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Restaurant Accounting: A Step-by-Step Guide on Accounting for Restaurants
by Whiz Consulting Accounting and Bookkeeping ServiceDepending on the size, nature and location of the business, every restaurant needs accounting services to accumulate its revenue in every financial year. The restaurant’s primary trade activity is serving food and providing clients with accommodation. But the offerings of every restaurant differ from each other. Small restaurants offer only dining services, whereas big restaurants might offer some recreation, booking for celebration and business get-together. Accounting is not the main business activity of the hospitality industry but one of the core activities.
The hospitality industry consists of food & beverages, lodging (accommodations), recreation, and travel & tourism. And, restaurant accounting requires complete attention as it is a comprehensive industry and slightly differs from other businesses. Therefore, it is crucial to scrutinise its accounting process.
What do you need to track for performing effective Restaurant Accounting?
Payroll management of employees
Accounts payable
Inventory
Cash management of the restaurant
Sales
Reconciliation
Process of Restaurant Accounting
Setting up a System:
The first step is to set up an appropriate system to perform accounting & post transactions in the ledger. Setting up a system is beneficial to identify errors, adjust unadjusted trial balances and perform accounting smoothly. MYOB, Sage, Quickbooks and Xero are some software accounting firms used to perform accounting for the hotel industry. Many large organisations use software like Xero payroll in Australia to track, manage, and process their employees’ salaries.
Collection of Accurate Data:
The next step is to collect accurate & error-free data to perform flawless hotel accounting. It is a crucial step, and accountants should operate it correctly as even a minor mistake could cost your energy & time. Even if you plan to outsource accounting services for your hotel in Australia, consider sharing data with them via dropbox, google drive, or email daily/weekly as per your workload and requirements. Make sure you hire a reliable service provider in Australia and safely share data with them.
Identification & Recording of Transactions in Journal:
After collecting data, the next step is identifying the business transactions and recording them appropriately in journals. Initially, a business entity has to identify financial & monetary transactions. Also, only business transactions will be recorded and not the personal transactions of the owner’s account. After proper identification, the process of recording begins. The transactions in the hospitality industry are recorded based on the policy acquired by the entity, i.e., accrual or cash basis of accounting.
Processing of Data:
After identification & recording of transactions in the Journal, the fourth step initiates the final accounting process. It includes posting transactions in the ledger, making separate accounts for each sector, identifying errors, adjusting unadjusted trial balances, preparing financial statements, and finalising closing entries.
Review, Follow up, and Revision
The last step is to review, follow up, and revise the whole process. It is essential to review activities regularly and make revisions to avoid mistakes while processing the data. Also, it is crucial to note that all the valuable information related to the hotel industry is essential to revise as it keeps changing time-to-time based on customer demands.
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About Whiz Consulting 
Accounting and Bookkeeping Service
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Created on Dec 24th 2021 05:52. Viewed 122 times.
