A restaurant profit and loss statement, also called a P&L, is a financial document detailing the total revenue and expenses over a predetermined period of time. P&Ls provide an overview of your restaurant’s revenue, costs, and expenses. You can choose between cash and accrual accounting if your restaurant has less than $1 million in revenue. The most common accounting method of restaurants is cash accounting or cash basis. This method allows businesses to record their generated income when cash is received from services rendered or paid for expenses and costs.
Here is the ultimate list of restaurant business KPIs you’ll lose sleep over. Payroll is responsible for calculating and distributing employees’ paychecks. Payroll also keeps a financial record of deductions, bonuses, vacation, sick time, and overtime. The beginning Small Business Bookkeeping Services inventory is the amount of food that you have in your kitchen at the beginning of the period. Purchases refer to the inventory you buy in vendor orders in that period of time. Final inventory is the amount of food items you have left when the week is over.
Keep accurate accounting records
Regardless of your choices, you’ll still need to pay unemployment taxes. And if you hire full-time wait staff, you may also need to furnish benefits. Many restaurants rely on part-time or seasonal employees to avoid this expense.
- With such tight profit margins in the restaurant industry it is important to analyze your financial reports on a regular basis.
- If you hear someone talk about restaurant bookkeeping, that may only refer to recording transactions in the general ledger.
- But as a restaurant owner, it’s imperative that you stay on top of your finances to make sure you understand exactly what’s happening at your business.
- Bookkeepers can review timecards to ensure that labor payments are accurate.
- A locked down accounts payable process allows you to pay your bills on time and without error, so that your inventory shipments remain on schedule.
Cost of Good Sale (COGS) is the actual cost that goes behind producing what you sell. This key figure will indicate how efficiently you are controlling your inventory and pricing your items. Keeping track of this indicator will help you reduce and stabilize your inventory costs. How you set up your books for a restaurant lays the foundation for how smoothly the rest of the bookkeeping process will go. Toast POS is a leading point of sale system with a suite of features that allow you to set up tableside order and pay options, manage your online menu, and create a no-contact guest experience. Underestimating your weekly income could make it look like your business is losing money when it’s not.
An Affordable Bookkeeping Alternative to a CFO
Depending on the type of restaurant you run, though, costs may be higher or lower. To evaluate the costs, divide the staff into groups of kitchen staff or managers to see which group is costing you more. The cost of preparing the item on the menu is divided by the total revenue https://adprun.net/understanding-the-cost-of-bookkeeping-for-small/ from the item. Monitor your cash flow, which refers to the amount of cash coming in versus the amount of cash going out of your business on a daily, weekly, and monthly basis. Payroll in the restaurant industry can be challenging as tracking employee hours is complex.
Is cashier and bookkeeper same?
Key difference: Cashier is the term used to describe a person who collects cash as part of a business transaction that is purchase/sale of goods and services. Bookkeeper is a term used to describe a person who maintains a written record of every business transaction that is purchase/sale of goods and services.
Using restaurant accounting tools can help you track any incorrect deposits, lost invoices, or sales discrepancies. Effective bookkeeping is a fundamental aspect of running a successful restaurant. It enables you to maintain accurate financial records, make informed decisions, and ensure compliance with tax regulations. In this article, we will provide a comprehensive guide to mastering restaurant bookkeeping within an integrated, all-in-one restaurant management platform.