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QuickBooks for Restaurants

April 20, 2011 | By | 113 Replies More

Many restaurants can use QuickBooks very effectively for their back office work and for purchasing, bill paying, and payroll. Let’s take a look at how you might set up QuickBooks in a situation where the restaurant has cash registers or a Point of Sale system that ring up sales by each server. Summary information will be posted at the end of each day.

Restaurant_Cover_250x325Update 3/29/2013: The Sleeter Group has just released Restaurant Accounting with QuickBooks - an updated version of the information summarized here. This is an ebook by Doug Sleeter with a companion “toolkit” that provides you with a sample file with the templates, item lists, and reports that you need to use QuickBooks in a restaurant.

Restaurant Chart of Accounts

Here is a sample Chart of Accounts, showing a few accounts that will be critical in tracking and handling your restaurant setup.

QuickBooks Restaurant Chart of Accounts

The Tips Holding account will be used to hold cash paid out to servers each night after the end of their shift. It will not be a true bank account, but instead a drawer or safe on the premises with enough cash to pay out tips collected from customers that pay by credit card. Periodically, the manager of the restaurant should replenish the cash in this drawer so that is always enough cash on hand to pay tips to the servers.

The Gift Certificates account is used to track gift certificates sold and redeemed.

We recommend breaking down the income and Cost of Goods Sold accounts as shown above. You could add additional subaccounts if you want more detail, but this chart should be sufficient for most restaurants.

Items for Restaurants

Here is an item list for a typical restaurant.

QuickBooks Item List for Restaurants

  • Set up Discount items for each discount or complimentary service that you track.
  • You will want Service items for each different type of sale that is tracked on your cash register. If the register has more buttons to track more detail, you can add service items to track each of those items.
  • Create Other Charge items for Cash Over/Short and for tips paid out to servers each day. The Tips Paid Out item is used to track payments to servers from the Tips Holding account.
  • Payment items should be set up for each method of payment you accept. This includes credit cards and cash.
  • Include two Sales Tax items – one for your local sales tax and one that has a zero tax rate for non-taxable sales.
  • You should also include one Subtotal item.

In most cases, restaurants should not use QuickBooks to track inventory. We recommend taking periodic physical Inventory and using Journal Entries to manually adjust the value of Inventory, offsetting the appropriate COGS account.

Setting up the Sales Rep list for each Server

Create an entry in the Sales Rep list for each of your servers (or other tip-earning employee). They should be set up as Employees.

QuickBooks Sales Rep List for Restaurant

Setting up Customers and Custom Fields

For our recommended restaurant setup you’ll only need to add one customer, but you’ll add several custom fields to help you track more information about each day’s sales.

Add a customer named All Customers. Select N/A as the Tax Item.

QuickBooks Customer for Restaurant

Select the Additional Info tab and click on the Define Fields button to add three custom fields:

  • Count
  • ToGo
  • Avg

You will be adding these fields to the sales receipt form.

Restaurant Sales Receipt Form

You will enter your daily sales from the cash register or POS system each day using a sales receipt.

Create a new template for sales receipts and name it Restaurant Daily Sales, and include the fields as shown below.

QuickBooks Restaurant Sales Receipt Form

QuickBooks Restaurant Sales Receipt Columns

Payroll for Restaurants

QuickBooks is very well suited for most of the needs of small restaurants with fewer than 50 employees. We have some recommendations on how to set up some special payroll items needed in restaurants. In addition to these setup steps, you should go through the complete payroll setup as discussed in The Sleeter Group’s QuickBooks Consultant’s Reference Guide.

Payroll Items

Create the following Payroll Items:

  • Hourly Wage items forChef, Cook, Host, Manager, Serverand Prep/Dishwasher. You can add other wage types that fit your particular situation.
  • An Addition item called Tips Addition, with the account set to Gross Wages and a tax tracking type of Reported Tips.
  • A Deduction item called Tips Deduction, with the liability account set to Gross Wages, the tax tracking type to None, and Gross vs Net to Net Pay.

QuickBooks Restaurant Payroll Item List

Employees

Create a record in the Employee List for each employee. If you plan to track hours and pay employees based on hours worked, mark the Use time data to create paychecks field on each employee record.

QuickBooks Restaurant Employee List

Record Daily Sales

At the end of each business day, zero out the cash register, and record the z-totals on a QuickBooks sales receipt using the template you created earlier. In order to track sales and tips separately for each server, create a separate sales receipt for each server’s daily totals.

QuickBooks Restaurant Daily Sales

Note the following about the daily sales receipt:

  • Enter a different sales receipt for the total sales for each server, each day.
  • Enter the server name, the weekday, the total count (number of guests), the number of To Go orders, and the average ticket at the top of the column section.
  • Enter the total sales of each service item, followed by a subtotal, then the sales tax collected (per the cash register) and another subtotal.
  • Enter each of the payment types.
  • The sales receipt must always total to zero at the bottom. This provides a proof that total sales balances with the total collections. If there is a balance at the bottom, use the Over/Short item to force the transaction to zero out.
  • 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.

Bank Deposits

After recording the daily sales receipts for each server, the Undeposited Funds account will have a balance. The balance must be transferred into the bank account so that the bank reconciliation will match with each day’s transactions.

When you select the Record Deposits function, the deposits will show all of the payment details that you entered in the sales receipts.

QuickBooks Restaurant Deposit Payments

Use the View payment method type dropdown box to select just the Cash and Check payments.

Deposit the cash to your Checking account. If you hold cash out of the deposit, such as for the Tips Holding account, you can enter that account in the Cash back goes to field and enter the amount you held back.

Use a similar approach to make deposits to each of the credit card accounts. You can enter your merchant fee in the deposit window by selecting an expense account called Credit Card Discount Fees and entering the appropriate amount as a negative number.

Tracking and Reporting Tips Received by Credit Cards

When tips are received on credit cards, and paid out of cash on hand directly to the servers, you will record this on the daily sales receipt transaction. On pay day, add the tips information onto the employee’s paychecks.

Create a Sales by Rep report, and add an Item filter to select only the Tips Paid item.

QuickBooks Tips Paid Out Report

When you pay employees (through the Pay Employees option of the Employees menu) you will add the amount of tips paid onto each employee’s paycheck. Enter the same amount in two places on the paychecks:

  • In the addition item called Tips Addition.
  • On the deduction item called Tips Deduction.

This ensures that the tips paid to employees will be taxed, and that the tips will be reported on their W-2.

Reports for Restaurants

We recommend the following reports:

Sales by Item Report: This shows you the total sales for each item. Use the Sales by Item Summary report.

