Bookkeeping. It’s one of the biggest pain points for restaurant owners, and perhaps one of the most often overlooked. How do you keep track of finances while you have so much else to worry about from employee satisfaction to inventory management and menu configuration? Being sure to always follow the best accounting practices is tough, even if you’ve been in the restaurant business for a long time.
When it comes to restaurants bookkeeping, you may have a lot on your mind. You might be asking yourself questions like how do restaurants do bookkeeping? Or what does a restaurant bookkeeper do? Or maybe how do you keep books for a small restaurant? Whatever your questions, keeping some simple tips and areas of focus in mind can help.
In this article, we’ll give you five simple steps for mastering your restaurant bookkeeping so you can run a profitable business and focus more on the things that make you passionate about your restaurant, like the food, the mood, and the customer.
What is restaurant bookkeeping?
Restaurant bookkeeping has to do with recording the finances of your restaurant. Every expense, sale, and profit must be accounted for. From payroll to the cost of inventory, to rent and systems costs, you must track every penny flowing in and out. Understandably, this can be very challenging. Keep these five simple steps in mind and bookkeeping for your restaurant will become a lot more manageable.
What are the five simple steps for mastering restaurant bookkeeping?
1. Use your point of sale system to record sales
A good point of sale system (or POS system) will track every card transaction. This makes it much easier to track sales and stay on top of your restaurant bookkeeping. Lots of individual points of sale happen each day though, so keeping a close record of everything is important. The right software will make this much easier.
Be sure to figure out how deposits land in the bank and ensure your POS system mirrors that. For many restaurants, it’s common for deposits to be made in batches, like at the end of a full day. Check over things at the end of each day to ensure nothing’s awry. Keeping tabs and closing out the till on a daily basis will help you ensure you’re not letting anything slip through the cracks.
2. Set up your accounts payable process
Accounts payable refers to vendors and suppliers you pay to keep your restaurant running the way it should. When it comes to accounts payable, invoices and records are very important. Thankfully, there’s software to help make the process easier.
In general, be sure to capture electronic versions of all invoices and take care to put them through the right workflow so approvals and recording go smoothly. If you have the right software solution to help with your accounts payable, you won’t need too many staff members to handle your accounting. Investing in a quality solution is well worth it.
3. Get payroll running smoothly
Labor costs are a huge consideration in the restaurant industry. Getting the right payroll data will help you understand these costs and make adjustments to your workforce to optimize profitability. Payroll software can make a big difference. It not only makes it easier to pay employees and servers regularly, but it gives you the numbers and insight you need in order to improve.
When it comes to payroll, there are specific regulations you must follow. Having a software solution will help you mitigate errors or costly mistakes in this regard. You’ll need to file payroll taxes correctly or face the consequences. Again, having a software that automatically tracks everything will make your life a lot easier. Less stress in your day means you can focus on more exciting and impactful tasks.
4. Analyze and double-check your bank accounts often
Think of it like “balancing the checkbook.” Taking time to reconcile bookkeeping with your bank accounts is critical. You should keep a watchful eye on things to make sure the money is getting to your bank account and that nothing is being left unaccounted for. If you’re not careful, it’s easy to lose some transaction data.
You also need to be aware of theft and fraud. Just because someone paid with their credit card doesn’t necessarily mean all the money will magically land in the bank and everything will always go smoothly. It may be good to stay aware of deposit amounts and invoices so there aren’t any errors there. Again, software can help but taking regular time to double-check everything here and there is also a good idea.
5. Run and check financial reports frequently
How do you stay on top of your restaurant bookkeeping? You need to pull reports often and check them for accuracy and areas of improvement. Your passion for your restaurant may drive you, but ultimately your business won’t survive if you don’t have a firm handle on your finances. Be sure you’re aware of sales vs. cost of goods sold and that you’re also factoring in labor costs. Also be sure to analyze food costs and aim to keep them at around 60% of total sales.
You may be sensing a theme, but software is also helpful when it comes to restaurant reporting. Reports are a critical part of your full bookkeeping strategy, so find the right solution to get the data you need to keep things accurate and make informed decisions.
Restaurant bookkeeping can feel complicated at times. And let’s be honest, it really can be if you don’t have the right tools to keep everything under control. At SynergySuite, we plug into your restaurant’s bookkeeping operations, so your business runs smoothly. Let’s get started and take your restaurant to the next level.