If you’re in charge of paying for restaurants or bookkeeping activities, you know how difficult this can be.
Bookkeeping for restaurants is time-consuming, time-sensitive, and needs to be precise. With volatile dining crowds and labor distribution based on those crowds, the accounting fundamentals need to be streamlined and in place for smooth operation and eventually restaurant success for small businesses.
ACCURACY UNMATCHED FOR RESTAURANTS ACCOUNTING AND BOOKKEEPING(Bookkeeping for restaurants)
With a general ledger and special dashboard designed for their restaurants, our clients have real-time access to the financials to quickly grasp the margins and make adjustments on the fly. Type nuances? No trouble. Bookkeeping for restaurants provide:
- Stock management & monitoring 4-4-5
- Prioritisation of the cash balance
- Payroll link and POS device
- Analyzing the expense of food and liquor
Bookkeeping for restaurants makes an accounting of restaurants easy.
Restaurant managers are responsible for monitoring numerous inventories and measuring the expense of their labor and food against their daily sales. That can be extremely time-consuming for the management team even with a program in place. To monitor the bottom line, the expenses associated with the daily to weekly upkeep and ordering of the product must be factored into.
You will have to hold timesheets when taking into account the often-flexible hours the workers work every day and night. It is also important to control the food costs on any given day through efficient programming within the POS framework. Automating these processes and having accounting professionals keep their records allows more flexibility and freedom for restaurant managers to meet the needs of their customers and staff.
How do you handle bookkeeping for restaurants? 5 Easy Steps!
1. Sales record
2. Set Payable Accounts
3. Outsource your payroll to an executive payroll service.
4. Get both accounts reconciled.
5. Analyze annual results and financial ratios for the restaurants.
1. Record Sales Through Your POS Daily
One of the first things you’ll need to find out is how to report your sales correctly.
Most notice that restaurants using QuickBooks is an efficient reporting method.
Record your sales receipts per day
For each day report a separate daily sales entry (not monthly or weekly). With this approach, you are mimicking how the restaurant’s bank hit the cash and credit card deposits. Most restaurants accept credit cards, and daily settle the batch. This will result in a credit card deposit or deposits hitting your bank account separately for each batch.
To mirror the operation, you need to examine how funds reach your bank and set up your Bookkeeping for restaurants.
Generate a Sales Report
To record the regular sales you will need to produce some kind of report that sums up your sales.
Most restaurant POS systems may include a list of regular sales in them. If you need to customize the report to get more detailed information, you’ll have to work with your POS system through customization.
Create a Daily Sales Journal
You can set up a routine sales log entry until you have a sales report, and create a memorized transaction in QuickBooks for easy records for Bookkeeping for restaurants.
2. Handling Accounts Payable
The next step in your restaurant bookkeeping cycle will be building payable accounts. It will be important to keep your vendors happy if you want them to carry on doing business with you.
Learn how to enter bills and pay bills in QuickBooks to begin with; both are easy tasks to fulfill.
Enter your bills 1-2 times a week and make them payable once a week.
If you cut checks on your bills you want to make sure the QuickBooks prints checks. This will feed the payment information into your QuickBooks file automatically and thus reduce unnecessary data entry.
Another option is to pay bills online by linking your bank account to QuickBooks and signing up for online bill payments.
Pro Tip(Bookkeeping for restaurants): Setting up a credit card in QuickBooks will be another part of your accounts payable. I have seen many users set up credit cards incorrectly in QuickBooks. A credit card should not be set up as a type of expense account; it should be set up as a type of credit card. When you enter credit card charges your expenses are recognized. Setting up the appropriate form of credit card would also allow you to reconcile the account which is very necessary.
You are at major risk as a business owner by doing your own payroll. If you file your payroll taxes incorrectly or file it late, the penalties and interest that you will be assessed can be quite large. If you do not outsource your payroll to an accounting company, you are held to a high degree of liability.
It is shockingly economical to outsource the payroll and a required choice to ensure regular and accurate paychecks and accounting.
