The Top 3 Restaurant Accounting Software Tools For All Dining Formats

What is Restaurant Accounting Software?

No restaurant business can progress without paying attention to its finances. This can be accomplished by meticulous business accounting that involves systematically gathering, recording, simplifying, interpreting, understanding, and presenting financial data. Accounting software comes in handy, in this regard, helping with quick and accurate data processing and reporting.

An automated accounting process is far better than manual data collection, collation, and number-crunching -- processes that are slow, tedious, and prone to error,

Computerized accounting allows documents such as invoices, purchase orders, sales reports and forecasts, and payroll to be collated faster and with a greater degree of accuracy than manual methods. It records the organization's financial transactions, including cost management, fixed asset management, revenue management, profit and loss, accounts payable (money owed by the organization to vendors), accounts receivable (money owed to the organization, especially by customers), and reporting and analytics.

Accounting software generates real-time financial data covering varying timespans, such as a day, week, month, quarter, or year. This gives business owners a clear picture of the organization's financial health and allows the generation of financial statements, including statements of income, cash flows, stockholders' equity, and company balance sheets.

Restaurant accounting looks at specific variables like sales through online and offline channels, inventory purchase and maintenance costs, food costs, labor costs, the cost of goods sold (COGS), prime costs (a combination of COGS and labor costs), expenses on advertising and loyalty programs, money spent on sales tax, and on repair, maintenance, and business expansion (which may include the purchase of additional software and hardware).

Restaurant accounting cuts across various aspects of restaurant management, and closely tracks and interprets reports produced by restaurant point of sale or POS systems.

How Does Restaurant Accounting Software Work?

A restaurant accounting software can either be aligned with the cash method or the accrual method of accounting. Cash-based accounting involves recording income at the time it enters the bank account. Expenses are recorded when payments are made.

Cash-based accounting software supports invoicing services, including the creation of customer invoices and their export in the form of PDF files or other file formats. It specifies line items, rate of sales tax, and prices, and also allows the organization to manage payments.

A cash-based software also tracks payments made to suppliers of products and services, helps in generating and printing Internal Revenue Service (IRS) tax forms, and processing payments made to attorneys, independent contractors, and for royalties and rent. Cash-based accounting software also offers basic reporting, supplying data like tax summaries, payment history, and so on.

The accrual method of accounting, on the other hand, recognizes revenue and costs as and when transactions take place, irrespective of the time that the actual payment is made. Under this form of accounting, accruals are recorded in the balance sheet before the receipt/payment of money.

Accordingly, accounts payable points toward a liability account reflecting the amount of money the company owes its vendors, but is yet to pay. Similarly, accounts receivable refers to an asset account that records the amount of revenue the company has earned and is yet to be paid.

This gives restaurants a better view of the costs they incur and their income sources. A business dealing with a sizeable revenue (let's say over $1 million) should always opt for the accrual method of accounting.

However, some businesses hesitate to use the accrual method because it's easier to simply monitor cash out and cash in. The accrual method may need organizations to close their books frequently.

Accounting software helps by automating and streamlining the accrual accounting process, thereby cutting down error. Accounting software also helps manage recurring journal entries, and sub-ledger reconciliation and balancing.

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What's the Purpose of Restaurant Accounting Software?

Accounting software help restaurants keep a tab on their finances, which is vital for the business to stay profitable, and competitive. Without reining in costs and expanding sales, no restaurant can stay in business for long. Accounting software ensures that financial monitoring is done automatically and cuts the dependence on human accountants or restaurant employees, who lack accounting skills, tasked with the job. The latter could end up botching up the accounts.

Accounting software records and computes the money earned and spent by restaurants. It reminds businesses of the payments they have to make. Automated expense tracking ensures that you have a clear idea of your expenses like Food Cost , labor cost, repair and maintenance costs, taxes, etc. This ensures that you don't run out of cash flow.

These solutions come with cash management features that display precise cash situations by letting you reconcile cash transactions with your bank statements.

Moreover, automated tax calculations, form fill-up, and even filing ensure that you don't have to break your head over processes that are inherently complicated and time-consuming, and don't fall foul with tax authorities.

