Bookkeeping Tips for Restaurants and Cafés

Managing the books for a restaurant or café involves unique challenges, from handling daily sales to tracking tips and managing inventory. Here are essential tips to help you keep your finances in order and make informed business decisions:

1. Record Sales Daily

Why: Restaurant sales fluctuate daily, and credit card batches often settle each night. Recording sales every day gives you a precise, up-to-date picture of your cash flow and helps reconcile your bank deposits accurately .

Tip: Use your POS system to generate daily sales reports and enter these into your bookkeeping software. This should include cash, credit card, and other payment types.

2. Mirror Bank Activity in Your Books

Why: Credit card deposits often hit your bank account in separate batches. Your bookkeeping system should reflect these deposits exactly as they appear in your bank to make reconciliation straightforward .

Tip: Set up your chart of accounts and deposit tracking to match your bank statement structure.

3. Categorize Sales and Expenses

Why: Restaurants have multiple revenue streams (food, drinks, tips) and varied expenses (ingredients, labor, rent). Categorizing these helps you analyze profitability and ensures you apply the correct taxes to each category.

Tip: Break down sales by category and track expenses in detail. This also helps with tax compliance and business analysis.

4. Stay on Top of Payroll and Tips

Why: Payroll is complex in restaurants due to hourly wages, overtime, and tips. Properly tracking and reporting tips is essential for compliance with labor laws .

Tip: Consider using specialized payroll software or outsourcing payroll to ensure accuracy and compliance.

5. Use Restaurant-Specific Bookkeeping Software

Why: Restaurant accounting has unique needs, such as inventory tracking and daily sales reconciliation. Dedicated software can automate much of this process and reduce errors.

Tip: Look for solutions that integrate with your POS and bank accounts for seamless data flow.

6. Reconcile Accounts Frequently

Why: Frequent reconciliation helps catch errors, prevent fraud, and ensure your books match your bank statements.

Tip: Reconcile at least weekly, if not daily, especially for high-volume establishments.

7. Monitor Key Performance Indicators (KPIs)

Why: Tracking metrics like food cost percentage, labor cost percentage, and average ticket size helps you spot trends and make informed decisions.

Tip: Use your bookkeeping reports to regularly review these KPIs and adjust operations as needed.

8. Stay Compliant with Regulations

Why: Restaurants face strict rules around sales tax, payroll, and tip reporting. Staying compliant avoids costly penalties.

Tip: Keep up with local regulations and consider consulting with a restaurant-savvy accountant.

Final Thoughts

Accurate, timely bookkeeping is the backbone of a successful restaurant or café. By recording sales daily, mirroring bank activity, categorizing transactions, and leveraging the right tools, you’ll gain valuable insights and keep your business running smoothly.