QuickBooks

Restaurant Accounting with QuickBooks: Recording Daily Sales

Written by Doug Sleeter

A restaurant’s success relies on an effective back office accounting system, and QuickBooks financial software can be a critical part of that success. QuickBooks can be used for purchasing, bill paying, tips tracking, gift certificates, cash management, time tracking, and payroll. However, restaurants that choose QuickBooks for their accounting will need to understand how to properly set up and use QuickBooks to meet their unique needs. In this article, we’ll talk about how to “zero out the cash register” when recording your daily sales.

Update 10/30/2015: The information in this article as been updated in the latest edition of our eBook,Restaurant Accounting w/QuickBooks.” We recommend that you reference the more up to date information in that publication.

 

Zeroing Out the Cash Register

Each day, at the end of business, you’ll “zero out” the cash register or POS system and create the reports of the day’s sales. With that information, you’ll create a single entry into QuickBooks for each server that will record his or her total sales for the day. Start by zeroing out the cash register or POS system and create a “Z-tape” similar to the one shown here: Z-Tape for employee Madona Blundell Notice that the Z-tape might not give you all of the line-by-line detail you need for the entries in QuickBooks, so you may have to do a bit of extra figuring to come up with the exact lines you need for the QuickBooks entry. For example, the Z-tape shows $61.43 was collected in tips. You need to add that into the Daily Sales sales receipt as shown below. In addition, you’ll also add two additional Items specifying the amount of cash you paid out to the server at the end of her shift. In this case, Madona was paid all of the $61.43 in tips that evening in cash, so you should record the Tips Paid and Tips Out Liability Items at the bottom of the sales receipt with opposite dollar amounts.

A Quick Note about Items

Before you create your sales receipt in QuickBooks you will need to set up some basic items in the item list, such as we show here. for the full description of each item type and how it should be set up, refer to our Restaurant Accounting with QuickBooks ebook. The ebook packages includes a sample company file with the item list already set up for you. Restaurant Item List

Entering Daily Sales by Server

This daily sales receipt is critical to keeping proper accounting records and driving the reports shown below. Follow these steps:

  1. From the Customers menu, select Enter Sales Receipt.
  2. Enter All Customers in the Customer name field and continue entering the daily sales information as shown below.
  3. Continue entering sales receipts for each of the servers for the day.

Daily Sales Summary using Sales Receipts – Gift Certificates and Tips accounted for on the form Enter a different sales receipt for the total sales for each server, each day. Note the following about the daily sales receipt:

  • Enter the server’s initials, the weekday, the total count (number of guests), the number of to go orders, and the average ticket into the custom fields as we have set up in the form header.
  • Enter the total sales for each service item (Food sales, Bar sales, and any other sales items you track), followed by a subtotal (use a subtotal item). This is a subtotal of the sales, gift certificates, and tips collected.
  • Enter the sales tax item(s) and the amount collected (per the cash register). Then add another subtotal to show the total collections “to account for.”
  • Enter each of the payment types including cash, gift certificate redemptions, and credit cards, followed by a third subtotal. This third subtotal should match the “total to account for” subtotal a few lines earlier. If it doesn’t match, there is either a cash shortage or a cash overage.
  • Use the Over/Short item with whatever amount is needed to zero out the total at the bottom of the sales receipt. If the amount is positive, the cash drawer is over by that amount. You should scrutinize this figure over time to detect errors and/or theft.
  • The last two lines are where you enter two items to handle tips paid out in cash to the server. The first line is a positive number which reduces the Cash Tips Holding bank account, and the second line is a negative number that reduces the Employee Tips Payable liability account.

Notice that sales tax is entered directly on the face of the sales receipt, and the Tax field at the bottom is set to N/A. This is important for properly tracking sales tax reports and making sure that the exact sales tax collected by the POS system is recorded into QuickBooks.

