As a service for small businesses, our staff likes to keep an eye on trends. A popular search term lately is “how to do bookkeeping for a restaurant”.
How is that different than doing bookkeeping for any other industry? Honestly, it’s not all that different – unless you’re searching for a trend that we think is a common mistake in restaurant bookkeeping: 13 financial statements per year instead of the usual 12.
Let’s talk about why some restaurants do this (and why we don’t recommend it), plus go over bookkeeping essentials that every restaurant owner should know!
At CSI Accounting & Payroll, we’ve offered monthly accounting services for nearly 60 years. That means we’ve spoken to thousands of restaurant owners, answering questions like:
- How can I do bookkeeping for my restaurant? Do you have any tips?
- Should I do my restaurant’s accounting, or is it time for me to outsource it?
- Why do some restaurants want 13 statements per year, and why is this a mistake?
Tips for Doing Bookkeeping for a Restaurant
As mentioned in the introduction, there are virtually no differences between general bookkeeping and restaurant bookkeeping (aside from the request for 13 statements per year, which I’ll get into later).
For that reason, let’s go over some of our favorite bookkeeping tips to share with all of our clients!
- Simplify your credit cards and bank accounts. We recommend only one business credit card and one business bank account. This will save you a bit of time and effort while doing your own books.
- Use reliable bookkeeping software. New to bookkeeping? Then this is a must. Technology makes it easier to input expenses and monitor cash flow. It can walk you through the basics!
- Separate your business and personal finances. A shocking number of business owners don’t do this, but it can trigger an audit.
- Outsource your payroll. Payroll is often affordable to outsource and is a portion of your bookkeeping. If running payroll takes up time, energy, and effort that you can't prioritize over other aspects of running your business, it's time to hire a payroll service.
- Go beyond bookkeeping. Doing your own bookkeeping is fine for newer and smaller businesses, but as you grow, you should expand your accounting investment. That’s what the next section is about!
(Pssst! Want some tax tips for restaurants? We have those, too!)
DIY or Outsource Restaurant Accounting?
For very new and very small businesses, doing your own accounting isn’t necessarily a bad thing! It can save you money and fill your time while you wait for business to pick up.
However, there are different levels of accounting investments that fit different businesses. Let’s talk about the options for:
- Beginners
- Intermediates to experts
- Plateaued experts
Beginner-Level Accounting Solutions
Startups and other very small, newer businesses may not have the capital or business activity yet to justify a strategic accounting method. Because of this, you may want to start out with any combination of the following bookkeeping and tax options:
- Handle your own bookkeeping or delegate to your support staff as part of their existing role.
- Hire an outsourced bookkeeping service.
- Use an online service to file your taxes or delegate to your support staff.
- Work with an outsourced annual tax accountant on your taxes only.
Intermediate to Expert-Level Accounting Solutions
As your small or medium-sized business starts to grow in revenue and activity, you can (and should) expand your investment. If you're looking for a more comprehensive and accurate accounting experience, the ideal solution is to:
- Hire an outsourced monthly accounting service to handle your bookkeeping, monthly accounting, and annual taxes under one roof. Many will even offer payroll services too!
Plateaued Expert Accounting Solutions
Of course, after a business enters the large business category, it can finally:
- Hire an in-house, full-service accountant or an entire accounting department.
Not sure what your ideal accounting solution is? Take our new quiz!
The Mistake: 13 Financials per Year
In the intro, I also mentioned that some restaurants want 13 financial statements per year instead of the usual 12, but our staff thinks this is a mistake. Let me elaborate on why people ask for this, and what we think is wrong with this.
Why Ask for This?
Restaurants deal with goods and services, and they operate in a fast-paced, high-volume environment that experiences spikes on holidays and weekends.
Since restaurants have so many moving parts, some want their financial statements to be more consistent. That means a statement every four weeks instead of every month, since months have a varying number of days. This would capture weekends evenly on statements to help analyze their performance more accurately.
What’s Wrong With This?
Two things.
First, even if your accounting service changed statements to every four weeks, this isn’t how banks operate. Consistency would be lost since bank records and financials won’t line up.
Second, monthly accounting is a fairly standardized service. Our team has made content in the past about how keeping our services standardized is how we’re able to keep our fees minimized. If accounting firms offer varying services to some clients, they would need to hire more accountants, raising fees for clients across the board.
Save Time and Money With Outsourced, Standardized Monthly Accounting
Now that you know about bookkeeping basics, what level of accounting you should have, and the pros and cons of 13 statements per year, are you ready to check out monthly accounting services?
If so, please consider CSI Accounting & Payroll! To see if we can be a good fit for your business, click the button below for a free consultation:
Not ready to talk? That’s okay! First, learn more about what it’s like to work with us by clicking the image below:
