Key reports such as profit and loss (P&L) statements and prime cost (food and labor costs) provide valuable insights into your restaurant’s performance. Analyzing your P&L daily helps you identify strengths and weaknesses in your business and take proactive measures to address any issues. Calculating and tracking food and labor costs empowers you to optimize menu prices, manage inventory efficiently, and make well-informed staffing decisions. Over 52% of restaurant owners reported that high operating and food costs are some of the biggest challenges they face in running restaurants. Using accounting software can help owners and managers know where their money is going and identify potential savings. The software can also keep track of inventory and profits and correctly calculate sales tax to avoid fines.
Verify compliance with labor laws.
Next, set up a chart of accounts, which is a system that organizes your restaurant’s accounts into categories, such as assets, liabilities, income, and expenses. Although there are https://www.bookstime.com/ many options, most restaurant and retail businesses choose the calendar year accounting period. Restaurants usually run seven days a week and might have some days with more sales.
Accounting Software by Industry
- Otherwise, the best accounting software platforms for restaurants start at a low cost of between $10 and $15 per month.
- These programs are designed to help you organize your inventory counts and transactions quickly and accurately.
- When you calculate break-even point in units, you’re learning how many pizzas, coffees, fixed price meals you’ll need to sell to achieve that same goal.
- Paying your restaurant staff, including front-of-office staff and kitchen crew, is part of your labor costs.
- Business owners working in construction or manufacturing may be especially drawn to Sage 50’s advanced inventory, job costing, reporting and budgeting capabilities.
These services allow you to automate your accounts payable and get a more accurate COGS figure. For example, you can set a goal to reduce expenses or increase revenue. You can use your financial data to budget and plan your restaurant’s long-term success. This method is usually best for restaurant accounting because you have to regularly track your inventory, and it gives you a more accurate view of your financial situation. It helps you better understand your finances, decrease expenses, increase profits, and gives you insights into your performance. Put simply, prime costs is the sum of your restaurant’s costs to sell its food, drinks and products—your COGS as mentioned above—plus the labor costs of your salaried and casual staff.
Overtime pay
- Keeping all your menu items fully available for your guests requires regularly buying ingredients from your vendors.
- We chose TouchBistro as the best option for food truck owners because it’s a portable iPad system that can be operated easily on a truck’s wifi.
- Provide employees with detailed pay stubs that outline their gross pay, deductions, net pay, hours worked, and any tips received.
- We do this by providing the most accurate and user-friendly accounting software available, while adding new features when they need them most.
- We collect the data for our software ratings from products’ public-facing websites and from company representatives.
Released in 2012, Restaurant365 is a cloud-based software solution designed specifically for restaurant owners. It offers a comprehensive platform to meet the needs of restaurants of all sizes, as well as owners ranging from beginners to experienced bookkeepers. The cost of goods sold (as in, what it costs to prepare meals and drinks) is another large monthly expense for restaurants. Other key expenses include software subscriptions, occupancy and marketing. All the best accounting software platforms for restaurants offer free trials lasting two to four weeks.
The Role of Restaurant Accountants
Rounding up or down by a few cents or dollars can add up over the course of a week or month and begin to affect your bottom line. With the ability to slice, dice, and drill into that historical data, you can identify underlying trends in different datasets. For example, cross-reference how to do bookkeeping for a restaurant sales by menu category to determine the best time to run a half-price appetizer promotion. POS technology allows you to see your financial performance in real-time. At any given moment, you peek at your sales-to-labor ratio or determine if sales are meeting historical averages.
Calculating Costs
It comes integrated with Gusto for payroll processing, making it easy to pay employees, and it can be integrated with banking and POS systems. We chose QuickBooks Online as our runner-up because, while it isn’t designed specifically for restaurants, it offers an impressive lineup of features, including add-on payroll services. It’s also extremely easy to use for owners with no accounting or bookkeeping experience. We chose Restaurant365 as our best overall accounting software for restaurants because of its robust features, ease of use, and full integration with other systems.
The Best Restaurant Accounting Software
Finally, your restaurant’s success will be measured against key performance indicators. KPIs are what you’ll obsess over as a business owner – they dictate the financial outlook of your restaurant. Reconciling accounts keeps you aware of lost checks, incorrect deposits, or cash variances. Account reconciliation also catches accounting errors and keeps track of your transactions.