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QuickBooks Tips Blog

Restaurant Bookkeeping Using QuickBooks

Posted by Matt Roberge on Jun 24, 2013 7:00:00 AM

Many restaurants choose to handle their restaurant bookkeeping using QuickBooks.  Intuit does not make a specific QuickBooks restaurant industry version, so you will need to customize QuickBooks to meet your needs.  However, if you set up your company file using the easy start interview there is an option to select the restaurant industry.  QuickBooks will then make suggestions based on your industry to set up the software geared towards a restaurant.  There are still many modifications and suggestions I will make on a proper QuickBooks setup and bookkeeping procedures for a restaurant.   

Bookkeeping Team And Tasks

One thing I would address before anything else is what your bookkeeping needs are and who should be involved with the process.  Having both restaurant management and bookkeeping experience I can give some suggestions as to who I would involve in the restaurant bookkeeping and what tasks I would assign them.

Restaurant Owners - I would suggest that restaurant owners be the only people that have the ability to sign checks, pay bills or move money in anyway.  I would never suggest giving your bookkeeper the ability to move money or sign checks as it opens the door to bookkeeper theft.  I would also have the restaurant owner approve payroll.  Lastly, I might have the owner handle bank deposits and most cash transactions, but also believe that this task can be handled by a manager. 

Bookkeeping Team - The bookkeeping team should handle entering bills, but not paying them.  I would also have your bookkeeper verify all cash deposits.  Your bookkeeper should handle the entering of daily sales and the regular reconciliation of your accounts.  

Restaurant Managers - I would have restaurant managers handle cash deposits.  While many may disagree with this I would only recommend this if the bookkeeper is checking all cash deposits vs your sales records.  I would also have your manager oversee and control regular inventory of food and beverage.  Lastly, I would have your restaurant managers handle the submission, but not approval of payroll.

IT And Technical

I would highly recommend setting up QuickBooks on a terminal server.  I would then have remote access set up where multiple people can log into the server and QuickBooks at the same time without interfering with one another.  You should set up a server and your filing in a dedicated office for the accounting aspect of your restaurant.  If you have multiple locations you will need to centralize all important documents like bills, invoices and all paperwork that needs to be accounted for and filed. 

 

 

Record Daily Sales

It is very important to realize that you need to record daily sales journal entries for your restaurant.  Most restaurants have their credit card batch out on a daily basis automatically.  This will cause your credit card merchant payments to be deposited into your bank account on a daily basis.  Sometimes a few days' transactions may be combined (mostly Amex) but you will still need to record each day's sales separately.  This is because you need to mirror what is going on in your bank account deposits and that will require daily sales journal entries.  You will want to locate or customize a daily sales journal entry from your restaurant point of sale system that works for you.  The sales summary should give you the level of detail you require and should also be set up to easily be input (either manually or automatically through downloading) into QuickBooks   

Another part of your daily sales is how to deal with cash.  Since cash payments are collected at your restaurant but not yet deposited in your bank you should allocate those funds to undeposited funds.  Then when funds are deposited into the bank you should move them from QuickBooks undeposited funds to the proper bank account.  As I mentioned earlier I would recommend that your manager handle the cash deposits and your bookkeeper verify that they are correct.  By using undeposited funds you will know if certain cash deposits never made it to the bank or if the cash was handled incorrectly by the restaurant manager.  This system has proven to work and also input the correct procedural controls over cash.  Our system is to have a manager deposit cash for a certain date range and email the details to the bookkeeper and restaurant owner.  As an example maybe a manager deposits $2,285.12 for the sales date range of 6/1/13-6/9-13.  The bookkeeper would verify that against the daily sales amounts that populated undeposited funds to ensure accuracy.  

Develop An Accounts Payable System Built To Grow

Although accounts payable seems like an easy part of the restaurant accounting system (and it is) I have learned a few things from past experiences.  Having or asking managers to input bills into the accounting system does not seem to work well.  Typically managers are busy with the day to day of running the restaurant so handling invoices gets pushed back on the priority list.  This results in late payments and inaccuracies.  I would make the entering of bills the responsibility of the bookkeeper or possibly an administrative assistant.

Centralize all of your bills and invoices at one office location (at one of the restaurants or not, it doesn't really matter). I would come up with a centralized system to put all invoices currently open and due in a ‘To Be Entered’ box for the bookkeeper or administrative assistant to input into QuickBooks. Once the bill has been entered the person entering the bills should then file these away in either an electronic filing system or an older style filing cabinet. If there is ever a discrepancy or audit the bill in question can be easily found.  Under no circumstances should anyone but an owner have the ability to sign checks, pay bills or move money.  As I mentioned earlier this is a poor procedure that can cost you a lot of money.

Restaurant Payroll

I would recommend outsourcing your restaurant payroll to an external payroll service.  Companies such as ADP, Infinisource and Paychex all do a good job.  I never really recommend any business handling their payroll in house.  Payroll can be complex and tax laws are constantly changing.  Having a payroll service provider take on the burden for any mistakes with payroll tax is reason enough to outsource your payroll.  In fact I believe that every business should outsource their payroll needs.  

There are a few key things I would look for from your payroll provider.  First, I would look for a reliable company that has a proven track record of customer service.  Don't worry too much about price as it is a very competitive industry.  I would be looking for excellent customer service.  Secondly, I would look for a payroll company that has QuickBooks integration.  I would ask if payroll data can be imported into QuickBooks and how much it costs.  Lastly, I would make sure that they can accommodate growth.  If you are going to add various locations you need to make sure that your payroll service provider can give you that data broken down by location.  You especially want to make sure they can accommodate QuickBooks class tracking in their payroll import.  

Restaurant Inventory Management

I would not recommend using QuickBooks directly to manage your inventory.  I feel that properly handling your inventory in QuickBooks would be much too tedious of a task.  It would take an amazing bookkeeper just to get it right.  I would recommend purchasing a separate inventory management control program or coming up with an external inventory system of your own.  I would then adjust inventory values in QuickBooks through a journal entry on a regular basis.  For most restaurants I would recommend adjusting inventory values once per month.  I would recommend using internal managers to oversee the inventory counts.  However, I would have your bookkeeper look over the values for accuracy and also to look for inconsistencies with your financial reports.

Multi-Location Restaurants

The last thing I want to talk about is setting up your QuickBooks file to handle multiple locations.  As I mentioned in the payroll system section, you would want to use QuickBooks class tracking to differentiate between the income and expenses for the various restaurant locations.  Having a bookkeeper that understands QuickBooks class tracking as well as financial reporting is going to be important for your multi-location restaurant bookkeeping.  It is important that your payroll service provider be able to accommodate multi-restaurant class tracking into their payroll QuickBooks import.  The restaurant owner and bookkeeper should be analyzing financial reports to look for opportunities or issues at each restaurant location.

Restaurant bookkeeping is not the easiest industry to support from a bookkeeping perspective.  Making sure that you set up QuickBooks properly in the beginning is very important.  There are a lot of variables and your internal procedures and management will have an impact on your restaurant bookkeeping system.  Make sure that you find a restaurant specific professional bookkeeper to help you set up the correct bookkeeping system.

QuickBooks Restaurant Bookkeeper

 

Topics: QuickBooks Tips Blog, Restaurant Bookkeeping, Bookkeeping Procedures, QuickBooks For Restaurants, Restaurant Bookkeeper