In this article, we’ll look into the importance of bookkeeping in a restaurant business, examine six reasons a restaurant business might benefit from bookkeeping management software and guide restaurant owners or managers in finding the right software solution for their business.
Why is bookkeeping important for a restaurant business?
Let’s break down what bookkeeping is before diving into why it’s important for restaurant businesses.
- Bookkeeping is the practice of recording all expenditures and incomes, which demonstrates the cash flow in a business.
- Bookkeeping management involves recording all financial transactions, such as material expenses, service expenses, payroll, and income (like customer or client payments for goods and services).
- Bookkeeping is carried out regularly so that managers can track all information and money movements on their books to make key operating, investing, and financing decisions.
A bookkeeper is a person responsible for bookkeeping. While many restaurant owners and managers take on their businesses’ bookkeeping management to save costs, their success lies in whether they’ve had prior bookkeeping experience.
Why should restaurants do proper bookkeeping?
Bookkeeping management is a crucial function in the restaurant business for both legal and financial management purposes. It allows you to track detailed reports about the restaurant’s revenue, food, labor, and operating expenses. Based on these, a bookkeeper can calculate fluctuations in costs which will affect menu pricing.
Proper bookkeeping management also ensures your business is tax compliant with all business regulations. And can save you hours and hours of time when filing tax returns.
It can be easy to overlook the importance of matters such as keeping records of every penny spent. But, disregard for diligent record keeping can lead to confusion or even huge losses for any restaurant business.
Proper bookkeeping gives restaurant businesses a reliable measure of their performance. With meticulous bookkeeping, you can get a daily snapshot of your business’s operational costs and whether or not to adjust any operational activities.
6 reasons to invest in bookkeeping management software for restaurants
Bookkeeping management software can do the same job as a bookkeeper and costs only a fraction of a bookkeeper’s salary.
Here are 6 reasons restaurants have switched to these digital tools instead of hiring a bookkeeper.
1. An effective storage solution
A study has shown that restaurants generate more than 1.5 billion pounds of paper waste annually on receipts alone.
Paper receipts from customers and vendors can take up to 25% of a restaurant’s office space. Like other restaurant owners and managers, you may be keeping two or three copies of some documents and filing them in different places. This duplication creates waste and makes the workplace environment cramped and uncomfortable.
By digitizing receipts and storing them in bookkeeping management software, like Shoeboxed, you don’t have to worry about storage anymore.
2. An ethical choice for eco-conscious business owners
With many tree-based products being used and wasted, one estimate calculates the majority of Earth’s rainforests will be completely gone within the next 100 years. Going paperless is every business’ responsibility to help save the environment and protect the Earth.
Much of the paper waste produced by restaurants is customer bills and vendor receipts. Bookkeeping management software can help reduce this type of waste by digitizing receipts and documents.
3. Reduced supply cost
Paper-based records include the cost of paper and several sources of indirect supply costs. The indirect supply costs include costs of filing cabinets, printers and ink, and other stationery.
Such costs for restaurants change depending on the season. For example, with more receipts issued during the busiest periods and fewer receipts issued during off-peak seasons.
With bookkeeping management software, the supply cost remains the same through different points of the year.
4. A time-efficient option
Even in the most organized workplace, finding one receipt or invoice in a stack of thousands is a waste of your employees’ time. It goes from bad to worse if you’re in a rush and have to deal with difficult customers or merchants simultaneously.
A digital document archive with a powerful search function will greatly improve your team’s productivity. Bookkeeping management software helps restaurant owners and managers reduce time spent locating documents, thus allowing you to stay focused and engaged in more important tasks.
5. Improved accessibility
Easy data accessibility is one of the key qualities that restaurant owners and managers look for and benefit from when choosing bookkeeping management software.
With bookkeeping management software, customer and vendor data is searchable with a click and is a highly popular feature of bookkeeping management software.
6. Increased security
Keeping piles of files on-site can introduce several risks, including an incident of fire, poor storage conditions, and even theft.
If your business office catches on fire, your paper records could go up in smoke. Floods, earthquakes, and other natural disasters can also result in the loss of important business documents. If records are stored in moisture-prone areas, they’re subject to mold.
Bookkeeping management software is an optimal solution. Files that are digitized and stored on the cloud are much safer than in their physical form. Besides, digital documents are protected using multiple security solutions and restricted to limited users who have been granted access.
What is the best bookkeeping software for restaurants?
The variety of bookkeeping management software available in the market can confuse and overwhelm any decision-maker. Here are steps to take that will help you clarify what will work best for your restaurant.
Step 1. Identify your needs.
Do you need a platform that allows you to track inventory, receipt, and sales tax? Or something else? Make a list of your bookkeeping needs and prioritize them from least to most important. Understanding your needs before you start researching solutions helps you find the right software without any doubts or concerns.
Step 2. Look for features that meet your needs.
It’s easy to get starry-eyed about the abundance of features available with the latest bookkeeping software. Escape distractions, return to your list of prioritized needs, and evaluate only the software that meets the majority of your needs that you’ve outlined in Step 1.
Step 3. Check your budget.
The ideal software needs to be within your budget. Determine if you need to choose an alternative option or if your top bookkeeping software choice is worth the investment. Keep in mind that any software you purchase or subscribe to will only be a fraction of the cost of hiring someone to do your bookkeeping for you.
As you begin your journey toward a solution, consider Shoeboxed as part of your bookkeeping toolbox.
Shoeboxed is the complete receipt tracking and expense management solution for small business owners who are looking for the most versatile accounting app! Shoeboxed helps users scan paper receipts into digital data, create comprehensive reports, and prepare for tax seasons.
You might also be interested in:
- The Ultimate Receipt Organization & Management Resource
- 5 Best Ways to Store Your Business Cards
- 6 Simple Ways to Streamline Office Space
Shoeboxed is a receipt scanning service that supports multiple methods for receipt capture: send, scan, upload, forward, and more!
You can stuff your receipts into one of our Magic Envelopes (prepaid postage in the US). Use our receipt app (iPhone, iPad and Android) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.
Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.
Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed.
Try Shoeboxed today!