Restaurant Accounting Software: An Essential Tool You Should Start Using

Choosing an accounting software is just as important as the menu you create. When starting a restaurant the last element  you want to think about is the accounting that will need to go into running a smooth business. From the cost of food and drinks to the payroll required to pay staff, restaurant accounting is the tool that will give owners the insights they need to make business decisions and improve their businesses performance. 

What Is Restaurant Accounting Software? 

Restaurant accounting software is the tool used for owners to manage various pieces of their finances when running a restaurant. Accounting software acts as a reporting and information source for owners on all things finance related to the business.

Accounting software typically integrates with the bank accounts of the business and pulls in all transactions the business has made. From there the software allows you to bookkeep, or record the transactions to the appropriate profit loss or balance sheet accounts.

Once you have updated your books, the accounting software may reconcile transactions, ensure all amounts are balanced, and allow owners to report on things such as net income, or profit, debt to equity, owner equity, payroll as a percentage of sales, and so on.

Once familiar with the ins and outs of this tool, owners will be empowered to make smart, timely financial decisions for the business as well as get a sense for how past decisions have been performing.

Why Do Restaurants Need Accounting Software?

While it's not required for any business to have accounting software, it is typically a smart idea. If you, as an owner, are starting to run short on cash in the checking account the first place you would want to look is your accounting software to understand what costs are running up and potentially higher than they should be.

Or maybe the state you operate in requires you to quarterly report how much alcohol or food you’ve sold for taxes. With accounting software this information will be readily available. Accounting software is the thread that connects finances to the operation of your business.

How Much Does Restaurant Accounting Software Cost?

Accounting software varies in pricing, from free cloud based options, to monthly subscription options for owners. Owners also have the option to hire bookkeepers or accountants on top of purchasing this software, which come in a variety of fixed or hourly wages. It is important to understand how you are going to structure the end to end accounting system for your business when understanding cost.

While the costs may be surprising to some owners and on the surface seem like incremental costs which may not be necessary, it is important to point out that not having timely and accurate financial information about the business may result in extra cost catching up in financials or hiring outside help to support. It is important to consider the cost of not having software when making a decision.

How Is Accounting Software Different for Restaurants?

Accounting software for restaurants is similar to businesses which are not restaurants. Most accounting software comes standard and is customizable to the business. A restaurant may set its cost of goods up in its software as a food cost versus a services business not having cost of goods sold at all.

It all comes down to the configuration. This will all impact how the accounting software performs reporting. There are different functionalities and reporting capabilities of options which owners should understand before making a decision

What’s the Best Accounting Software for a Restaurant?

While there is no way to crown the best software it is important to understand which softwares exists and what the pros and cons of these softwares are. Owners should be familiar with options before making a decision.

TouchBistro

An all in one restaurant software which incorporates point of sale systems in their package

• Pros: All systems integrate seamlessly with one another i.e. POS system, accounting software, receipt printers
• Cons: Existing equipment may not integrate, dependency on one system

Restaurant 365

Another restaurant management software which includes accounting software

• Pros: Great customer support and inventory management systems all integrating seamlessly
• Cons: Dependency on one system, new systems implemented may not integrate

QuickBooks Online

An online cloud based software for accounting which incorporates invoicing and payroll among other features. 

• Pros: One login will work on any computer as its cloud based, highly customizable
• Cons: Becomes complex and hard to troubleshoot if issues occur, may require experts. Requires monthly subscription

ZipBooks

Another cloud based accounting software which incorporates invoicing

• Pros: Software is free
• Cons: Limited functionality may require owners to seek other softwares to integrate

Xero

Cloud based accounting software which has additional features such as payroll and ability to hire experts from within the app

• Pros: Software is  free
• Cons: Add ons have incremental costs which may add up quickly for owners

Plate IQ

Accounts payable software which allows for management of vendor payments

• Pros: AP can become chaotic with using vendors for food, supplies, etc; solution for an all in one AP management system
• Cons: Will require additional accounting software for an end to end finance system

DAVO

A solution for the complexity of sales tax, implementing with your POS system, DAVO will automatically calculate your sales tax needs

• Pros: Remove difficulty in determining tax liabilities as the software will automatically calculate obligations
• Cons: Dependent on the business utilizing a POS system and integration

Food Service Ace

An end to end restaurant management system primarily focused on mobile for use on the go

• Pros: Allows owners to access finance information from anywhere as the application is cloud based and mobile focused
• Cons: Reliance on one system, may not integrate with other systems or applications

Wave

Cloud based accounting software which has additional features such as payroll and ability to hire experts from within the app

• Pros: Software is  free
• Cons: Add ons have incremental costs which may add up quickly for owners

MarginEdge

An end to end restaurant management software with focus on automations for back office tasks

• Pros: High retention of current users, focus on automations, and seamless integrations
• Cons: High monthly cost associated with the software

FreshBooks

More of a basic accounting software with focus on ease of use

• Pros: Easy to use, includes time tracking, and invoicing functionality
• Cons: Has a monthly fee but not as many features for the dollar as other cloud based options potentially