Sales Detail by Server Report: To see a report of all the sales details by server, create a Sales by Rep detail report, and add the custom field columns as shown below.

QuickBooks Sales by Server for Restaurant

Tips Paid Reports: To see how much was paid out for tips to each server by day, create a Sales by Rep Detail report, filtered for the Tips Paid Out item as shown earlier. To create the same report, but with totals only, create a Sales by Rep Summary report, filtered for the Tips Paid Out item.

Of course, there are many different ways to use QuickBooks, and every restaurant has it’s own “flavor”. We are providing you with an overview as a starting point. If you have any other tips that you have used for YOUR restaurant, let us know!

Did you find this helpful? A more comprehensive process for using QuickBooks in a restaurant is available in the Restaurant Accounting with QuickBooks ebook by Doug Sleeter. The ebook contains chapters on QuickBooks setups, payroll setup, bank deposits, reports for restaurants, and more.

 

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Category: Industry Solutions, QuickBooks Tips/Tricks, Restaurants, Working with QuickBooks

About the Author ()

Doug Sleeter 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, Doug has 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. Doug is best known for his expertise in QuickBooks as well as driving the adoption of online accounting and small business process solutions. 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. CPA Practice Advisor has recognized Doug as one of the "Top 25 Thought Leaders" in the accounting profession for the past several years and he has been named to Accounting Today's "Top 100 Most Influential People in Accounting" each year since 2008. Highly sought for his ability to engage and educate accounting professionals, Doug presents at various accounting events throughout the year, including those held by the AICPA and numerous state CPA societies. Doug also hosts the annual Accounting Solutions Conference, attended by hundreds of accounting professionals, industry leaders, and technology developers.

Comments (113)

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  1. Really enjoyed reading this article. I have had restaurant clients in the past but not with this type of setup. You have made this sound so simple and easy that I want to run out and get some restaurant clients.

  2. William "Bill" Murphy says:

    Hey Doug – I realize your article is on how to make QB work in a restaurant situation, but I was just wondering if you had any comment on Intuit’s new joint venture with Vivonet for Vivonet’s Halo product that Intuit is now promoting as “QuickBooks Point-of-Sale for Restaurants.” The product is being sold only by Vivonet (Intuit’s internal sales simply refer the call to Vivonet), and will be installed and supported by Vivonet (apparently Intuit Retail Solution Providers and QB-POS ProAdvisors are cut out of the loop), at least that’s the way it sounds.

    Since many of us who have been supporting QB-POS for years have been harping at Intuit on the need to improve the product to deal with restaurants and fast foods (and since a few features had been heading that way), it comes as a shock that Intuit has done “a 180″ to outsource their needy customers to an alternative vendor for what apparently will be royalties.

    I really don’t even know if Halo has it’s own GL package, or if it integrates (or will) with QuickBooks or restaurant bookkeepers will have to post raw-data or summary transactions according to your suggestions in today’s article.

    William “Bill” Murphy – Oklahoma City

  3. Mariann Goff says:

    Your sales receipt recommendation is exactly how I set up my restaurant clients–except–I have one client using QuickBooks Online. I can’t figure out how to breakdown the payments by cash, credit card, gift cert on the sales receipt. Perhaps I need to do more set up in preferences, but the receipt shows paid before I enter a payment.

    • Jeremy Allen says:

      Great Article – thanks for posting.

      Mariann, for our restaurant and other daily clients using QBOE, we had to set-up sales items for each type of payment to be received. Like the example above, create an item for cash received, AMEX, MC/VISA, Gift Certs, etc. Each payment type recevied for that days’ sales needs to be accounted for individually on the sales receipt, because when the payments are put into the bank, they are put into the bank differently. Checks and cash might be deposited together, MC/VISA might deposit together but AMEX might come in a day later, etc.

      Hope this helps.

      Jeremy

  4. Doug Sleeter says:

    @Jo Ellen, glad to hear you like the article. It’s something I wrote in 2004 or 2005 when I did several restaurant setups. It worked well for us, so I hope you like it.

    @Bill, I don’t know much about the Vivonet offering, so I can’t say much yet. If you know some, post it here.

    @Marion, I think Jeremy has the answer you’re looking for. Thanks Jeremy!

  5. J Ross Beasley says:

    How do you track tips per employee, if all sales are summarized on an end-of-day sales receipt??

  6. Doug Sleeter says:

    @ J Ross – Thanks for the question. If you look closely at the Daily Sales receipt above, notice that it’s the receipt for just one “server”. You would have several sales receipts each day for each server, and that is what allows you to get the reports on really anything “by server”. It somewhat complicates the daily deposits, and it requires that the POS can give you Z-totals by server, but if you can get those, this methodology will work quite nicely.
    Doug Sleeter

  7. Curtis Beebe says:

    Thanks for the great write-up, Doug. Am setting up QB for my restaurant now and really appreciate the guidance.

    One thing isn’t clear from your example, and that is how/where to record daily tips earned/paid to each server. How do you record that on the sales receipt?

    Thanks again,

    Curtis

  8. Doug Sleeter says:

    @Curtis,
    You have to modify your Sales Receipt template so that the Rep field is exposed on the form. See the “Sales Receipt Form” section above in the article. I suggest there that you rename the “Rep” field to “Server.”

  9. Brenda says:

    This is a great article and written clearly. Thanks!

  10. Ronda says:

    Thanks so much for this article, Doug. I just took over a coffee shop and was struggling with setting up my Chart of Accounts & Items. I do have a quick question though. I often receive products throughout the day and pay cash from the register for the invoice payment. How do I record that invoice payment so that my deposits to the bank will reflect less money than what my Z report indicates for total cash sales for the day?

    Thanks for your help,
    Ronda

    • Doug Sleeter says:

      Hi Ronda, When you pay for purchases with cash from the drawer, you should first set up a “cash expenditures” bank account. Then enter the vendor bill and pay that bill with the “cash expenditures” bank account. Then, at the end of the day, when you “make deposits” to the real bank account, add a line at the bottom of the deposit that debits cash expentitures for the total cash spent that day. This negative amount on your deposit zeros out cash expenditures, and the total deposited to the bank account.

  11. Jlynn says:

    How are you keeping track of your tax? Is the item taxed or just a journal entry to note the tax collected?

    My question regards bar sales where the tax is figured in the price of the drink already.