Memorized Sales Receipts

Memorized transactions allow you to efficiently enter frequent transactions. Since you’ll be entering the same basic information each day for each server, but with different dollar amounts, you could speed up your data entry by memorizing sales receipts for each server for each day of the week. To memorize a Sales Receipt, fill it out completely and then select Memorize Sales Receipt from the Edit menu, or press Ctrl+M. Then give the transaction a name that you’ll recognize the next time you need to enter a similar transaction. The screen shot below shows the memorized sales receipts in the sample file from the Restaurant Accounting with QuickBooks toolkit sample file, organized by server and day of week. Memorized Transaction List To use a memorized transaction as template for a new transaction, display the memorized transaction list by pressing Ctrl-T and then double-click on the transaction in the list. Make the necessary changes before saving the transaction.

Handling Accounts Receivable in Restaurants

If your restaurant has credit customers, my recommendation is that you separate out the credit sales from the cash sales during the day. Record the credit customers outside of the normal POS system (i.e. do not ring up their sales), but instead create a separate QuickBooks Invoice for each sale to your AR customers. You’ll also record payments each day as they come in through the Receive Payments feature of QuickBooks. This way, you’ll be able to track your Accounts Receivable in QuickBooks normally, and you won’t struggle to separate out the AR sales from the cash sales each day.

About the author

Doug Sleeter

DougSleeter (@dougsleeter) is the founder and former CEO of The Sleeter Group, an international network of accounting software consultants, and the former producer of SleeterCon, an annual conference and tradeshow for accounting professionals.

In 2015, he sold The Sleeter Group to Diversified Communications (www.divcom.com) and the company has since become The Accountex Network.

He is a passionate leader of innovation and change in the small business accounting technology world. As a CPA firm veteran and former Apple Computer Evangelist, he melded his two great passions (accounting and technology) to guide developers in the innovation of new products and to educate and lead accounting professionals who serve small businesses.

Always in search of the next big thing, he is currently focusing on digital currencies and blockchain technology. He believes these technologies will change virtually everything in global commerce.

The CPA Practice Advisor recognized Doug as one of the "Top 25 Thought Leaders" in the accounting profession and he has been named to Accounting Today's "Top 100 Most Influential People in Accounting" each year 2008 through 2015. In 2013, he was recognized by Small Business Trends with the Small Business Influence Champion award.

In the early 1990s, Doug was a pioneer in developing the first QuickBooks seminars in the country and has since built the largest group of accounting software consultants in the small business accounting profession. Doug serves on several advisory boards for technology companies and has consulted with numerous industry leaders including Intuit, Sage, Apple, and Adobe Systems. 

Doug is the author of numerous books and courseware materials including The QuickBooks Consultant’s Reference Guide, and QuickBooks Complete, a college textbook.
 
Doug attended both the University of California Santa Cruz and Santa Clara University and holds a Bachelor of Arts degree in Computer Information Systems. Doug and his family live in Pleasanton, CA. Doug's hobbies include woodworking, golf, and lifelong learning.

77 Comments

  • Where were you when I ran an restaurant and figured all this out myself? This is a much better system than the one I made up, though mine worked. What a useful article!!!!1

  • Thanks Varada, It does work nicely, and the best thing is that it can be accomplished with so little data entry each day. Check out the full toolkit and eBook in our store. The link to the product is at the bottom of the article above.

    • I have been searching the internet for help with restaurant receipts but have only found a few that made any sense. I’m still struggling. I tried to order the book QuickBooks for the Restaurant but it can’t be delivered here in Ontario. Is there any way I can obtain this book without having to go through Amazon?

    • The biggest problem with recording sales as service, is it disconnects the inventory from the sales. If P.O. and inventory is recieved, it never leaves the inventory in hand. QB can not can not keep track of how much meat was used in 5 different dishes. Inventory must be zero out each month, and the is no track of cost of food.

      • I generally wouldn’t be tracking items that have a short shelf life, such as “meat”, as an inventory part. You’ll spend too much time trying to keep things in balance. You’ll have variable consumption, waste, scrap and more. All for an item that won’t stay in your inventory for very long. Setting aside the issue of a “restaurant”, just looking at what we typically recommend for these kinds of items in inventory management situations, these are items you don’t track quantity on usually.

