Leveraging advanced technology and a team of skilled professionals, they provide efficient and remote financial management. By using cloud-based accounting software, they ensure secure access to data and real-time collaboration, enabling owners to make informed decisions from anywhere. Regularly analyzing your restaurant’s financial and operational data is crucial for restaurant bookkeepers to help the business maintain a healthy bottom line. Key reports such as profit and loss (P&L) statements and prime cost (food and labor costs) provide valuable insights into your restaurant’s performance. Analyzing your P&L daily helps you identify strengths and weaknesses in your business and take proactive measures to address any issues.

How to Increase Your Prices Without Losing Customers – Part 2

Learning about these will help you understand how restaurant accounting works and what you can expect. Although some people may use it interchangeably, restaurant accounting and bookkeeping are different. Streamlining the accounts payable process into an AP automation allows you to quickly capture paper and electronic invoices and route them through customized workflows for approvals.

• Any account that gets a statement with a beginning and ending balance can be reconciled.
• The cost of goods sold (as in, what it costs to prepare meals and drinks) is another large monthly expense for restaurants.
• In this guide, we will walk you through the fundamental principles of restaurant bookkeeping and accounting, offering you an easy-to-follow roadmap to keep your financial records in order.
• You will learn how to record costs, value inventory, calculate depreciation, analyze financial statements, and use software programs.
• You can break these categories into subcategories to provide a more digestible breakdown of your financial transactions, such as food and beverage, marketing, and labor costs.
• This process enhances overall profitability and guides menu development to align with financial objectives.

Free Restaurant Templates to Save You Money

Here are some key ratios to consider when reviewing the financial statements of your restaurant, specifically your weekly and monthly income statements. Payroll in the restaurant industry can be challenging as tracking employee hours is complex. Multiple wages and staff positions are the norms in the restaurant industry, and the ability to accommodate different rates is vital. Choose a system that is easy to use for employees and customers that can seamlessly tie in with your accounting software.

• Some popular options include QuickBooks, Xero, FreshBooks and Zoho Books, among others.
• Your restaurant purchases dozens of ingredients in bulk, serves hundreds of tables daily, and takes customer orders in person, online and via the phone.
• While your accountant will likely handle the majority of these processes, it’s important to be aware of them so you can speak the same financial language.
• If your accounts don’t reconcile, it may be a sign that funds are being misused, or worse being stolen.
• Reconciling accounts will make you aware of incorrect deposits, cash variances, lost checks, and more.
• For something more lowkey and strictly B2B focused, the London Tech Show takes place in the UK capital on March 6-7.

Accrual accounting

These costs include property tax (if you own the building) and even the insurance you pay for your building and equipment. Occupancy and equipment costs are usually the 2nd largest expenditure in a restaurant business, right after payroll. Utilities, rent, taxes, and your marketing budget, for instance, aren’t included in computing the COGS, so you shouldn’t use this solely to measure your restaurant business’ financial standing. Keep the original receipts so that if you encounter any problems down the road, you have supporting evidence to go back to. These receipts can protect you if the vendor says you haven’t settled your accounts payable yet. The only thing a vendor hates more than a buyer who doesn’t pay on time is one who doesn’t have sufficient funds in their account when they make their payments.

Get started with Epos Now Payments

As a restaurant owner or manager, you know that running a successful establishment requires much more than curating meals and providing impeccable service. It also demands a firm grip on your finances, ensuring that your financial transactions are logged at the end of each day. If you need a guide to help organize your financial bookkeeping for restaurants records, the CPAs from C.E. Thorn, CPA, PLLC have provided bookkeeping services to restaurants in the Triangle area for many years and are here to help you get your accounting records in order too. Reconciliation ensures accuracy and prevents fraud and accounting errors, so this process must be conducted regularly.

How to Handle Accounts Payable

Every restaurant needs a set of reports for the daily, weekly, monthly, and annual monitoring of the financial health of the business. Here is a list of the reports you’ll need for your restaurant accounting – and what they ultimately show you. So here are the essentials of restaurant accounting and bookkeeping when it comes to reports, processes, and KPIs. A client’s financial activities will include all transactions related to their income and expenses and a bookkeeper is responsible for recording all of these transactions accurately. Some bookkeepers may also have to facilitate financial transactions and ensure  transactions are legally compliant. They ensure that business financial records are up-to-date and accurate, and this helps companies make financial decisions and focus on growing their business and focus on growing their business.

Final inventory is the number of supplies you have left when your defined tracking period is over. Overhead rates are fixed costs of running your business, such as rent and insurance. Depending on the type of restaurant you run, though, costs may be higher or lower.

How do you set up your books for restaurant accounting?