  12. Doug Sleeter says:

    Hi Jlynn, If you have Bar sales that include tax (i.e. the z-tape doesn’t separate out the tax for you), here is what I would do. I’ll assume an 8% sales tax rate, and that you want your sales tax reports to work in QuickBooks. Create a Bar Sales Item and make it Taxable. When you enter the bar sales on the sales receipt, take the total from the z-tape and then divide it by 1.08%. This gives you the sales before tax to be used with the Bar Sales Item. Then, subtract that amount from the total on the z-tape to get the sales tax amount. Add that sales tax amount into the Sales Tax line in the body of the sales receipt like you see in the screenshot above.

    • Jlynn says:

      Actually, the Z tape is set to give me the tax owed. The manual on the register refers this as a VAT. So my z- tape will look like this:

      Bucket 1 @ 10.00
      Bottles 2 @ 5.00
      Cans 1 @ 2.00
      Drafts 10 @ 20.00
      DEPTTL 37.00
      TAX 1 8.550%
      2.92

      NET 37.00
      GROSS

      CASH 7.00
      CHECK 10.00
      CHARGE 20.00

      So I set up a daily sales receipt just like the article states, however the tax is what I am over. Sooo, is there a way to balance this in the daily sales receipt?

      Thanks for your time. Your article has saved me hours of searching. The screen shots were a lifesaver.

      • JLynn, if you look at the screen shot of the Daily Sales Receipt, you will see that Doug has added a sales tax item. You can enter it as a percentage after a subtotal of the taxable items, or you can enter the tax amount directly.

        • Jlynn says:

          I did add it directly, but maybe I did not set it up right. Because it adds it like it was a sale. So I need to debt an account to get my receipt back to zero OR set it as a percentage after a subtotal. The later intrigues me. How do you set that up?

  13. Doug Sleeter says:

    @Jlynn, you can accomplish this by backing out the tax from each of the bar sales totals as shown on your z-tape.
    For example, divide the “Bucket 1″ sales by 1.0855 (10/1.0855=9.21), and then enter that amount on the Bucket 1 line.
    The way I have it set up with the subtotal line just before the tax line, it will automatically increase the sales tax item by 8.55% of 9.21 (9.21*.0855=.79).

    The one problem you’ll run into is roundoff from time to time, so use the over/short to force your sales receipt to zero out.

    • Jehad says:

      @Doug, is that the only way to deal with the round off issue? I tried to enter the sales tax amount manually so that it will match my register tape but I received an error message that said “Changing the amount of a tax line item may cause your sales tax reports to be incorrect.” I’m not worried about my sales tax report being incorrect. The issue is after I enter the sales tax manually and I enter the subtotal line under it. It only totals the sales tax and not the lines above it. I have to enter subtotal again for it to give me the total including the lines above. Is that OK? Will that create any problems?

      Your help is appreciated.

      • Doug Sleeter says:

        Jehad,

        You have it right. Just add another subtotal item to get the total of the subtotals above. Subtotal items are completely fine to add to sales forms and they do not affect the G/L at all. They just help you see subtotals on the face of the form and they help you total taxable items so the sales tax line just below that calculates tax on that subtotal.

  14. Doug Sleeter says:

    @Jlynn,
    However, another possibility comes to mind after thinking a bit. You said you have a VAT tax, so maybe you don’t actually collect sales tax from customers, but you have a tax on top of your gross sales (gross receipts tax).
    In that case, do NOT back out sales tax from each sales item, but instead add a final line item to the sales receipt with a new item called VAT Tax Expense that points to an expense account (VAT Tax Expense). Enter your total sales tax as a negative amount on that line to zero out your sales receipt.

    • Jlynn says:

      The sales tax IS included in the price of a drink. When the register is set to VAT, then my z tape correctly shows the amount of tax I owe for the evening.

      Im not to exited about backing out the tax as every time the sales tax changes, I will have to change all the items instead of one, being sales tax.

      I would like my sales receipt to mimic my z tape if it can be done.

      • Doug Sleeter says:

        @Jlynn,
        Since tax is included in each line item, the sales tax total is really just a “memo” that tells you how much tax should be accrued to your liability account.

        If there is a way for you to change the way the z-tape reads so that it backs out the tax from each sale item, that would be best. But assuming that’s impossible, you could just do what I said in my last post (i.e. add a line at the end that points to sales tax expense), but instead of sales tax expense you could point it to a sales account (the one that is pointed to by all the bar sales items), which would back out the sales tax from gross sales. That would avoid the need to back out sales tax from each line item.

        • Doug Sleeter says:

          However… if you do what I said above, you will have overstated taxable sales on the sales tax reports. That happens because each sales item will be recorded INCLUDING tax. But the sales tax report is designed to show sales without tax since the sales tax returns want that number. So it’s a tradeoff. You can back out the sales tax from the sales line items as I recommended above, or you can back out sales tax from the taxable sales on the sales tax reports.

          Nothing is ever as easy as we wish. The VERY best solution would be to somehow teach your POS system to give a z-tape that backs out sales tax from each line item… Good luck wiht it!

          • Jlynn says:

            Doug- Thanks so much for your counsel. I have decided to use my register as a glorified calculator. The items sold will be the price with tax. I have set the register to not figure tax at all.

            Once in Quickbooks I will enter the qty. sold and I have backed out the tax as you suggested. The tax reports looked so much better that way!!

            Now I am on to setting up employees. We will have contract labor for all bartenders and waitresses. How do I set up a 1099 employee??

            I imagine as a vendor and expense to contract labor?

            Thanks,

            Jennifer

      • ScottH says:

        For those POS systems I’ve worked with that won’t play nice and show net bar sales, I instead make a monthly/periodic journal entry to back the tax out of gross. Much less work on a daily basis but still provides accurate reporting.

  15. Stacey says:

    I’m not clear about how to handle gift certificates received as payment on the daily sales receipt you have outlined above.

    Thanks in advance for your help!

  16. ScottH says:

    Do you have any ideas for handling “batch” accounts receivable. I work with several restaurants that allow “house charges” – direct bill arrangements with local businesses or payroll deduction for their employees. I use a similar template to Doug’s, but am not able to post accounts receivable to more than one “customer” per screen. Currently I post the total daily house charges to a dummy A/R account and then enter individual customer charges, offsetting the dummy A/R account. I have a similar problem when I credit the employee’s payment via payroll deduction.

    • Scott, you are right, that is complicated, because QuickBooks only allows one A/R account per transaction. I’d have to see more details on what you are trying to do before I could comment, but off the top of my head I don’t see a better answer than what you are doing. But I haven’t played with that to see what the ramifications might be…

  17. Once in Quickbooks I will enter the qty. sold and I have backed out the tax as you suggested. The tax reports looked so much better that way, Im not to exited about backing out the tax as every time the sales tax changes, I will have to change all the items instead of one, being sales tax

  18. Earl C says:

    My wife and I are opening a restaurant this week and I got the Quick Books with Payroll 2012. Do I need to order something else for Restaurant Quick Books or is there any program to download?; all of this is new to me. Any suggestions would be greatly appreciated. Time is very important.
    Thanks for your help.