        • As I’m sure you know, the Cost of Food is very important.. Portion control and waste are very important in a small restaurant.
          Once I setup P.O.’s on food items ( memorized) , which i faxed to my suppliers, and then received item,. It didn’t take much time to tracking perishables.
          I had monthly reports on food cost, which I could go over with my kitchen. The problem is the sales report does not keep track of inventory, as you set it up. If I don’t zero it out periodically, then the balance sheet was garbage. I had to setup a separate spreadsheet to track food cist. It also helps with menu cost as prices vary.
          I know your method works, and it a good start, but far from ideal.
          I just wish QB, woke up, did this automatically.
          By the way the Aloha POS was no better in this issue.
          Thanks for all the good advice, and a good book, they were very helpful when I started.

          • Tom,

            Thanks for the kind words about the book.

            Regarding the importance of tracking food costs, we completely agree that it’s very important for restaurants to track and manage them closely. In the book, there is a long section that discusses this in depth and offers ideas on how best to handle this in QuickBooks. While we recommend against using the inventory features in QB, we do offer specific recommends for how to record periodic journal entries to adjust the balance sheet and cost of goods sold.

  • your Daily sales report will not import into my version of QB pro 2013. there are custom fields not available in my company file.? So it looks like any wother sales invoice. doesn’t help me at all.

    • Nick, are you referring to a “report” or to “sales receipt template”? There is a “Restaurant Daily Sales” template, as far as reports I’m not sure which one you are referring to.

      Assuming you are talking about the “restaurant daily sales” sales receipt template, I was able to import it into my test file. But,I already had some custom fields set up, so that might be a difference. You can create three custom fields in your “customer” list; “Count”, “ToGo” and “Avg”, and the imported template should use those. If you have any other difficulties with this, let us know.

    • Hi Nick,

      If you are trying to import the “Restaurant Daily Sales.DES” file, which is a Sales Receipt template, you should get a message that says “The template you have chosen contained custom fields that are not available in your company file. These fields have been removed.” Note that the fields we use in this sales receipt template are specified in detail in the eBook starting on page 12. You can still import the template, but you’ll need to add those custom fields into your file.

    • Hi Carl,

      The guide is not directly adaptable to QBO. The methods we use are very specific to QuickBooks Desktop. QBO does not have the “payment” item type, so the “zero-dollar sales receipt” wouldn’t be possible.

      I’m sure we’ll come up with a good answer for restaurants who want to us QBO. If anyone reading this wants to take the challenge, please contact us.

    • Thanks Laura, Glad you like the solution. The key goal is to limit the data entry job for the restaurant, while still driving their key financial reports.

      Also, it’s completely independent of which POS they use. Just take z-tapes and enter them as zero-sales-receipts.

      Thanks for chiming in.

  • Doug can you tell me is there anything similar to this published in Canada? I am sure I can use a lot of this but our tax system is much different.
    Thanks!
    Sandy

  • Hello Doug,

    Great article! I have been a bookkeeper for a few years now, and was curious what differences a restaurant would have in its accounting methods. I noticed that you mention the credit card sales as being a receivable. This seems off to me. Is this because it is based on a cash basis and not an accrual?

    Thank you!

    • Virginia,

      You might have misread. I was referring to “Credit sales” (as in sales that hit Accounts Receivable as opposed to receiving immediate payment) when talking about AR. Not credit card sales.

  • Why is gift card redeemed a discount? I don’t get it.I get gift card sold is a current liability. Can you explain

  • Hi Doug,

    I have a scenario where there are multiple taxing bodies taxing the same daily sales amount. Unfortunately the Group Tax item is not allowed on the sales receipt. Is there a workaround for this?

    • Hi Jason,

      I don’t have a specific workaround for this other than to suggest you track sales tax in your point-of-sale system and use that data for reporting sales tax instead of QB.

