Restaurant Bookkeeping & Accounting in Ukiah, CA: Get Control of Your Numbers

Restaurant Bookkeeping Is Different

Restaurant accounting has operational details that don't exist in many other small businesses.

Your POS, Bank and Accounting System Should Tell the Same Story

One of the most common restaurant bookkeeping problems occurs when the POS system, bank account and accounting software don't reconcile.

Each system represents a different stage of the same transaction.

If a restaurant records only the net amount deposited into the bank, important information can disappear from the books.

If you use Toast, our guide to Toast deposits that don't match sales explains why these differences happen.

Build a Restaurant-Specific Chart of Accounts

A generic small-business chart of accounts often doesn't provide enough detail for restaurant management.

At minimum, ownership should be able to identify major revenue and cost categories without digging through individual transactions.

• Food sales
• Beer, wine and liquor sales where applicable
• Discounts and refunds
• Food cost
• Beverage cost
• Payroll and payroll taxes
• Merchant processing fees
• Occupancy costs
• Operating expenses
• Sales tax payable
• Tip liabilities where applicable
• Cash and clearing accounts

The purpose isn't to create hundreds of accounts. It's to create enough structure to make the financial statements useful for operating decisions.

Separate Food and Beverage Sales

A restaurant that combines all revenue into one sales account loses valuable information.

Food and beverage categories often have very different margins. Separating them makes it easier to compare each revenue stream with its related cost of goods sold.

A bar-heavy operation may have excellent beverage margins while food cost is underperforming. Another restaurant may have the opposite problem.

The accounting structure should make those differences visible.

Reconcile Credit Card Deposits

Restaurant owners should be able to trace POS credit-card activity through the processor and into the bank.

Simply matching whatever hits the bank to sales can hide settlement differences and processing activity.

• Compare POS card sales with processor activity.
• Identify processing fees.
• Account for refunds and adjustments.
• Verify settlement timing.
• Review chargebacks.
• Confirm deposits reach the correct bank account.
• Reconcile clearing balances regularly.

Inventory Belongs in the Accounting Conversation

Inventory affects the accuracy of restaurant cost of goods sold.

If a restaurant purchases $30,000 of product during the month, that doesn't automatically mean it consumed $30,000.

Without reliable inventory numbers, food and beverage cost can fluctuate for reasons that have little to do with actual operating performance.

For local operators, see our Restaurant Inventory Management in Ukiah, CA guide .

Restaurant Labor Should Be Easy to Measure

Payroll is usually one of a restaurant's largest expenses, so the accounting system should make labor performance easy to understand.

Owners should be able to compare payroll expense with sales and monitor labor trends over time.

The bookkeeping system should also distinguish employee wages from payroll taxes and other employer payroll costs where useful.

Our Restaurant Labor Cost in Ukiah, CA guide covers the operating side of labor management.

Close the Books Every Month

Restaurant financial statements become much more useful when the books are closed consistently.

A month-end process should verify that the major balance-sheet and profit-and-loss accounts are reasonable before management relies on the numbers.

• Reconcile bank accounts.
• Reconcile credit-card and POS clearing accounts.
• Review cash balances.
• Record ending inventory.
• Review accounts payable.
• Review payroll liabilities.
• Review sales tax liabilities.
• Look for duplicate or uncategorized transactions.
• Review owner contributions and distributions.
• Compare the P&L with prior periods and expected operating results.

Your P&L Should Help You Run the Restaurant

The profit and loss statement shouldn't be something an owner sees only when the accountant asks for it.

A useful restaurant P&L should make it easy to evaluate revenue, food and beverage cost, labor, prime cost and operating expenses.

Profit on Paper Doesn't Always Mean Cash in the Bank

A restaurant can report a profit and still struggle with cash.

Debt payments, inventory purchases, equipment, owner distributions, timing differences and balance-sheet activity can all consume cash without appearing as ordinary operating expenses on the P&L.

That's why restaurant bookkeeping needs to include both the income statement and balance sheet rather than relying on bank balance alone.

Read our guide: Why Your Restaurant Can Be Profitable but Have No Cash .

Better Books Create Better Operating Decisions

Restaurant bookkeeping isn't valuable because every transaction has a category. It's valuable because accurate financial records allow ownership to understand what is actually happening inside the business.

Sales should reconcile to deposits. Inventory should connect to cost of goods sold. Payroll should connect to labor performance. And the profit and loss statement should reflect the economics of the restaurant.

When those systems work together, restaurant owners can spend less time wondering where the money went and more time making decisions based on reliable numbers.