Restaurant Accounting: A Step by Step Guide

restaurant bookkeeper

Assets are things you own, like equipment, inventory, and straight cash. Liabilities are things like vendor bills and restaurant equipment loans. Accounting software aggregates your chart of accounts for you and automatically populates reports with the correct information. Because of this, they require specific accounting methods and benchmarks that wouldn’t apply to, say, a retail store.

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.

Restaurant accounting methods to choose from

However, according to available data, the average salary range for a how to do bookkeeping for a restaurant in the United States is approximately $35,000 to $55,000 per year. It’s important to note that salaries may differ significantly based on the factors mentioned above and can be higher or lower than the average range. Some marketing efforts are low or no cost, such as printing flyers or posting on social media. Other efforts take a little more dollars, like participating in a food festival or buying a radio advertising spot. Restaurant industry laws and regulations cover everything from food handling safety to maximum occupancy to alcohol sales. There is also a separate chain with your vendors in which you place orders, receive and pay invoices and are issued receipts.

Get answers to your most challenging questions; get the advice your business needs to grow. They’ll bring your existing financials up to date and manage your books with accuracy. These are considered employee income rather than wages and aren’t included in a restaurant’s revenue. Employees are required by law to report them, and they are fully taxable, but they aren’t subject to withholding. It can also be helpful to set up a monthly or quarterly review schedule. During these reviews, you can go through your records and make sure that everything is accurate and up-to-date.

What do restaurant bookkeepers do?

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 love the front end of Toast and the reporting and accounting integration back end is really great for accountants. Once your tip policy is set up, you should document and distribute it to every staff member when they get hired. Make sure it is clearly outlined with your restaurant’s process for handling tips and how exactly employees are expected to report them to the IRS.

Your breakeven point represents how much revenue you need to earn to cover your expenses. Using words like al dente or flambé comes naturally to you, but accounting terms? When you calculate break-even point in units, you’re learning how many pizzas, coffees, fixed price meals you’ll need to sell to achieve that same goal. Getting your financials right can actually help your business deliver on that very passion that motivates you in the first place. As they say in the business industry, leverage your strengths and outsource your weaknesses. Run the profit and loss for whatever date range you wish to look at.

Benefits of RASI Bookkeeping

Also, to protect yourself and your business, your policy should include a grievance process when a problem may arise. Being transparent with all your policies will only build trust and prevent potential problems. It’s imperative that your bookkeeper or firm maintain an accurate record of your restaurant’s sales tax obligations, and stay on top of actually paying the sales tax on time. You will want to find out from the bookkeeper how much you are actually paying each month.

  • Restaurant bookkeeping is the process of tracking your restaurant’s income and expenses.
  • When the staff receives these payments, they are considered wages and are subject to withholding.
  • Although there are many options, most restaurant and retail businesses choose the calendar year accounting period.
  • By performing these tasks, restaurant accountants or bookkeepers should be able to offer advice on reducing food and overhead costs so that the restaurant can make the most out of its profit margin.
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