    • Earl, there isn’t a “restaurant” version of QuickBooks. This article does talk about how to use regular QuickBooks in a restaurant situation.

      For QuickBooks itself, there is a QuickBooks POS system that you can buy, but I don’t know if that is the best choice for a restaurant or not. There are lots of choices. QuickBooks doesn’t REQUIRE a POS system, you can just enter your summary transactions as this article talks about, however you gather the information.

      However, I would strongly suggest that you talk to someone who knows QuickBooks, who is familiar with restaurants and point of sale systems. There is a lot that goes into setting this kind of thing up and if it isn’t done right it could really hurt your business. Getting proper guidance at this stage of your business can really make life a lot easier for you. This isn’t the time to be trying to learn how to use QuickBooks on your own.

      Good luck! What kind of restaurant, and wereabouts are you located?

      • Earl C says:

        This is a 80 seat diner in Ocala, Fl. It was already established for two years but due to poor management they were forced to close. I did talk to a QuickBooks rep yesterday and they helped me set up the payroll and were very helpful with other questions I had.

  19. Earl C says:

    Sorry; to add on to the above we do not have the POS system, just the old cash handling registers. Is there any old program for that?

    • Doug Sleeter says:

      Hi Earl,

      I agree with Charlie that it will be well worth some consulting fees to get some help with your setup. Although QuickBooks is “easy”, you can really “easily screw it up” so that you don’t get the right reports, sales tax handling, etc.

      Re: “a program for your old cash register”, assuming it’s really just one of those old mechanical registers, you won’t find any software that directly connects to that. But you can use the Z-tape from that register to record the daily receipts just as discussed in this article. However, you should check into a more up to date cash register system. Check AccuPOS (www.accupos.com) for a good restaurant cash register system that also directly connects to QuickBooks. It might help you in MANY ways.

  20. Greg says:

    Hi, I have a question about credit card tips being paid out in the employee’s check. At this restaurant all tips are put in the employee’s check as wages. I have that pointed to payroll expenses. The tips come in on the daily sale and go out on the paychecks. Is this correct? Or is it a payroll liability. I want it to show correctly on the P&L. All tips do show as being backed out on the daily sale.

    • Doug Sleeter says:

      Hi Greg,

      If I understand you correctly, you collect tips from customer credit cards, and then pay those tips to employees on payday with their paychecks.

      My article assumed tips would be paid out to employees each day at the end of their shift and in my experience, most restaurants work that way.

      However, if you do hold tips until payday, then you would do most of the same setup above, EXCEPT these changes:
      – Create a Credit Card Tips Payable account (liability)
      – Create a service item “Credit Card Tips Received” and point that item to the Credit Card Tips Payable account.
      – On each daily sale, add the Credit Card Tips Received item (below the subtotal after Sales Tax)and enter a postive amount for the total tips received on credit cards. Make sure to record a separate sales receipt for each “rep” (employee), so that you can get the report for total tips received by employee.
      – Change the Tips Addition payroll item to point to the Credit Card Tips Payable account, but leave the other settings the same.
      – Do not use the Tips Deduction payroll item on employee paychecks. Each paycheck should include hourly wages and the Tips Addition, but you would not use the Tips Deduction to reduce their paychecks by the amount of the tips.

      As I looked closer at this, I realized that the sales receipt shown above should always have include a line for Credit Card Tips Received, so sorry if that confused you. I’ll try to update the screenshot and fix the wording.

      I hope this helps.

  21. Albert Feliciano says:

    help….., please!
    I record daily activity via journal entry and I’m having a heck of a time trying to record(assign to proper account), track(to employee receiving tips) and report(in payroll) Charged Tips paid daily out of cash register funds.

    Any assistance you could provide would be greatly appreciated.

    Albert F.

  22. SBassinger says:

    I, also, am not clear on how to handle gift cards purchased (which at the time they are purchased–is an outstanding liability) and then on how to handle once they are redeemed. I’m specifically referring to the set up and use of the sales receipt.

    Once they are redeemed, shouldn’t the outstanding liability account be reduced and the “sales” account be increased??
    HELP?????

    • Doug Sleeter says:

      For Gift Certificates:

      1) Set up two service items (Gift Certificate Sales, Gift Certificates Redeemed) pointing to the Gift Certificates Liability account (other current liability).

      2) On the POS system, make sure you ring up gift certificate sales separately from gift certificate redemptions.

      3) Using the data from the daily Z-Tape, record the total Gift Certificate Sales as a positive number on the Daily Sales Summary transaction and record the Gift Certificate redemption as a negative number. Enter them after the last subtotal so they don’t change the other subtotals.

      Notes:
      The actual REVENUE from the gift certificate will get recorded in the sales (food sales, bar sales, etc.) when the gift certificate is redeemed by the customer.

      The two Gift Certificate items will add to and subtract from the Gift Certificate Liability account, so it will always show the total outstanding gift certificates.

      It may be necessary to adjust out “expired” certificates using a journal entry at the end of the year, depending on how the business treats the gift certificate contract, and on whether the receipts need to be treated as income for tax purposes.

      • Fernando says:

        I am using US version and once the cmaopny was set up in only home currency, it doesn’t allow any change to multi currency as there are no choices in the drop down currency box.

  23. Dubsea Coffee says:

    This has been so helpful in revamping my books for my cafe.

    In regards to Discounts as mentioned in the Chart of Accounts screen shot, how is this account used?

    For example, we have stamp cards (buy 10 get your 11th drink free). When a customer redeems their stamp card, we punch it in the register and its discounted at 100%.

    On my daily sales receipt I’m given: total sales (this amount is less the total discount amount), cash payments, cc payments, gift cards redeemed, and discounts given.

    In QB when I enter daily sales: the total sales, cash payments, cc payments and gift cards items balance out to zero and reflect my z-report. But, it doesn’t allow me to accurately record the discounts that were given.

    How should I be recording these, and how does it affect the Chart of Accounts?

    • Doug Sleeter says:

      For the stamp cards issue:

      Since the discount key on the register reduces the total sales on the z-report, it makes sense that, as you say “… the total sales, cash payments, cc payments and gift cards items balance out to zero and reflect my z-report…”

      So although the z-report shows you the total discounts given that day, you could just ignore it in your QB entry because the total sales from the z-report represents the NET sales (sales less discounts). You could just delete the “discounts given” account and never use it.

