How it runs for restaurants and hospitality businesses
Tender clearing accounts are created for each processor, marketplace and gift-card program, the Toast or Square end-of-day report is mapped to the journal, liability accounts are set up for tips, sales tax and gift cards, and payroll departments are mapped. Migrations include a parallel period.
What is accounting software setup and migration?
Accounting software setup is the configuration of a new ledger: chart of accounts, tax codes, bank feeds, items, users and apps. Migration is moving existing books from another platform or spreadsheet into that ledger so history, open items and balances carry across. Both end with a file that agrees to the old records and is ready for live posting.
What we handle for restaurants and hospitality businesses
- Design a chart with sales by category and channel, cost of goods and labor by department
- Set up location classes and revenue centers for daypart and channel reporting
- Create tender clearing accounts for each processor, marketplace and gift-card program
- Map the POS end-of-day report to a daily sales journal and configure bank-feed rules
- Migrate opening balances and liabilities with one parallel period before cut-over
The KPI that matters here
Cut-over completed with opening balances and liabilities tied to the prior system and the first close delivered on schedule.
Restaurants compliance notes
Tip reporting and tip credits
Employees must report cash and card tips to the employer, the employer withholds payroll taxes on reported tips, and large food and beverage establishments file Form 8027 annually. Where the restaurant takes a tip credit against minimum wage under the FLSA, the wage records must show that tips brought each employee to the full minimum. We reconcile POS tips to payroll and keep the workpapers; your payroll provider and CPA handle filings.
Sales tax and local meal taxes
Restaurant sales are taxable in most US states, many cities and counties add a meal or hospitality tax, and rules differ for catering, delivery, alcohol and service charges. We reconcile tax collected in the POS to the ledger by jurisdiction each month, prepare the workings for your filing, and flag rate changes or new locations so nothing is missed.
Daily cash and deposit controls
Cash-heavy service creates the need for a daily cash count, a deposit log and a documented over-and-short account. We reconcile the counted cash per shift to the POS cash tender, match deposits to the log, and report over-and-short by location and manager so problems surface within days rather than at year-end.
Alcohol, franchise and lease reporting
Liquor license reporting, franchisor royalty and marketing-fund reports based on gross sales, and percentage-rent clauses in leases all depend on POS sales figures that tie to the ledger. We prepare the sales schedules these reports need from reconciled numbers and keep the supporting Z-reports on file.
Restaurants software we work in
- Square
- QuickBooks Online
- Xero
- Gusto
- Bill.com
- Toast
- Restaurant365
- MarginEdge
- 7shifts
- All 50 platforms
More for restaurants and hospitality businesses
Other services for restaurants
Software setup and migration in other industries
Frequently asked questions
How should a restaurant's chart of accounts be organized?
Sales by category such as food, beverage, alcohol and merchandise, with comps and discounts shown against gross; cost of goods by matching category; labor split by front of house, back of house and management with payroll taxes and benefits; occupancy including base and percentage rent; and operating expense groups for supplies, repairs, marketing and technology. Tender clearing and liability accounts complete it.
Should Toast or Square post directly into QuickBooks?
Integrations can post a daily sales journal automatically, and where the mapping is set up carefully they save time. The risk is a mapping that sends tips or sales tax to revenue or nets fees against sales. We configure the integration or the import template, test it against a week of Z-reports, and keep the tender clearing accounts so every automated entry is still reconciled.
What is the parallel period for?
It is one period where the old file and the new file are both maintained, so opening balances, liabilities for tips and sales tax, tender clearing accounts and payroll mapping can be checked against a real close before the old system is retired. Differences are resolved during that period rather than discovered at year-end, and the first close in the new file arrives on schedule.
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