Accounting is tedious and time-consuming work, but it’s essential if your restaurant is going to survive. We know it’s not likely that you studied finance or business when you were in school, and of course your main focus has always been perfecting your recipes and creating the right atmosphere in your dining establishment. And that’s as it should be. But the fact remains - you’re now the owner of a business, and you’re going to need to manage your finances properly if you don’t want to become a part of the all too familiar statistics of restaurants that fail early in their career. While we can’t train you to be a CPA in the confines of this short article, we can help you identify some of the points that you need to include in your bookkeeping routines so that you can stay on top of your restaurant accounting.
The core of all financial management is keeping track of all of your transactions, starting with the money you make. In restaurant accounting, that means your sales. Fortunately, POS technology has really come a long way. Gone are the days when your servers scrawled customers’ orders on a pad, tore off the page to become their “check”, and stuck it on a spindle. Your cash register system will track itemized sales records, and organize it all into categories. You’ll need this for sales tax reporting. You’ll also get records of what method of payment your customers used.
This one is a little trickier. Your revenue basically all comes from the same source, your cash register, so a modern POS system should help you keep that all together. Your expenses, on the other hand, are likely to be paid to a variety of vendors, your landlord, and so on. That being said, you’ll need to be well organized in this area. Chances are that you’re like many restaurants, in which the office is cluttered with piles of receipts and bills. Make sure you document every dollar you spend. Some of your vendors may give you invoices that you pay with a check or another electronic method. But there are many who you’ll pay in cash, especially if you buy meats or vegetables from markets you visit. Keep every receipt, bill, or invoice, and file them in appropriate categories. You’ll be thankful you did when tax-filing time comes.
This is another area in which things get complicated for your business. Payroll is tricky and time-consuming in any industry, and since taxes are involved, there are consequences for any mistakes you may make. But the way your staff gets paid makes restaurant accounting a little more complex. Keep in mind that your wait staff will be taxed on their earned tips, and that adds some extra work on your part to report properly.
If it still seems too challenging to keep it all organized, consider the possibility of a virtual accounting solution. At Keeping Your Balance, we’d love to give you a free consultation and show you what we can do to make things more efficient and save you lots of time and money.