      If on the other hand, you WANT to separately record the discounts on your financial reports, you could add two more lines to the QB entry, as follows:
      1) Set up two service items, StampCardRedemptions (pointed to sales), and StampCardDiscounts (pointed to discounts given). Make both items non-taxable.
      2) On the QB daily sales receipt, enter two lines below all the others. For both lines, use the amount of the “discounts” from the z-report. Enter a positive amount for the StampCardRedemptions, and a negative amount for the StampCardDiscounts.

      Make sense?

  24. Albert F says:

    any suggestions (book, web site, forum, etc…)as to where I may be able to get some help with recording charged tips paid out daily using journal entries?

    12/31/11 post:

    help….., please!
    I record daily activity via journal entry and I’m having a heck of a time trying to record(assign to proper account), track(to employee receiving tips) and report(in payroll) Charged Tips paid daily out of cash register funds.

    Any assistance you could provide would be greatly appreciated.

    Albert F.

    • Doug Sleeter says:

      Hi Albert,
      The article above shows how you can track all these things in QuickBooks, but we use items and sales receipts to get there. If you use Journal Entries, you will have a heck of a time getting there. I guess that’s what you’re experiencing.

      Rather than trying to make journal entries work, I recommend you set up the system like in the article and start recording everything that way as of a certain start date. Maybe you could re-enter everything since Jan 1 for example.

      As for what to do with the old data, that would be a pretty involved project and I’d recommend you contact one of our consultants using our search at http://www.sleeter.com/user/consultant/search

      I hope that helps.

  25. Noor says:

    Hello, is there a book that you have published regarding Quickbook for Restaurants. I would like to purchase the entire book that has all of the chapters. Thank you

  26. Ellen Jagneaux says:

    Oh how I wish I’d found this article about 6 weeks ago……..while I was setting up Quick Books for our new restaurant. Now the only problem is staying up all night to figure out how to go back and redo everything so that it’s all consistent. Having used QB’s for other businesses I felt fairly confident using it for my restaurant only to find out that it’s worlds apart in the accounting world, especially regarding payrolls and credit card tip disbursements and cash tips declared.

    Although I have a wonderful lady who is QB’s certified guiding me along it didn’t take long to realize that she is as lost as I am with utilizing quickbooks for a restaurant. I’m now seeking help through my state restaurant association. They have so many more resources which are available than would be just as an individual business owner.

    The part I do not understand is that my first pre-requisite for buying my POS was that it be Quickbooks compatible. It’s anything but. Now this P.O.S.(literally) sales rep is trying to tell me that I have to download stuff from the POS to a USB drive, create specific excel templetes to upload to and then transfer the information to QB’s. Has anyone else ever heard of this? Your long hand method above sounds less time consuming than what this sales rep is telling me.

  27. Doug Sleeter says:

    Ellen,
    Glad the article helped. I would not go with any POS system that involves “downloading to a USB drive.”

    A good restaurant POS that connects to QuickBooks is AccuPOS (www.accupos.com).

    • Daphne says:

      Just found your website. Good info. Have you given any thought to the service charge vs tips issue recently published in Rev Rule 2012-18 and the related IRS announcements? I’m trying to decide the best way to set this up.

  28. Lisa says:

    This is an excellent article. Thanks so much Sleeter Group. What I haven’t found the answer to yet is what type of Quickbooks would be best for a new restaurant client. Would Quickbooks Pro be sufficient? Or should we go with the Premier edition? Do either have a Chart of Accounts specifically for a restaurant.

    Thanks.

    • Doug Sleeter says:

      Hi Lisa, QuickBooks Pro is sufficient for Restaurants. Re: the Chart of Accounts, QB doesn’t have a specific COA for restaurants, but you can use the COA from my sample restaurant file in the “Restaurant for QuickBooks” toolkit (http://store.sleeter.com/restaurant-accounting-with-quickbooks-e-book-toolkit/?utm_source=Beyond&utm_medium=Post&utm_campaign=Restaurant).

      • Lisa Luzzi says:

        Thanks so much Doug. Your blog/website are extremely helpful. I am so happy to find this info before setting up my new client. Lisa

        • Lisa says:

          Doug – What do you mean by restore the file. Do I need to open the file into Quickbooks. My computer is not recognizing the file (I don’t have QB installed yet). Confused here.

          Lisa

          • Doug Sleeter says:

            Hi Lisa,
            Yes, you do need to have QB installed first because this file is our sample QB company file, used to create the screenshots above. After downloading, use the “Restore” function in QuickBooks to open it. If you’re completely new to QuickBooks, it’s probably best to get a consultant involved to help you get everything set up. Search our web site to find someone in your area. Many can also help you remotely if you don’t find someone close to you.
            http://www.sleeter.com/user/consultant/search

          • Lisa says:

            Doug – I’m up and running. I’m going through the set-up now as describe in your blog and when you changed the “Ship Via” field on the Sales Receipt to “Wkday” how do you delete the old values like “UPS”, etc?

            Thanks again,
            Lisa

          • Doug Sleeter says:

            Lisa,

            Since we use the “Ship Via” list to track the days of the week, you’ll need to edit the Ship Via list. It’s under the Lists menu, then Customer and Vendor Profile lists. You can just delete all the items in that list and enter new entries for each day of the week.

          • Note that if you have used any of the Ship Via entries in a transaction, you can’t delete them, but you can mark them as “inactive” to hide them.

  29. Debi says:

    I set up a restaurant as described in your article, but am having trouble with the Tips Holding Account. I’ve set the company up after many months of business, so records were not kept as I would have liked. The restaurant has an outside payroll provider. From the cash register Z report, I entered the Tips Paid Out into the Tips Holding Account as described. I now need to reflect those amounts in the Payroll Expense Account, but no matter how I look at it, I am unable to make the proper entries. Please help :-)

  30. Mary Lee says:

    FYI, In Texas you are instructed to not back the tax out of bar sales. The sales have to be reported entirely then the tax owed on bar is calculated added to that total, but not passed on to the customer. How would that be set up? Should the The mixed beverage tax be a company expense? The rate here is 14% if you have a full bar license.

  31. Great article. What are you thoughts on the fact I/we do not have a POS system. We are owners and we run the deli, with two part time people. We have knowledge on everything that goes in and out; but again will not having a POS matter? Thank you .

