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It’s essential to find a bookkeeper who understands the nuances of the food and beverage industry, including both front-of-house operations and back-of-house management. A restaurant bookkeeper oversees the financial reports of the restaurant. They ensure that the figures are accurate, track inventory, and meet tax obligations. The overall goal with bookkeeping is to minimize operating expenses and maximize profits.

• These KPIs are controllable, but they can also easily get out of hand if not monitored.
• Point of sale systems are computerized systems that record orders and process payment transactions.
• Billboards, newspaper ads, and even social media advertising can all add up.
• You may focus more on developing new menu items, enhancing customer service, and growing your clientele because you don’t have to worry about handling your finances.
• She is also experienced in setting up corporations with the State Corporation Commission and the IRS.
• It helps you make informed decisions, streamline operations, control costs, manage cash flow, and ultimately, achieve long-term success for your restaurant.

Bookkeeping for restaurants is about keeping a record of all financial activities, including sales, outlays, and payments to suppliers and staff. For restaurants, bookkeeping is essential since it gives a clear picture of the company’s financial health and identifies areas that require improvement. Restaurant profit and loss statements (P&L) or income statements reflect the expenses, costs, and sales of your restaurant during a specific period of time. This statement enables you to analyze the financial progress of your restaurant. With this statement, you’ll be able to determine where you are making or losing money. When it comes to restaurant accounting, the chart of accounts categorizes the money you spend and receive.

Calculate Your Costs

Will your wait staff work for tips, or will you add gratuities to every bill? And if you hire full-time wait staff, you may also need to furnish benefits. Many restaurants rely on part-time or seasonal employees to avoid this expense. Once you can anticipate your busy times, you can schedule your staff members accordingly. Record a separate daily sales entry for each day (not monthly or weekly). With this method, you are mimicking how the cash and credit card deposits hit the restaurant’s bank.

• Restaurant bookkeeping is essential to managing your finances and ensuring your restaurant is profitable.
• Luke O’Neill writes for growing businesses in fintech, legal SaaS, and education.
• You always want to pay those vendors on time so that they continue to supply your restaurant with food and other goods.
• Total sales per head comes in handy when you’re tracking trends, mealtime averages, or exploring marketing strategies.
• All of those accounts with a beginning and ending balance should be reconciled.

As you grow you will have to continually modify your bookkeeping system to meet your needs. “Cost of goods sold” refers to the products you buy that make up your product. And in the restaurant business, it’s no secret that, in order to make food, you’ll have to buy ingredients. If you’re opening a franchise restaurant business, such as Pizza Hut or TGI Friday’s, you’ll source your food directly from suppliers as instructed by the home office. But if you’re striking out on your own, you’ll be responsible for buying ingredients, possibly every day.

Restaurant accounting vocabulary

Filing the payroll taxes incorrectly or after the due can translate into hefty penalties. Understanding the basics is essential to make smart, finance-driven business decisions. So, let’s take a look at the steps you need to bookkeeping for restaurant take to manage restaurant bookkeeping. Whether you’re a startup entrepreneur in the hospitality industry or an accomplished restaurateur, restaurant bookkeeping and accounting might sound like a foreign language to you.

Small restaurants may benefit from outsourcing bookkeeping services because it frees them up to concentrate on expanding their enterprise. You may focus more on developing new menu items, enhancing customer service, and growing your clientele because you don’t have to worry about handling your finances. Remember, find and hire a bookkeeper who understands the nuances of the food and beverage industry that, includes front-of-house operations as well as back-of-house management.