Pro Tip(Bookkeeping for restaurants): Search for a genuinely respectable payroll service. Require payroll data has the capabilities to be imported into QuickBooks and all digitally sent reports and paychecks.
QuickBooks account reconciliation is the single most important piece of the whole Bookkeeping for restaurants.
The only way to say you’ve registered all of your financial transactions is to update your accounts. You need to reconcile not just your bank accounts, all of your accounts. You are expected to balance bank accounts, credit cards , loans, credit lines, and payroll obligations. Any account that gets a beginning and end balance statement can be reconciled. Reconciliation of accounts ensures you are looking at accurate financial reports.
5. Financial Reporting
If you don’t use your restaurant’s financial reporting then you run your business blindly. With such tight profit margins in the restaurant sector, it is necessary to periodically review your financial reports.
Restaurants should look at sales vs. the cost of the ratios of goods sold, as well as labor ratios.
The ratio many restaurants would remember is the prime expense, which seeks to maintain food + drink + labor costs at around 60 percent to 65 percent of your total profits.
Cost of Sold Goods
“Price of goods sold” applies to certain items that make up the product that you purchase. And in the restaurant industry, it’s no secret you’ll have to buy ingredients in order to produce food.
If you are opening a franchise restaurant business, such as Pizza Hut or TGI Friday’s, you will be directly sourcing your food from suppliers as instructed by the home office. If you strike out on your own, however, you will be responsible for buying ingredients, possibly every day.
Restaurants typically try to keep food costs to about 33 percent of their total sales, according to Chron.com.
Yet the good news is that liquor is a perfect way to raise your profit margin. When you bought a bottle of wine, chances are you already heard this. The same bottle in your local liquor store which costs $15 might cost $30 or $45 when you’re out.
Your restaurant depends on labor expenses. Will your workers wait to get tips, or would you apply gratuities to every bill? Can you have uniforms or an allowance? Waiters and waitresses who work for tips typically earn smaller hourly wages than those who don’t, but you’ll also have to pay for kitchen staff, hosts, valets, cleaners, and other essential staff. You’ll still have to pay unemployment taxes regardless of your choices. And if you hire full-time waiting staff, you may need to provide benefits, too. Many restaurants rely on part-time or seasonal employees to avoid this expense.
Occupancy costs and the facilities
You’ll need to pay for your utilities unless you’re lucky enough to own property and your own facilities outright. That could be rent, or mortgage and real estate tax.
Utilities, cooking and cooling appliances, insurance and signage are typical expenses, but the maintenance costs must also be considered.
Marketing and administrative costs
Finally, you ‘re going to want to get out the word that you are open to business. That, in addition to social media, may include newspaper ads and billboards.
At the very least, social media is free — and you’ll have direct access to the customer marketplace you want to serve. Provide promotions and coupons to get clients in the door.
Of course you’ll want to pay for yourself, plus any contractors you need to help with necessities like Bookkeeping for restaurants. You will be busy managing day-to-day operations, so consider outsourcing payroll, payables and other functions to a company that can allow you to focus on making a success of your business.
Looking at the comparisons between profit and loss and previous periods and years will also give you some insight as to how things are going financially.
Financial reporting at restaurants can be the difference between success and failure.
Remember, it’s likely that servicing your commercial ovens and refrigerators will cost more than what you pay for your home Frigidaire.
Should I outsource my Bookkeeping for restaurants?
Build on your strengthens and outsource your weaknesses as they say in the business sector.
Learning how to delegate tasks is a necessary step towards becoming an efficient manager.
As a business owner, it can be tempting to assume all the roles; however, outsourcing your restaurant accounting services would take away your burden and obligation and allow you to concentrate on your restaurant’s growth and management. Are you ready for this? Get started by scheduling a financial consultation of your business.
There are also other facets of Bookkeeping for restaurants, such as a collection of restaurant POS, inventory controls, fraud prevention, and cash handling. The 5 basic steps above, however, will lay the foundation for a solid method of bookkeeping. As you expand, your bookkeeping system will need to be constantly updated to match your needs.
Also read, How to Read a Cash Flow Statement
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