      The methods we recommend don’t cover every situation. I wish we could, but we’re working within the limitations of what QuickBooks does, and with a goal of keeping things as simple as we can for the daily bookkeeping.

  • Hi Doug,

    I noticed on my POS reports the sales tax collected is under $3-$8 every day. (When I do the math and take my daily taxable sales multiplied by my tax rate) I am trying to track down if an employee needs more training, etc. But, in the mean time, I still have to enter my daily sales. Should I take the sales tax from the POS and enter in Quickbooks exactly what the POS sales tax is or should I enter in Quickbooks what the sales tax should of been (back sales tax into sales) and offset in my cash over/under account. If I don’t correct the sales tax in Quickbooks, it seems that I am overstating my income. Thank you for your time.

    • Hi Amy,

      Yes, we recommend to take whatever sales tax was collected by the POS and enter it directly onto the Zero-Dollar-Sales Receipt. Do not let QB calculate the tax at the bottom, but instead use the N/A sales tax item we set up earlier.

      But you should figure out whether the POS is correctly taxing or not. Then make the fixes in the POS system so your Z-tapes will be correct. Also, prepare them for a possible underpayment penalty on sales tax.

  • I purchased your Restaurant Accounting with QuickBooks and have set up sales receipts as described in the book, however I am off by the tips. I have set up the Tips Collected and it has a positive amount, Tips Paid with a positive amount and Tips out Liability with a negative amount. I have made sure that all the sales reflect only sales, no tips included. I have a balance on the sales receipt exactly the amount of the tips, the balance is a positive number. Not sure what the best way to communicate with you company, please let me know how to get this question answered.
    Best regards,
    Gina Wade

  • Hi Gina,
    I’m working with Doug to rewrite the Restaurant Accounting with QuickBooks book.

    I’m curious about the amount of cash you recorded as received with the payment item. Was it reduced by the amount of cash paid out for tips? This could be causing the discrepancy.

    For example, if $500 was collected for the day and $300 was paid in tips, the CASH payment item should be shown as $200.

    Does that help?

  • Thank you for this article. Question: For Sales Tax, my QB version does not have a Sales Tax Return as a Type, what other type can I use???

    • Tabitha,
      Do you have the sales tax preference turned on? Go to edit>Preference and click on ‘sales tax’ and go to the company preferences tab. That should help.

  • Hi Doug,

    Do you have any advice for doing restaurant sales receipts in QB Online? I haven’t had much luck in finding information. If you could point me in the right direction regarding getting info/training in using QBO for restaurants, I would appreciate it. Will the updated version of the e-book include QBO? When will it be available?

    Thanks so much,
    Mary

    • Hi Mary,

      Our materials use QB Desktop. The same methods won’t work with QBO because we use zero-dollar sales receipts that include payment items and sales reps to simplify the amount of data entry needed for the restaurant, while at the same time properly tracking sales tax, tip liabilities, gift certificates, and house accounts.

      In the future, we hope to publish something that will work well in QBO, but as of now, the features in QBO don’t allow us to use the same methodology.

  • Hi Doug,
    We create import files for QuickBooks for the hospitality industry. We can import all the labor info for the workers but we have yet o find a way to import gratuities that servers receive from customers. Is there currently a way and I understand that the online version of QB does allow GL or Payroll import. Is that correct?

  • Am needing help with Quickbook Mac Version. Am considering your book to help me. Are the versions similar?

    • Hi “CA”

      You can use some of the concepts here with QuickBooks Online or QuickBooks for Mac, but several changes to the set up will be needed and the screenshots will not match. We do not however, go into any detail on how the methods differ from QuickBooks Online or QuickBooks for Mac. You can use this as a guide and develop your own workflow to adapt features that may not be present in other versions of QuickBooks.

