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How to do bookkeeping in Quickbooks? Tips based on my experience

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Tanu1234

Contributor
Aug 4, 2018
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Quickbooks is a popular choice for accounts management. Quickbooks is easy to use with awesome features. You can handle most of the accounting tasks such as invoicing, payroll, budgeting and reconciliation in QB.
It requires a little bit of time to learn the software functionality but it’s worth it. I have given few tips on restaurant accounting with QuickBooks. ( Most of the points are applicable to other businesses as well. So keep reading.) It is based on my 10 years of accounting experience. You will get an idea of most of the elements of Quickbooks.

QuickBooks setup:
Follow the below steps for accurate setup:
  1. Chart of accounts setup
  2. Setup of conversion balances
  3. Creation of products and services
  4. Setting up correct company information
  5. Setting up bank accounts for synchronisation
  6. Setting up tax rates
  7. Connect POS and Quickbooks
Please note that all steps are not required. You may skip the step if you are not using certain feature of QuickBooks. ( Ex. Inventory).

Sales entry :
There are two ways to enter restaurant sales in QuickBooks.
  1. Entering sales via manual entry as per POS
  2. Synchronisation of POS system automatically
The work is not done here. The restaurant bookkeeper should reconcile the sales amount with a bank deposit.
Moreover, cash sales should not be unrecorded. You should have a proper cash reconciliation system to enter and reconcile the cash sales.
Sales attract sales tax. Any mistake results in sales tax default. So periodical sales reconciliation is a must.
Account payable:
Accounts payable management includes the following functions:
  1. Entering purchase bills in the system
  2. Making payments against the bill
  3. Reconciliation of payables
Today, there are many accounts payable softwares available. This software automates the half the process of accounts payable. Bill.com or hubdoc is one of the popular account payable software.

Inventory: ( Skip this if it is not applicable to you**)**
Restaurant inventory can be managed with Quickbooks or with other software. We suggest using separate software for restaurant inventory management. However, the small restaurant can go with Quickbooks inventory.
There are two options for managing inventory in Quickbooks: Tracked and untracked. The untracked inventory option does not count inventory balances.
To set up the inventory, you need to list down inventory item one by one. Inventory count increases or decreases when you record purchase or sales.
Quickbooks generates inventory reports including
  1. Inventory valuation summary
  2. Inventory valuation details
  3. Physical inventory worksheet
It is cost-effective to use Quickbook inventory for few years of startups. Once the business grows, you can easily switch to separate inventory software.

Payroll :
Restaurant business used to have lots of casual and part-time employees. Keeping track of employee information and wages is necessary to follow payroll tax rules.
Quickbooks gives you a payroll feature. It has amazing features such as time-tracking, automatic tax calculation and same day direct deposit.
To get started with payroll, you need to set up the employee details such as basic info and pay rates. Quickbooks automatically calculate the tax and wages on due dates.
Payroll tax rules have frequent updates and busy restaurants tend to outsource payroll function altogether. It saves time and efforts to manage payroll. Payroll expert helps to comply all tax rules and saves from heavy penalty.

Chart of accounts :
Quickbooks provide a default chart of accounts. You can go with it, customize it or set up a unique restaurant chart of accounts.
There are several advantages of the unique restaurant chart of accounts:
  1. You can subdivide income and expense as per your need.
  2. You can keep an eye on specific revenue or expense.
  3. It helps you cut cost.
  4. It helps you in budgeting.
  5. You can stop revenue leakage.
  6. Payroll can be divided into hourly and fixed.
  7. It adds more values to financial statements.
There are several disadvantages:
  1. It makes bookkeeping more complicated and time-consuming.
  2. The effectiveness of reports is aligned with the effectiveness of data entered.

How to prepare a custom chart of accounts?
There are two ways to customize the chart of accounts. Starting from scratch or customize the default QuickBooks chart of accounts.
You can download the Quickbooks chart of accounts file. Add the necessary accounts and codes. Save and import it in Quickbooks.
You can create subaccounts if you don’t want to take the trouble of customizing accounts. Let’s understand the subaccounts concept for example.
Example :
Two sub-accounts can be created for inventory: Food inventory and Beverages inventory.
You can create sub-accounts for furniture: Office furniture and Cafe furniture.
I hope you get the point. Still not sure? Then ask your accountant to draw a chart of accounts for you. So you just plug it in Quickbooks and start working.

Tax compliance:
Restaurant business requires multiple tax compliance such as federal tax, sales tax, payroll tax, wine tax etc. Even tip involves taxes.
Quickbooks offers sales tax features in all plan. You get the benefit of automated tax calculation, tax reports and tax suggestions. However, you need to take care of few tasks such as
  1. The input of correct organization details such as the location of the business and business type.
  2. The input of correct customer info while creating sales invoice.
  3. Selection of correct tax code while doing expense categorization.
  4. Selection of correct sales tax code as per location of business.
  5. Review of tax reports
We recommend hiring a tax professional or CPA for tax compliance.

Bank Reconciliation :
Quickbooks give easy to use bank screen. Bank coding is easier compared to other apps. Quickbooks offer automated features. A little bit of care is required here. We suggest don’t use full automation. Partially automation along with human eye review is necessary to avoid mistakes.
At the end of the month, you should compare the month-end bank balance with the Quickbooks balance. This can be done with the bank reconciliation function. You need to compare actual bank entry with Quickbooks data. Sounds too much right? That’s all accounting.
Not doing bank reconciliation leads to inaccurate reporting. Reconciliation should be done and then tax should be filed.

Reporting :
Most restaurant owners consider accounts as a compliance task. Just get the books done and get reports for taxes.
Reports are not only for taxes. It gives you an overview of the profitability of the business. Have you tried to read the financial statements? Do you know the importance of stock reports?
Quickbooks has advanced reporting features. Get the following reports downloaded from Quickbooks and read them every month:
  1. Income statement
  2. Inventory overview
  3. Account receivable age summary
  4. Account payable age summary
  5. Sales by customer summary

Budgeting :
Restaurant business involves daily pretty expense. Managing cash flow is necessary to run the restaurant business smoothly.
But how can you manage the cash flow when you are already busy in growing the business? Budgeting is the answer.
You should get the restaurant budget on a weekly or monthly basis. This helps you to review the actual vs budget spent. You can keep track of the expense and cut down the unnecessary cost.
Quickbooks has inbuilt budgeting features. It can be accessed with the budgeting menu. It populates the automated budget. All you need to do is add numbers for upcoming new events.
Reviewing the budget periodically and taking necessary action can save you from a cash crisis.

Quickbooks Apps :
Quickbooks offer lots of features. Anything missing? You can visit the marketplace and choose the app for your restaurant.
It is totally up to your need and budget. The app can cost you few bucks per month. Most of the time, the money is worth spending.
You may want to choose an app for any of the following functions:
  1. Pos system
  2. Time tracking
  3. Expense management - Hubdoc
  4. Tax management
  5. Payroll - Gusto or other software
  6. Inventory
Wrap up:
I hope you get some benefits from this post. I am not a native writer but I try my best to explain everything. Let me know your thoughts or questions about the topic. If you want me to write on some other accounting topic, feel free to comment.:smile2:
 
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PaulFelder

New Contributor
Jan 23, 2021
9
1
11
Maybe it has 1/1/2017 locked, so you need to create an entirely new file. This is why every accountant should inform themselves about every aspect of the accounting software so that they won't create such a situation again. An accountant needs to choose the best bookkeeping software. For different types of accounting, there are specialized bookkeeping programs. You can find more about them on playlouder.com. You can see what bookkeeping software to use in different cases or companies and other helpful information for accountants.
 
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