Sophisticated accounting software offers improved forecasting and budgeting solutions. Asset management functions of accounting software involve management of the complete asset financial cycle, including acquisition, depreciation, capitalization, and retirement of assets like the restaurant building, furniture, refrigerators, air-conditioners, POS hardware, and so on.

Automated data reporting and analysis supported by accounting software borrows from various other systems of restaurant management like the POS, inventory management, workforce management, supply chain management, food safety management, task and time management, and business intelligence systems, and creates actionable insights in the form of attractive visuals.

Analysis of financial data helps businesses identify cost escalations and obstacles to growing revenue. Accordingly, a restaurant will be able to reduce overpurchasing, employ only the workers it needs, Reduce Overtime, discontinue menu items that don't sell well, look for suppliers who offer better cost advantages, calibrate customer relationship management and advertisement strategies, prioritize bestselling products, and look for ways to support branches/franchise stores turning out weak results.

Furthermore, the embedded security and audit control features of accounting software defend organizations against fraud.

Essential Features of an Accounting Solution

Accounting systems come with features that enable businesses to handle billing; monitor accounts receivable and payable; and process, print, and mail invoices. They maintain an exhaustive list of details, like the amount to be paid/received, who has to be paid/whom to receive payment from, and when to pay/collect dues.

Accounting systems also act as a repository of basic information on customers and vendors like names, account numbers, addresses, etc. Highly sophisticated accounting solutions can remember product pricing details too.

Automated invoicing ensures that revenue is not delayed even when you forget to send out invoices manually. Late reminders sent out by the accounting software ensure timely payment. Some accounting solutions go the extra mile in making transactions quick and hassle-free, letting customers pay simply by clicking a button on electronic invoices. This way the vendor won't have to waste time getting cheques processed, and making deposits in banks. Payments are also more secure and quickly processed this way. In fact, accounting systems can be designed to handle debit/credit card payments as well.

As far as your purchases are concerned, accounting software can also generate purchase orders. Moreover, accounting software helps in tracking all the credits (in the form of rewards and returns) handed out by vendors, helping businesses keep costs down. Payments can be automated too. Automated cash projections allow organizations to take timely cash decisions related to borrowing, investment, and so on.

Accounting software can also maintain a database of IRS tax forms, and as mentioned earlier, calculate taxes, fill up forms, and even file taxes for you. Managing payroll is a vital part of accounting.

Accounting solutions ensure that the organization can effectively handle multiple pay schedules, different kinds of compensation (like salaries, wages, commissions, profit-sharing, etc.), and benefits (like medical insurance, paid parking, retirement plans, and so on). Accounting software not only allows pay cheques to be directly deposited to bank accounts but lets businesses schedule this process, let's say at a particular time of the month.

Accounting software also supports the import of data from bank accounts in real time into accounting. It also helps keep track of and reconcile multiple bank accounts.

With the help of accounting solutions you may also generate customary reports such as balance sheets (liabilities and assets), statements of income (profit and loss), cash flow statements, accounts payable, accounts receivable, and payroll summary. Accounting solutions allow you to customize reports too.

Data visualization in the form of pie charts, tables, graphs, and color codes (to differentiate between data categories) makes accounting software extremely helpful for data analysis.

Accounting software also comes with features that let you predict costs and revenue, undertake inventory management, and streamline supply chain and shipping processes.

How to Pick Restaurant Accounting Software That's Right for You

The best accounting software for restaurants is cloud based, which allows data to be accessed and business performance gauged in real time, whenever you want to access them, even if you are located far away from your business establishment, and whatever mobile device you may be using.

Accounting software solutions should also be able to automate processes. Dealing with massive sets of numbers and myriad calculations can be mind-numbing and tedious after a point. A machine, however, doesn't have such compulsions. You, therefore, need machines to do the number-crunching for you and generate accurate and effective inferences out of the tons of numbers that reports throw at you. These insights can actually be used to improve operations. Moreover, automating workflows leads to reduced effort and time spent by restaurant employees manually keying in data. It also ensures that errors, which can prove disastrous for the organization, can be stamped out.

