Restaurant Accounting 101: Manage Your Bookkeeping Like a Pro

accounting for restaurant tips

If you have a bookkeeper and accountant, they will be able to provide you with a detailed report on each of these. If you don’t, it may help you to understand what the financials in the headings below mean—and why they can help you understand how your business is performing. Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications.

  • A restaurant profit and loss statement, also called a P&L, is a financial document detailing the total revenue and expenses over a predetermined period of time.
  • While it has been reviewed by human transcribers, it may contain errors.
  • Thousands of restaurant operators across the nation have made RASI their software of choice for restaurant management.
  • That same software should be managing your payroll tax calculations as well.
  • Owning a bar or restaurant is an exciting way to pursue your passion and create an independent income.

Because recording income ahead of expenses makes your restaurant seem more profitable than it is. 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. Four-week periods, on the other hand, are always 28 days with four Fridays and four Saturdays.

End-of-day sales report

When cash comes in, it’s called “cash in” or “inflow.” When cash goes out, it’s called “cash out” or “outflow.” Cash flow statements list the state of your operations, investments, debt, and financing. Accounting software aggregates your chart of accounts for you and automatically populates reports with the correct information. If you’re working with a firm, you can control accounting costs by ensuring that junior accountants handle the menial tasks, and your CPA completes the hard analysis. Restaurant accountants understand how to compile data accurately and meaningfully.

By connecting seamlessly with your POS, accounting software automates the collection and organization of financial data and transactions. Restaurant accounting is also made up of essential bookkeeping processes that keep your business running. While you’ll most likely hire an accountant or bookkeeper to handle most of these processes, how to do bookkeeping for a restaurant here’s what you need to know so you’re at least speaking the language. The chart of accounts helps organize your financial transactions in categories that will give clear insight of your restaurant’s financial health. Food cost percentage shows how much of your overall sales are spent on ingredients and food supplies.

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Brand-name products like QuickBooks even make specialized modules that are specific to restaurant accounting. To find the right accountant, talk to other managers, owners, or chefs to see who they use. Look for someone with knowledge of your local laws and experience in the restaurant accounting niche.

accounting for restaurant tips