  • Hi there,
    My husband and I own a small restaurant and have been struggling setting up the tips received each day both in cash and on the credit cards. We do not have employees and I understand that the Daily Sales in Quickbooks need to be zero and then the corresponding ‘payments’ we will select to match our deposits. My question is this. Tips are not subject to sales tax, so how do I set up an item for the tips and still have it as a “Payment.?” So if our total sales were $716 and $110 were tips.. how would I do that?

    • The Tips Collected item should be set up as a non-taxable “service” item. Then, enter the Tips Collected amount on the daily sales receipt as shown in the screenshot above. Notice it says “non” at the right. That indicates it’s a non-taxable item.

  • Doug,
    Respectfully, I have a few tweaks to this process. I use Other Charges as the item type since tips are really not part of what we “sell” and use “EX” instead of non taxable sales tax code. This separates out items that are excluded from sales tax reporting from items that are non-taxable (but still reportable). We revised this in the new book, but that methodology is not reflected in this article.

    • Hi Stacey,

      I think I follow where you are going with this post. I have been searching for some time on how to separate out our tips. I get the non-tax aspect, but it would still show up as income for our B&O tax liability. So if I have this straight, you created an additional sales tax code (Ex) that creates an additional column when I look at my tax revenue or liability summary reports. However it still shows up on a sales summary report as income. I noticed in the example above there are actually three tips related transactions and that you mention a book in your post. Do you have a reference to that book where I could purchase it to see how to set up the other items and what accounts they tie into. Thanks.

      • Hi Liz,

        Since we use a “discount item” for the comped food, just use that comp item to record the amount of comp meals at the gross amount (sales plus tax). The food sales will include those comped items, the sales tax will also be calculated and recorded normally, and the comp discount item will simply subtract the amount that you did not collect from customers.

        • To go one step further than what Doug posted, I use a sales tax code of “EX” on the discount item setup so the discount item is not factored in on the sales tax revenue report. In essence, the discount item on the sales receipt form is just deducting from the total sales. Instead of getting paid for the meal and debiting the bank account, the discount item debits a marketing expense account (or whatever account you decide to use to track comps).

  • Hi I do bookkeeping for a salvage yard I’m currently going to get a job in a restaurant I really want to be able to do very well with the bookkeeping there as it is a better job than working a salvage yard my question is where do I get the information that I need for the restaurant to be able to run their QuickBooks efficiently

  • Sorry if I repeat
    The problem with recording sales as devices is it disconnects the inventory from the sales.

  • Quick question in regards to the Over/Short item. If I am short $10 cash it will record into the Over/short account but my cash drawer “bank” on the chart of accounts still thinks that the $10 should be in the till. How to I correct that balance or is there something else I’m missing?

    Thanks…great article!

  • While creating a Sales Receipt recording the Daily Sales, I was having a problem where I couldn’t get the sales receipt to zero out. I needed to record the Tips collected via Credit Card. I was following the instructions in the book using the Items for Tracking Tips and was continually having problems getting the sales receipt to zero out. I contacted Stacey Byrne and she spotted my error. The servers tips were not represented on the Z-tape I was working with. I researched the Credit Card Total that got deposited in the bank account and saw more money was getting to the bank than the credit card total on the Z-tape. To solve, I had to create a new item called Tips on CC (type = payment) that I used as the last entry on the sales receipt. I had this item group with other undeposited funds so I could grab all to make my daily credit card deposit. I hope this helps someone. Kudos to Stacey for helping me.

  • Your expenses include your inventory, labor costs, occupancy expenses, restaurant insurance cost, and other operational expenditures. Know your inventory, how much you purchase each week, and your cost of goods sold. Keep records of how much you pay your workers, and document all of your operational expenses so you know how much money you need to earn each week to break even or earn a profit.

  • We are setting up quickbooks pro 2017 for a bar and would like to do a P/L by day of week and day shift versus night shift. How can we set up our daily sales receipts to reflect a P/L report for these? I was thinking setting up different customers called Monday Day Shift, Monday Night Shift, etc. Is there an easier way to do this?

