Industry Specific Bookkeeping Tips: Restaurants/Food Service

The food service industry is BOOMING, and we love to support local eateries/startups! Here are some tips to keep your restaurant serving customers for a long time to come!

1. Track Sales and Revenue

Daily Sales Reporting: Record all sales from your Point-of-Sale (POS) system daily, separating food and beverage sales and differentiating between cash and credit transactions. 

Revenue Reports: Generate revenue reports to understand sales volume and profitability. 

2. Manage Expenses

Food Costs (COGS): Meticulously track the cost of food purchased and used to determine your Cost of Goods Sold (COGS) and food cost percentage. 

Labor Costs: Implement robust payroll processing to accurately track all labor expenses. 

Other Expenses: Log all other expenses, such as kitchen supplies, table linens, and utility costs, under the correct accounts in your chart of accounts. 

Prime Cost Monitoring: Keep a close eye on prime costs, which are the combined costs of food and labor, as they often make up the largest portion of a restaurant's expenses. 

3. Implement a Chart of Accounts 

Detailed Structure: Develop a comprehensive chart of accounts tailored to the food service industry, with specific accounts for various revenue streams and expense categories like food and beverages, supplies, and labor.

4. Reconcile Accounts Regularly 

Balance Books: Consistently reconcile all financial accounts, including bank accounts, credit card accounts, and payroll, to ensure that your books are accurate and that no transactions are missed.

5. Utilize Accounting Software 

Streamline Processes:

Use accounting software to automate tasks, import sales data from your POS, manage payroll, and generate detailed financial reports.

Make sure whatever software you use has a lot of granular Detail:

This sjust means that it helps break down expenses into every detail, providing insights into where money is being spent and its return on investment.

6. Analyze Financial Reports 

Key Metrics:

Regularly review key financial metrics, such as your profit and loss (P&L) statement, cash flow summary, and labor cost reports, to gain insights into performance.

Menu Performance:

Analyze these reports to understand menu item profitability, identify cost trends, and make informed business decisions.