Accounting solutions must also support accounts receivable and accounts payable reporting since it is important for businesses to have a clear knowledge of both sides of the cash flow. Moreover, a good software solution will give you a restaurant chart of accounts that is easy to use. A chart of accounts for restaurants is a list that categorizes every financial transaction undertaken by an organization and facilitates the monitoring of the financial health of the organization. A chart of accounts for a restaurant provides an overview of assets, revenue, liabilities, COGS, and costs incurred over a particular period.

It is also important for accounting software to support integrations with all parts of the restaurant management system, so that inputs from each system may be used to keep a tab on the restaurant's finances. Accounting software must also connect seamlessly with bank accounts so that manual labor can be minimized. Furthermore, since the information stored in the accounting software can be accessed from the cloud by anyone, accounting software enhances collaboration with accountants for effective financial oversight.

Running a restaurant is an expensive venture. From labor costs to food receipts, every business runs up a huge bill.

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3 Best Accounting Software for Restaurants

1. Zip Reporting-
This is one of the best business intelligence and restaurant management software solutions for restaurants. It gathers complex business data and translates it into easy-to-understand, actionable insights. Zip Reporting generates business intelligence reports for multiple locations/stores easily and quickly. The user can then toggle between the reports for various locations to get up-to-date information on the performance of all the business sites at once and at the same place. The customization feature of the software lets users quickly select the required information. It consolidates all the relevant business data in one place. Cloud syncing allows data to be accessed on the go, anytime, using a handheld device. This software can be downloaded from the Hubworks app store.

2. Sage Intacct-
This cloud finance software helps automate complex billing processes. It allows businesses to monitor multiple accounts with visibility in real time, thereby aiding cash management. Sage Intacct helps in automating and speeding up quote-to-cash cycles that represent a sales cycle from a quote being shared, to a deal being closed. The reporting and dashboard features of the software generate quick insights. It lets users undertake business analysis on demand, offers robust predictive analytics and supports decision-making in real time. It comes with rich data visualization. Users can select from more than 200 pre-built visuals and customize them.

3. QuickBooks Online-
It lets users access accounts and manage businesses anytime and from anywhere on any mobile device. With QuickBooks Online, sales receipts, and customized invoices can be easily produced. Banking integration, moreover, allows transactions and financial statements to update automatically. Customizable dashboards and reports let business owners monitor the financial health of their organizations in real time. The software allows recurring payments to be scheduled so that time can be conserved. It comes with a time tracking feature that lets you clock worker time apart from billable hours. In fact, billable hours by employees or clients can be monitored and added automatically to invoices.

Accounting Software FAQs

Q. What is the difference between desktop and cloud based accounting software?

A. A desktop accounting software needs to be installed on a computer. Accounts-related data have to be saved on the computer too. A cloud based accounting software, on the other hand, can be accessed through the internet and doesn't need to be installed on a fixed computer terminal. Cloud accounting software can be run on any mobile device, whether it is a smartphone, tablet, or laptop. Cloud accounting systems offer several advantages over desktop versions and are also faster and cheaper.

Q. Is cloud storage of financial data safe?

A. Businesses don't have to worry about the safety of storing financial information on the cloud. They have to, however, ensure that the software service provider is credible, and reputed and that the software has not suffered security breaches. Before selecting accounting software, see to it that it employs data encryption.

Q. Can you manage your taxes with the help of accounting software?

A. Yes, accounting software does help you manage taxes. Accounting software may act as a repository of common tax forms. It lets you generate and print 1096/1099 IRS tax forms, and helps in processing 1099-MISC payments, which are miscellaneous payments rents, awards, prizes, and healthcare payments. Software solutions can help you fill up tax forms, calculate taxes automatically, and even make tax filings. This saves you a lot of time and effort and helps in avoiding late fees.

Q. Will you require training to operate accounting software?

A. No, you do not need any special training to run accounting software solutions because they are simple in design and easy to use. You can use the software yourself to track income and costs, generate invoices, and print business intelligence reports.

Restaurant owners have to spend hours on the phone with their accountant or bookkeeper just to find out what their margins are and where they are losing money.

The best restaurant accounting software is designed for the unique needs of restaurants. It's easy to use and has all the features you need, from invoicing and inventory to payroll and taxes.

Download now!