When many restaurant owners think about bookkeeping, it creates a feeling of dread. Between managing employees, food orders, clean-ups, customer complaints, banking, and everything else that goes along with the industry, a restaurateur often ends up overwhelmed. The last thing you want to do is keep up with bookkeeping but is a vital part of your success.
With tight margins, staying on top of bookkeeping ensures that you know about problems before they ruin your business. Getting behind makes it extremely time-consuming to get caught up and may result in missed deductions, payments, or expense changes that directly impact your bottom line.
What You Need to Succeed
Regular and accurate bookkeeping means you always have access to the information that moves you from losing to winning. Consider the following ways to make sure your restaurant is 5-stars in more than just the area of food:
QuickBooks Online helps to record your sales and provides up-to-the-minute sales reports. To accomplish this task, do the following daily:
- Mimic how cash and credit card sales hit your bank daily. Bank batches settle every day and so should your daily sales entries.
- Generate a sales report at the end of each day's postings. QBO allows for customizing this report to match your needs.
- Using your sales summary, generate a journal entry to match. If you don't know how to do this, your bookkeeper or accountant can assist you.
- Restaurant POS sales integrations with QBO. There are lots of POS systems that integrate with QBO and will create your daily sales entry. Our preferred integration partner is Shogo.io.
Cash Flow Reports
Every business needs to have available cash flow reports to perform forecasting tasks. Without this, you miss out on essential information on how you spend and what you can do in the future.
In the restaurant business, there are a variety of variables when it comes to determining costs. Restauranteers use these figures to move from barely making it to a higher profit margin. Ways to look at your expenses versus your income include:
- The cost of goods sold is the ingredients you purchase to make the dishes you serve and any beverages you offer. Alcoholic beverages supply a higher rate of return, so consider adding these to your menu to increase your margins. Try to keep this number at no more than 33% of your sales.
- The cost of labor is how much you pay people to work for you. This is not only the hourly rate you pay an employee, but your portion of taxes, unemployment tax, uniform costs, and benefits such as insurance, PTO, 401(k) matches, etc.
- The cost of occupancy and equipment encompasses such items as your rent or mortgage, utilities, ovens, refrigerators, insurance, and signage.
- Marketing costs are another expense that must be factored into your expenses. This is ads or billboards, and of course, social media.
- Prime cost is the process of keeping the cost of food and beverage, plus the labor at only 60-65% of your sales.
Paying bills is easy with QBO. Enter and pay bills weekly to keep all of your vendors happy. Printing checks directly from QBO means you won't have extra data entry.
If you use a credit card to pay expenses, make sure it is set up in QBO as a credit card, rather than an expense. Then tie the account to QBO. The data automatically uploads and you need only ensure that the system is assigning costs to the correct categories. Reconciliation of your credit card also provides tax time info.
Paying bills online through your bank is also a great way to speed up your accounting process. Again, the information comes automatically and requires minimal attention.
Reconciling all of your accounts monthly is the only way to avoid year-end nightmares. Business owners find that this is a money-saving task, regardless of the type of business they own. It also equates to knowing your financial situation more completely and finding mistakes quickly.
This is probably the most important aspect of management. Laws constantly change, so it is wise to outsource your payroll. Fees and interest are a costly consequence of an innocent mistake made in payroll. The IRS frowns on missed, late, or wrong payments made concerning payroll such as federal taxes. The only way to protect yourself from this risk is by using a payroll company.
Reputable professional payroll companies consistently update themselves on changing laws. With a dedicated person to run the payroll, you can rest assured that everything is done right the first time.