Restaurant Bookkeeping Made Easy

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restaurant kitchen

Restaurateurs have a passion for food and are great at feeding people. What they are sometimes less skilled at is managing the books for their restaurants so they are assured a consistent profit.

As the business grows, bookkeeping can quickly become too complex for a restaurant owner to handle. If you do not feel sure of your accounting abilities, or lack sufficient resources to accurately and thoroughly track your income and expenses, it may make sense to hire an outside bookkeeping service that specializes in restaurants, like BookWerks™.

Staying on top of your restaurant’s financial health can mean the difference between barely surviving and thriving.

Four Key Elements to Restaurant Bookkeeping

In order for restaurants to run like a well-oiled machine, five things are necessary:

  1. Chart of Accounts
  2. Point of Sale
  3. Cash Control
  4. Inventory Count
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1. Chart of Accounts: First things first, your restaurant’s bookkeeper must keep a defined and simple chart of accounts. Often, owners want an account for everything. Information overload takes attention away from important areas.

Break your sales into four main categories:

  • Food
  • Beer
  • Liquor
  • Wine

Maintain your Rent, Utilities, CAMs and Security as Occupancy Expense. 

For your operating expenses, have broad categories. Differentiating between marketing, advertising and digital marketing is a fruitless effort. Combine similar expenses into broad categories that allow you to focus on the big items in the business.

2. Point of Sale: Utilize a cloud-based point of sale (POS) system. Cloud-based POS systems are quite robust, and allow for all sorts of ad hoc and on-the-spot reporting. The POS is your go-to for understanding sales trends.

Ensure the POS accounting reports are set up to match the Chart of Accounts. This creates a seamless transition from POS to the bookkeeping for your restaurant.

3. Cash Control: Maintain a daily cash report. This report should be tied back to drawer balances and safe balances. For any ‘paid-out’ expenses, ensure the amounts are recorded and receipts are attached to the report. In addition,

  • Deposit cash nightly.
  • Do NOT pay out tips from the drawer.
  • Have all credit card tips paid out on employee paychecks.
  • Paying out tips from the drawer is risky, and in effect, provides a short-term loan to the employee.

4. Inventory Count: Inventory is the restaurant industry’s weakest link in terms of restaurant financial record-keeping. There are plenty of software companies that claim they help with inventory, but the reality is, it all comes down to you and your store.

You have to take physical counts and update the system. Since the biggest concerns are spoilage, waste and theft, take your inventory count monthly. This will create a rhythm to updating your inventory and cost of sale, while also providing an indicator of waste.

Manage inventory by the percentage rather than worrying about a single piece of bread or slice of cheese.

Good Food is Not Enough

Unfortunately, good food is not enough to keep a restaurant going strong. Maintaining a close eye on your books, with the help of a professional bookkeeper specializing in restaurants can help you stay on top of how much you’re spending (and where), where your revenue is coming from, and how much you need to earn to be profitable.

Contact us today to learn how better bookkeeping can help your restaurant’s bottom line.

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Do it Yourself or Hire Professional Bookkeeping? How to Decide

Many people with as little as one bookkeeping course keep small company books, but professional booking service companies like BookWerksTM offer much more. Fully-trained bookkeepers manage account records, produce financial reports, and monitor revenue, spending and invoices. They analyze documents to make sure accounts are current and accurate. They also make sure you are ready for tax season. A company that focuses on bookkeeping can save you a lot of time and headaches. Those precious hours you spend classifying your expenses, reconciling your accounts, recording payments and creating monthly reports is usually better spent attending to your clients, or enjoying time with your friends and family. A professional bookkeeper will help you avoid errors, which can be costly, illegal and adversely affect your credit rating. Outside bookkeeping partners can run regular reports to show how you are doing, where the money is going and if your efforts are paying off–or not.