A Guide to Restaurant Bookkeeping by CJCPA

Many new restaurant owners manage their own bookkeeping and work with a certified public accountant (CPA) at tax time. Make sure you have a point-of-sale system that easily integrates with that software. This is one of the best methods to use when dealing with accounts receivable and accounts payable. The cash method would make your restaurant seem profitable while it is actually suffering from losses. A daily sales report is a report of all the money you took in for the day. It breaks the revenue down into different categories so you can see what is selling.

Four-week periods, on the other hand, are always 28 days with four Fridays and four Saturdays. When you’re comparing accounting periods, you want to accurately compare revenue based on times that should be equally as busy. Cost of goods sold is a KPI that indicates how https://accounting-services.net/what-is-the-difference-between-bookkeeping-and/ well you’re pricing your products and controlling your inventory. CoGS represents the actual cost of food and beverage used to produce your food and beverage sales. By keeping tabs on your CoGS ratio, you can take action to reduce and contain your inventory costs.

Calculating Costs

Restaurant accounting and receipt management software is designed to automate and organize common bookkeeping practices. Accurate restaurant accounting has a multitude of benefits for the success and growth of your business. Accounting leads to better financial management, deeper insights into your business’s financial status, better tracking of cash flows, and a more robust system of tracking inventory. You’ll also learn to take control of your prime costs and adjust menu pricing based on demands and inventory costs. Keeping these books for your restaurant straight, current, and accurate is crucial to the financial success of your business. You can use restaurant accounting software to manage all your bookkeeping needs, such as creating professional invoices, managing cash flow, and tracking time.

These services allow you to automate your accounts payable and get a more accurate COGS figure. While there are many great restaurant POS systems on the market we like Toast the best. Restaurant bookkeeping with Toast and QBO is by far our most preferred setup. Our clients The 7 Best Accounting Apps for Independent Contractors in 2023 love the front end of Toast and the reporting and accounting integration back end is really great for accountants. One of the neglected aspects of restaurant management is bookkeeping. Once you’re behind on your restaurant accounting, it is difficult to get caught up.

Understand and Track Your Expenses

To miskey numbers when you’re entering row upon row of data is also human. 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. Your financial forecast gives you a rough estimate of how much revenue you’ll generate in the future. Your cash flow report (or statement of cash flows) tracks the flow of cash.

We can even recommend some restaurant management books and teach you how to do a swot analysis for restaurant to help you get the most out of your business. The vast majority of the business world use calendar months—or some derivation like quarters—for accounting periods. Bars and restaurants typically use four-week accounting periods, though. Most restaurants use the cash method, while most other businesses use the accrual method.