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Salt Lake City Bookkeeping Blog

Restaurant Bookkeeping - 5 Things To Consider

Posted by Matt Roberge on Jun 5, 2013 7:00:00 AM

We have developed many restaurant bookkeeping systems over the years.  We have extensive restaurant experience; both front of the house management and back of house accounting.  Restaurants are a tough business, which makes the accounting aspect that much more important.  We have helped several restaurants dial in a tight bookkeeping system and grow.  We have helped owners set up their restaurant concept to scale.  Helping a restaurant owner grow from a few locations to many is exciting, but it takes a tight financial approach.  Having the proper bookkeeping system in place from day one will promote scalability and set you up for growth.  Here are five things to consider when setting up your restaurant bookkeeping.  

POS System

The restaurant POS system that you choose is a very important decision that you should not take lightly.  I have seen clients go through up to three different POS systems by the time they finally have a conversation with us and we point them in the right direction.  We have seen various new POS systems come and go because they can't make it in the competitive market for one reason or another.  Typically they come out with some new hot technology that looks great (example Ipad), but the functionality and basic reporting is garbage.  While I'm not a big business guy I typically recommend going with one of the bigger players when it comes to your restaurant POS system.

The POS system that I most often recommend is Aloha by NCR.  From a front of house perspective Aloha is easy to program and train your staff on using.  It also has great controls which allow you to control theft.  Lastly, Aloha has always offered excellent customer service.  Our local Utah Aloha dealer POS Technologies has never disappointed.  I know the general manager Devin Wright extremely well and am confident he will over deliver his product and services to you.  From a back of house/bookkeeping perspective Aloha also delivers.  Obviously you want good reporting and Aloha has a series of standard reports that you will need.  In addition Aloha makes it easy to build custom reports if you find you need more details.  Your daily sales summary will be an important piece of your restaurant accounting.  You can manually enter the daily sales summary or import you sales data into QuickBooks or another accounting system.  You would want to check with the external software developer for importing options and compatibility.   

Restaurant Bookkeeping Team

Your next consideration would be to develop what your bookkeeping team is going to look like.  Are you going to hire one person or a service to help you?  Are your needs part-time or full-time?  What additional services will you need from your bookkeeper?  I would highly recommend a part-time bookkeeping service in the beginning.  You will get a higher level professional than if you just hired an individual on a part-time basis.  Your bookkeeping service should act more like an outsourced CFO services company.  You should get a higher level of service that can offer you advanced financial reporting as well as general business consulting.  Additionally you will have a bookkeeping system put in place that works and is extremely accurate.  If you continue to grow and you outgrow your part-time service you can either offer them more work or hire a full-time in house person.     

Restaurant Reporting

As the owner of a restaurant there are many important financial ratios for restaurants that you need to consider.  Developing a set of reports that you analyze on a regular basis will be crucial to running a successful restaurant.  Accurate financial reporting starts with your bookkeeping system being implemented properly and updated on a regular basis.  The link I provided above gives some great in depth financial ratios that you should consider and here are a few that I found important as a restaurant general manger: 

Labor ratios - I feel that the 20% or less of labor costs is a fair goal.  You want to look at labor as a percentage of total sales.  

Prime cost = cost of food + cost of beverage + cost of labor should be equal to 60% - 65% of your total sales.  

Food costs - I personally feel that depending on your style of restaurant you should be aiming for 25-35% food costs.  I would say that anything below 30% you are doing well.  

These are just a few of the major restaurant financial ratios I would consider on a regular basis.  As you can tell and probably already know the restaurant business it tough.  Margins are extremely low in the restaurant industry.  Having a tight bookkeeping system is so important to the success of your restaurant.  

Accounts Payable

One task that may seem simple but will require some work is managing your accounts payable.  Although entering and paying bills is a simple task it is one of the more costly pieces of your bookkeeping process.  The reason is the time and logistics that it takes to properly manage AP.  If you are a multi-location restaurant you will need to centralize your bills at one location where the accounting is handled.  You will then need to enter all bills into the accounting system and then file them either by paper or digitally.  Lastly, you will need to send payments out via check or bill pay.  We highly recommend using a financial institution that links to QuickBooks and allows for QuickBooks bill pay.  This will simplify your AP system and save you the time of printing, signing and mailing checks.  If you do not use QuickBooks bill pay then I highly recommend that you print checks from QuickBooks.  Printing checks will automatically feed payment information into QuickBooks and reduce unnecessary data entry.  

Controlling Theft

One thing that will be on your mind as a restaurant owner is controlling theft.  You need to control bookkeeper theft, employee theft as well as inventory theft.  There are numerous controls you can use to control bookkeeper theft.  Your bookkeeper should never have the ability to send payments or sign checks.  Your bookkeeper should also have limited access to both your POS system as well as your accounting system.  

You will also have to worry about employee theft.  You can control employee theft by restricting their POS access.  Your employees should never be directly interacting with the cash in your till.  Lastly, you should have a manager approve all employee checkouts for each shift.  

Inventory control is another worry for every restaurant owner.  You need to monitor supplies, food and alcohol inventory levels to control theft.  Restricting employee access to these items will certainly help.  You should also use your POS system to report on items sold and compare them to your physical inventory counts.  As long as you physically count your inventory on a regular basis and check it against your purchases and sales reports you should be able to identify and control theft.

While restaurant bookkeeping may be the last thing on your mind when starting or growing your restaurant business you should consider it.  Margins are very tight in the restaurant industry and having a tight bookkeeping system in place will help you run a successful restaurant.  

Restaurant Bookkeeper


Topics: Restaurant Bookkeeping, Restaurant P.O.S, Outsourced CFO Services, Part Time Bookkeeper, Outsourced Bookkeeping, Restaurant Bookkeeper, Restaurant Accounting, Restaurant Industry