of-the-house operations and back-of-the-house management. Restaurant accounting is unique because of the language of hospitality finance. It’s crucial to have an effective accounting system in place for your restaurant to see the success you’re after.

Credits & Deductions

Restaurant accounting is the organization of financial records so that the owner has a better understanding of the restaurant’s financial position at any given time. These financial transactions range from the cost of inventory, equipment, and utilities to the prices on the menu. 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.

So, for this example, we’ll utilize Toast, although the setup process will more than likely be similar or the exact same for the rest of the systems. The other thing we love about Shogo is the ability to quickly and easily reconcile merchant service deposits. The Shogo journal entry allows you to reconcile your merchant service deposits so you can ensure you are getting all the money you are due. Restaurateurs and investors use EBITDA when they’re looking to sell, buy, or invest in a restaurant to help guide their buying decisions. It’s a tool for a valuing a restaurant and gauges a restaurant’s earning potential.

What is restaurant accounting?

This practice allows you to identify potential cash flow issues and make necessary adjustments to ensure the financial stability of your establishment. Create distinct how to do bookkeeping for a restaurant categories for income and expenses to facilitate organization and analysis. Common income categories may include food sales, beverage sales, catering, and merchandise.

how to do bookkeeping for a restaurant

Whether you like to watch, read, or connect, Restaurant365 has a growing menu of information to keep you up-to-date on restaurant news and best practices. As the industry faces historic change, Restaurant365 is empowering owners and operators to meet their teams’ needs and pay faster than ever. Luke O’Neill writes for growing businesses in fintech, legal SaaS, and education. He owns Genuine Communications, which helps CMOs, founders, and marketing teams to build brands and attract customers.

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