    • Doug Sleeter says:

      Hi Gina,
      These methods assume you have a POS and are using the daily totals (z-tape) as the source of the entries in QuickBooks. So, if you do NOT use a POS, you’ll either have to enter each sale directly into QB, or do some type of daily totaling of your sales so that you end up with the same information that would come from a POS z-tape.

      I hope that helps…

  32. Rondi Skraba says:

    This is a perfect article, as I am just about to start working on a QB file for a new restaurant. However, I do not see any mention of the product that the restaurant purchases for preparing the food & beverages served.
    What item type would you suggest that would point to the COGS accounts? Is it necessary to use Units of Measure or OK to keep it simple by doing a periodic JE to account for inventory-on-hand?
    Thanks, I appreciate you guys!

  33. Gina Palacio says:

    Beautiful breakdown – especially the tip reporting set-up and the customization of the the sales receipt form.

    Setting up a “bank account” for Cash in Register allows cash to be tracked if it’s not all going directly to the bank. Create a separate payment type for Checks and then the Cash payment type can be directly routed into the Cash in Register account instead of flowing through the undeposited funds. Whatever cash is deposited would then be added as a separate line on the deposit slip at the end.

    This makes it easy to verify and reconcile the balance in Cash in Register – including cash being paid to vendors (use the Write Check function to record expenses paid via cash).

  34. Holly says:

    Doug – Do you know if the Focus POS system can be integrated into Quickbooks for the purpose of inventory management?

  35. Barbara Coker says:

    Thanks for the great article. I am a bar owner who taught myself to use QB after realizing that my bookkeeper could not do the job. I wish this article had been available to me when I was first setting things up. I made soooo many mistakes and am still tweaking and reworking things.

    One thing that I did that has worked well was to set up SEVEN customers, one for each day of the week. As a result my favorite report is the Sales Summary by customer. I run it with columns by week. This allows me to compare business on particular days so I can tell if Karaoke on Wednesday is working, or how our Monday Night Football crowd is. I can easily see how business has trended up for that weekday.
    Week1 Week2 Week3 Week4 Total
    MONDAY $$$ $$$ $$$ $$$ $$$$
    TUESDAY $$$ $$$ $$$ $$$ $$$$
    WEDNESDAY $$$ $$$ $$$ $$$ $$$$
    THURSDAY $$$ $$$ $$$ $$$ $$$$
    FRIDAY $$$ $$$ $$$ $$$ $$$$
    SATURDAY $$$ $$$ $$$ $$$ $$$$
    SUNDAY $$$ $$$ $$$ $$$ $$$$

    I love this report! I would love to modify it to give me averages as well, but I haven’t yet figured out if that’s possible.

    Another issue that I have encountered is sales tax. Your guide didn’t go into that. In the bar all our sales include sales tax, but I need to back out the tax to get the gross sales for reporting to the tax authorities. I came up with a solution for now, but I am sure it could be improved. Thanks again!

    • Doug Sleeter says:

      Hi Barbara,

      I think the seven customers would work well, and as long as you don’t otherwise use the customer list, go for it. But if you ever have an AR customer, it would complicate things. We used the “Ship Via” field, and renamed it to WkDay, so we could record sales by day. Then do a report totaled by Ship Via, and you get pretty much the same thing that you get with your Sales Summary by Customer.

      For sales tax that gets included in the bar total, you can divide the z-tape total by 1+tax rate (e.g. if it’s 8%, then divide by 1.08) to arrive at the Net Sales (excluding the tax). Enter that amount on the Bar Sales line of the sales receipt. Then subtract that amount from the total to calculate the tax. Then enter the tax as shown in the screenshot above.

    • Curtis Brown says:

      Hi Barbara,
      I was reading your post and Im’ just wondering how you set your report to do week 1, week 2, etc…? Will it give you a grand total at the end? will you P&L be correct? If it does, you have created a great idea & process for us.

      • Curtis, The P&L would work fine if you use Barbara’s method of using customers for each day of the week.

        Her sales by customer summary report needs to be customized to show columns for each week. So you would set the report date range whatever period you want, and then set the columns on the report to “week”

        But remember, as I said above, this works fine unless you also have AR customers. If you do have AR, then you would have to filter the report to eliminate those. And that may leave out important data.

  36. Pete C. says:

    Doug

    I am glad someone is out there helping the little guy. Is there a step by step out there for handling charged tips being paid nightly? This has become a headache for me from both my accountant and employees. I seem to lose either way. I want to continue to pay nightly, but apparently the way I am tracking it in QB is not right according to my accountant, but she is clear as mud when it comes to providing a step by step. I hate asking for free advice, but I am doing it for the sake of my employees. Thanks.

    • Hi Pete,

      If you’re having trouble with your current system, it could be that you’ll need to clean up past data as well as set up new procedures. For that, I recommend engaging a consultant who can come in and directly consult with you to assess the current situation, make recommendations, and either teach you, or do the work for you. We have consultants throughout the US and Canada, so look for someone here http://www.sleeter.com/user/consultant/search

  37. Hassan al khatab says:

    Hello Doug

    Thanks fr ths article, I am in Canada.

    My question is that. the clients paid the tips ( included with the his bil) via credit card. Then the tips credited to the checking account by the credit card company. In your article you did not mentioned how to record this part.

    I beleive the missing journal is…”….Dr bank checking…Cr tips liability?!

    Would you please explain hw ths got handled in quickbooks?

  38. Doug Sleeter says:

    Hassan,
    Thanks for your note. You should set up a Tips Collected item and point it to the Tips Holding liability. I should have shown that item in the item list above.

    Then, assuming the Z-tape can separately show tips collected, the sales receipt would have the tips collected amount on line 3 in the screenshot above. You would also have a line for Tips Paid Out towards the bottom of the sales receipt, and that should be a negative number equal the the amount of Tips Collected.

    You should do this for tips received by Cash or Credit Card

  39. mike says:

    hi, i’m new to qb and have a question about the tip holding account. we use aloha pos and the credit card tips are accounted for and subtracted by aloha from the server’s check-out “cash owed” at the end of each shift. if their cc tips are more than the cash that they owe, then the “cash owed” is a negative, but this $ is taken from the total of server’s “cash owed”, and the total of all the “cash owed” from the servers is our cash deposit from the night. it has happened a couple of times over the last two years that the total “cash owed” of all servers was negative, is this what the tip holding account is for? trying to wrap my brain around this one.

  40. mike says:

    hi again…after thinking some more about it, i’m wondering if i can just make one “server sales rep” and use the totals from the night. sales-cash&credit (divided into food and bev), sales tax, cc tips, comps, etc.

