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.

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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.


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About the author

Doug Sleeter

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.


  • 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?

  • 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.

  • 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.

  • 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,

    • 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?

    • 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 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

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