    • I would use 2 classes in QuickBooks – one for day shift, and one for night shift (you have day-shift and night-shift set up as day parts in your POS, correct?) These will come over to POS Link automatically.

      Then for viewing the reports I would follow these directions to view by day of the week: https://accountants-community.intuit.com/questions/285975-can-i-see-my-sales-volume-by-day-of-the-week-monday-tuesday-weds-etc

      And in addition select the day-shift or night-shift class to filter by time of day.

      • Erik,

        Thanks for the tip here. Your idea of having classes in QB POS for day/night shifts should work fine (I never tested that), but in any case, I think it will only work for revenues, not expenses.

        If the goal is to have a complete P&L by day with two columns (one for day, one for night), you’d need to figure out ways of allocating all the expenses to each class. It could easily be done with journal entries, allocating totals by % across the two shifts (classes).

    • We are setting up quickbooks pro 2017 for a bar and would like to do a P/L by day of week and day shift versus night shift. How can we set up our daily sales receipts to reflect a P/L report for these? I was thinking setting up different customers called Monday Day Shift, Monday Night Shift, etc. Is there an easier way to do this?

  • Thanks for the advice. Instead, I added multiple Jobs (Mon day shift, Mon night shift,etc) under the 1 customer (all customers). I think that will work just fine. I’m using the classes for different departments as we are an Elks Lodge and offer golf, pool, clubroom so I need to distinguish income and expenses between them.

  • I have set my memorized sales receipts for my daily bar sales and after I enter my transactions, quickbooks error message “you cannot make a deposit into undeposited funds, choose a bank or asset account. What am I doing wrong? I have it zero’d out.

  • I have set up my sales receipt for my daily bar charges but I am having an issue with the credit card payments. In our old software (client bookkeeping solutions) I would put the credit card in as a deposit and then I would take it out as a payment so it would zero out and I had both of these set up under a credit card clearing chart of account. Then when the credit card transactions hit the bank, I would deposit directly into the bank register. I did this because credit card company would deduct their fees from total charge. Now in quickbooks, I have all my credit card payments just sitting in the undeposited funds and I can’t seem to match the bank credit card payments with the ones in the undeposited funds account to get them deposited. Is there a way I can enter them on the daily sales receipts as a credit and debit in the credit card clearing account and then manually enter them as a deposit in the bank register?

  • Why do you set up a different sales receipt for each server? Our servers split tips evenly between each other for cash tips and we do the same with cc tips. We don’t keep track of the number of people they wait on or their individual sales for the day since they all work together with the customers. I really only need to track just the tips for each server. Couldn’t I just set up different tip items (eg. Tom tips collected, John tips collected, etc.) Is there something in payroll that won’t allow for this?

    • Hi Kristi,

      You should be fine with just setting up items for each server’s tips collected, and recording just a single sales receipt each day. And it greatly simplifies things for you. We wrote this with the assumption that you’d want to track each server’s sales separately.

  • I purchased Restaurant Accounting with Quickbooks by Doug Sleeter ebook and could not access the Quickbooks files mentioned in the book. Is anyone having this problem?

    Thank you

  • Hi There –

    I purchased the kindle version of Restaurant Accounting with Quickbooks. However, I am using QB for Mac 2016 and I can’t import the sample file. This is ok, because I am a somewhat experienced user, but it would help if I could simply view the complete chart of accounts list and the items list, the book provides incomplete illustrations. Is it possible to find these elsewhere?

    Kevin

  • I totally agree with what you said. I think that when you separate the account receivable it will be easier to the accounting. I think that it will help too to determine if the business is gaining profit. Thanks for sharing this article.

  • Has anyone figure out a solution for QBO yet. This is what we are using and I am having a couple issues setting up items to work. I suppose i could just figure out a way to use the product types supported and map to the correct account. but i am not sure that will work and/or cause problems later down the road.

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  • I am having difficulties in my business accounting so I started to use quickbooks. This article is a big help for me to do accounting faster and easier. Thanks for sharing this article. This is a very helpful site for business owner like me.