    • Mike,

      We’re just about to post an update to this post that goes deeper into the handling tips. Should be live next week. Also, we will be releasing a “toolkit” that comes with an eBook and sample QB file with all of the setup and reports. So if you are interested and still need help getting it all set up, check back next week (week of 2/18/13) for an update to the post and a link to purchase the system.

      • Frank Hagan says:

        Hi Doug, love your articles! I have a new restaurant client, and noticed you said an update to this post was in the works for 2/18/13. Has it been published yet?

        • Frank, the update isn’t quite ready for publication yet (as editor, I always have to go over these things). It will be available in the near future. When it does, we’ll post a notice at the top of this article either to say that THIS copy is updated, or possibly to point to the location of the new article if that is the route we take. Sorry for the delay!

  41. mike says:

    I have another question as well. our beverage distributors charge a $30 deposit on kegs. when they drop one off i get charged for the product and that deposit, but the total for the check is this total, minus any kegs they pick up. so i want to track these deposits and know i can make “keg deposits” a current asset, and each vendor’s keg dep a sub under it. my question how is this linked to the vendor in order to make everything balance, and thus the check amount correct? and is this even the best way to do this? thanks so much for your time…mike

  42. DoubleBasterd says:

    This article was immensely helpful. However, I did need to clarify one thing: In setting up the items you mention creating a Cash Over/Short item, which in your screenshot is linked to Cash Over/Short Account. Can you clarify as to whether this is an expense or other type of account? Additionally, how should this account function (e.g. be balanced in ledger entries, etc.)?
    Thanks again!

  43. Cindy L says:

    Hi Doug, I’m trying to understand how to handle credit card tips in QB. My business is a restaurant.

    Is it an expense or part of COGS in QB? What about merchant cc fees, is it an expense or part of COGS?

    Thank you,
    Cindy

    • Doug Sleeter says:

      Hi Cindy,

      Tracking Tips in restaurants is indeed a challenging part of managing, tracking, and complying with laws. This article covers some of the details you want to use, but there are more steps that you’ll also want to take to ensure full accounting for credit card tips, accruing a liability for tips received, recording reported tips on paychecks, and handling negative paychecks.

      All of this and more is covered in my new book “Restaurant Accounting with QuickBooks.” Since it’s not quite released, it’s not available on our store yet, but if you call our office, you can order an advance copy. The book is in PDF format, and includes a “toolkit” with sample files that you can use to get set up right away. Call our office at 888-484-5484.

      Thanks for your question!

  44. Nick says:

    Hi Doug,

    Just purchased your e-book, and very much enjoying it. One thing that I don’t see, though, is how to accommodate for a beginning bank in the till.

    For example, we have one primary till (our servers bank their own cash). At the beginning of every day, this till is filled with $X to use for change. Most of the time, cash is added to this from sales, and the tips are cashed out from a combination of cash received via sales and what was in the till for change.

    Occasionally, cash may also be “removed” from the till to purchase miscellaneous emergency items.

    All of this is tracked through our POS, but I’m not sure how to track it in QB.

    Any thoughts?

  45. Interesting blog post on another web site about tips and taxes: http://www.thecfo2go.com/blog.php?id=1

  46. Teresa says:

    Hi Doug,

    I see your note that you don’t typically recommend using QB to track inventory. Do you use it to any extent? For example, I’m debating setting up the different inventory purchases as “inventory parts” so that when we do a periodic physical count to adjust inventory against COGS we adjust on an inventory part basis. Do you do this or do you just put all purchases into either Food or Bar inventory account and do all calculations for inventory in another system? I’m using Premier 2013. Also – would you use the Retail version of Premier or just the General Business version?

    Thanks!

    • Teresa, a side note (I’ll let Doug answer your main question). Personally, I don’t like recommending the “Retail” or “General Business” editions, because they tend to be the most limited in options. In a general sense I prefer either the wholesale/manufacturing edition, or perhaps QuickBooks Accountant, as they have more features. You may not want these features in a particular business, but it is nice to have the option. Thinks like multiple units of measure, for example.

    • Doug Sleeter says:

      Hi Teresa,

      Yes, I recommend AGAINST inventory parts for your situation, and instead, just directly code your purchases to the Cost of Sales Accounts. Because as soon as you use Inventory Parts, you start dealing with the average cost of each “unit” you purchase. But in restaurants, there is so much waste, and unit-of-measure inaccuracies, that you’re really fighting a losing battle when trying to keep your inventory counts accurate.

      I also agree with Charlie’s comment about NOT using the retail edition. The QB Accountant Edition is what I prefer because it has all the features of the others, plus some cool features like Client Data Review feature. Thanks for your post!

      • Teresa says:

        Charlie – thanks for your note.

        Doug – Thanks you as well. Do you have any comment on using the Wholesale/Manufacturing edition? I’ve already purchased Premier for my client and am debating whether I should eat that cost and grab the accountant version. My client will be hands off with all of the QB stuff and I’m wondering how much I will really gain by switching to the Accountant version since I won’t be using features like client data review.

        • Doug Sleeter says:

          Teresa, No problem with staying with Premier. I think Charlie’s recommendation was assuming you had to choose for a new purchase.

          You’ll be completely fine with Premier.

  47. Hollis says:

    Hello Doug,

    I followed your how to on using Sales receipts to record daily sales. However when I go to complete the sales receipt I get the following message: “You cannot use a payment item on a cash sale. If you are not receiving full payment for the sale, use the Create Invoices window instead of the Enter Cash Sales window.” Did I set something wrong? Any assistance you can offer would be greatly appreciated.

    Thank you

    • Doug Sleeter says:

      Hi Hollis,

      I suspect you’re using QuickBooks Online or QuickBooks for the Mac? If so, neither of those allow you to create the self-zeroing sales receipt.

      So in those situations, you have a bit more work to do.

      1) Don’t create the payment items
      2) Set the “deposit-to” account on the sales receipt to go to a clearing account (e.g. cash receipts)
      3) Enter a separate deposit into checking for each payment type, and have those deposits hit the cash receipts account.

      Much less elegant, but it works.

  48. ron says:

    Tips collected and paid out to wait staff are accounted for on the financial statements (i.e. the GL) in a balance sheet account (maybe a Credit Card Tips Payable account). These tips would be reflected on an employee’s W-2 as part of Box 1 compensation. That means that Wages/Compensation (including tips) reported on the W-2 for tax purposes would not equal Salaries & Wages reported on the restaurant’s P&L. The restaurant’s P&L would only reflect expense for salaries and wages paid (and not include any tips that were reported on the servers’ W-2’s). Is that a correct understanding?

