Restaurant Accounting: Bookkeeping Tips and More
- October 21, 2022
- Dresden Decor
It enables you to maintain accurate financial records, make informed decisions, and ensure compliance with tax regulations. In this article, we will provide a comprehensive guide to mastering restaurant bookkeeping within https://quickbooks-payroll.org/ an integrated, all-in-one restaurant management platform. By following these essential steps, you can optimize your financial management processes and drive long-term success and growth for your restaurants.
Your restaurant bookkeepers are crucial to the success of your restaurant finances. While they might only execute basic bookkeeping tasks, it’s imperative that they do so accurately and efficiently. When they understand how their work affects the overall financial health of your restaurant business, they become more valuable to your organization.
That’s because there are liability issues and high penalty fees on the line for mistakes made in payroll. Just like keeping track of orders, oven temperatures, and the right amount of salt, you have several things to track when doing accounting for your restaurant. Working with a remote bookkeeping service will still provide you with all the value you could get from an in-office Restaurant Bookkeeping and Accounting Explained bookkeeper but at a fraction of the cost. First, run a profit and loss by going to reports on the left-hand side and selecting reports. If you are already using Toast for your POS system it makes sense to consider their payroll service since your payroll data can easily be pulled from Toast. Obviously, you run into a lot fewer issues when two sister systems integrate together.
According to the National Restaurant Association, there are 14.7 million people in the restaurant industry. Ten percent of the workforce in the United States is made of restaurant employees, most of whom are hourly and part-time. 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. A controllable cost report gives you an idea of where the company spends its money, which potentially affects how much it will earn or if money is being lost. Great food, brilliant customer service and all-round stellar dining experiences are probably why you got into restaurants in the first place.
Explain to your restaurant bookkeepers how this data provides insights you need to evaluate costs and changes over time. If your restaurant bookkeepers are new to the restaurant industry, they’re probably familiar with reporting by calendar month. Consequently, you must explain to them why calendar months do not provide an apples-to-apples comparison because of the uneven number of weekend days in each month. Tell them why the optimal solution for restaurants is to set up reporting using 13 accounting periods of four weeks per year, or 4/4/5 accounting periods. However, the 5 simple steps above will put down the foundation for a solid bookkeeping system. As you grow you will have to continually modify your bookkeeping system to meet your needs.
The last step is analyzing your financial data to budget and plan for the future. Plan to analyze your financial data weekly and for each period, and work with your accountant (if you have one) to set financial goals and develop strategies to achieve them. Next, set up a chart of accounts, which is a system that organizes your restaurant’s accounts into categories, such as assets, liabilities, income, and expenses. Not only can they help you when tax season rolls around, a restaurant accountant can also advise you on long-term finances. Unlike many retail industries, inventory costs for restaurants can fluctuate wildly, even from week to week. Or maybe disease has affected how much cod your fish supplier has in stock.
You should review your prime costs, CoGs, inventory counts, and labor on a weekly basis, not a monthly basis. These KPIs are controllable, but they can also easily get out of hand if not monitored. If you’re monitoring these figures on a weekly basis, you can patch any cost leaks without incurring too many damages. So is failing to recognize meal discounts or mis-logging sales as revenue. When you enter incorrect information into your books, you’re also skewing financial reports and KPIs.