    • Hi Ron,

      Re: Gross Wage Expense: Gross wages expense should only reflect the company expense for wages. So the tips are not an expense to the company. Because we are treating tips received by credit cards as a liability to the employee, they do not come into income. So credit card tips just wash in and out of the balance sheet accounts without affecting income OR expenses.

      Re: the W-2: Because the tips are accounted for as shown here, you’ll run a report on tips paid to servers, and then use that report to add “reported tips” to the paychecks for employees on payday. That will make them increase box 1 and increase reported tips.

      Re: Line 1 of W-2 reconciling to Gross Wages: These two numbers will not match, so you’ll have to do a reconciliation of Box 1 – Reported Tips = Gross Wages (plus/minus other benefits that his box 1).

      In the full book and toolkit, I have a section on how to take the tips and add them to paychecks in such a way as to add them to the W-2 without double-paying the employee for the tips. I also discuss what to do if the paycheck goes negative. This may happen when taxes due on the tips are more than the net pay they receive from their normal wages.

      You can get the book at http://store.sleeter.com/restaurant-accounting-with-quickbooks-e-book-toolkit/

      I hope this helps.

      • Ron says:

        Thank you Doug. Your reply was very helpful. I had another question and am not sure if it is covered in your ebook. Regarding credit card sales and 1099-K reporting, has it been your experience to see that restaurants “gross up” their sales from credit card transaction so that amounts match what is reported by merchant services companies on Form 1099-K (with appropriate offsets, maybe on the sales returns and allowances line, to show the proper “net sale” amount on the P&L/tax return)? For example, let’s say a credit card charge is $100 comprising $75 sales, $5 sales tax and $20 tip. As discussed above, the sales tax and tip would flow through balance sheet liability accounts. But if sales of $75 are reported on the tax return and the merchant services company reports $100 on the 1099-K, would that automatically generate an IRS inquiry? Would it be appropriate for these credit card transactions to record “gross” sale of $100, then debit sales return and allowance for $25 (with offsetting credit to the sales tax and tip liability accounts), resulting in net sales reported on the return of $75? Not a preferred solution, but just wondering how to avoid automatic inquiries if business reports net sales and merchant services company reports gross charge (sale plus tax plus tip). Any thoughts?

  49. Ron says:

    Thanks Doug. Just curious as to how you saw your restaurant clients have been reporting these cred card type sales given that the gross charge reported by the merchant services company will exceed the actual sale amount as it will include sales tax and tip which aren’t revenue items. That’s why I was asking if you had seen restaurants record the credit card transaction as a sale for the full amount of the charge and then “back out” the sales tax and tip by debiting a sales returns/allowances account and crediting liability accounts. Not really the “proper” way to record the transaction, but it gets you to the same net result and the gross amount reported on the tax return would equal the gross amount reported on the 1099=K by the merchant processor. Any thoughts/experiences? Thanks in advance.

  50. Sheila says:

    Michelle any suggestion on procedure for daily sales with sales receipts in QuickBooks Online for a restaurant? Seems different than desktop and I am new at QBO.

  51. Nadene says:

    Hello Doug,

    Thank you for your article, I really think this is going to be perfect for the bookstore/coffeehouse I am now doing the books for.

    I’ve set up the items as you suggested, but I have run into one small problem…

    I entered my sales item and then entered the sales tax item on the next line. It is giving me a number that is slightly different that the amount that shows on my Z-tape.
    If I change the Amount on that sales tax line, I get the following message:
    “Changing the amount of a tax line item may cause your sales tax reports to be incorrect. Please refer to the sales tax chapter of the user’s guide.”

    How do I make QB match my Z-tapes?
    Should I make QB match the Z-tapes?
    Am I messing up my sales tax liability account/reports?

    Thanks again for your help

    • Doug Sleeter says:

      Hi Nadene,

      You are “correcting it” when you override the amount in QB to match your Z-Tape. But if you need to, you should check the sales tax rates to make sure they are correct on the POS and in the Sale Tax item setup in QB. Theoretically, if they’re the same, you should not have to override the sales tax amount.

      But for sure, you need to make sure the QB amount is exactly what your X-Tape says, because that’s what you REALLY charged customers.

      • Nadene says:

        Thank you, Doug.

        One more question (well, kinda two)

        If we are entering the sales tax as a line item in the body of the sales receipt and using the 0% sales tax item at the bottom of the sales receipt, is there any reason for any of the items to be taxable? Will they still show up as “Taxable Sales” in my Sales Tax Liability report, etc?

        Should I just turn the tax preference off?

  52. Richelle Torres says:

    Hi Doug! I just wanted to thank you for the above general info. I’ve been in the restauarant managment business for 20 years but have dabbled with the bookkeeping side for about one year. I’ve recently started with a very successful restaurant in San Diego but their books were not situated for a restaurant. With your help, I’m in the process of working out the kinks (mainly payroll and tips).

    Thanks again!!
    Richelle

  53. xtian says:

    The format of your post with screen grabs and descriptions is great, so I’ll use it to ask my question.

    I’m part way through testing your setup and I’m stuck on Bank Deposits. I’ve taken a screen shot showing my test Daily Sales receipt and an attempt at depositing the funds [1].

    Unless I have a non-zero positive balance, as I have forced here by crediting 20$ not collected to the prepaid balance (liability account), I don’t see any Undeposited Funds.

    Did I not enter the Cash & Check payment Item correctly [3]?

    [1]: https://drive.google.com/file/d/0B7q1i4T96t6eT3AwYzM1NUhVWlk/edit?usp=sharing

    [2]: https://drive.google.com/file/d/0B7q1i4T96t6ed2N3SXBOVms4UTQ/edit?usp=sharing

    [3]: https://drive.google.com/file/d/0B7q1i4T96t6eZjFjUFcyZWdnR1U/edit?usp=sharing

  54. Doug Sleeter says:

    Xtian,

    I see your screenshots and I am perplexed. It appears you have it set up correctly, but we both must be missing something.

    At first I thought:
    Perhaps your “payment” items do not point to the Undeposited Funds account? Check this by going to your item list and editing the item named “Cash & Checks” – If it hits the bank account, you won’t see any undeposited funds. … but your screenshot shows that it does hit the undeposited funds account.

    So now, I’m wondering about the chart of accounts. Check to see that you have only ONE undeposited funds account, and that it is the default one, not one you manually created.

    Forget going down the path of “non-zero positive balance” on the sales receipt. That’s the wrong path.

    Try going to edit>preferences and select payments>company preferences and uncheck “Use Undeposited funds as the default deposit to account” – Not sure, but maybe that will change something here. Need to test it.

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