[S6]

Ninjas!

I know this is a CPA forum but just wanted to see if there is anyone out there with any restaurant accounting experience that is willing to lend a helping hand to a fellow ninja?
More specifically, to understand the POS system reports, items to pick up/record, etc..

Also and again, mega shoutout to Jeff for this space! I passed all my exams primarily with all the ninja tools + this forum, a few years ago.
Now I am taking on new clients, in new spaces, so seeing if this forum can be more of a long-term help than just for the exams! (and if not, I am totally okay with that 😀 )

Thanks!!

Repetition is the father of learning...

AUD:  62, 72, 75

REG: 57, 71, 79

BEC: 63, 74, 65, 74, 86

FAR: 64, 67, 76

Ethics: 92

[jd]

I worked with restaurant franchises for a couple years before entering the public accounting world. For the most part, it’s fairly simple. Mostly everything is cash basis, so the returns don’t normally require adjustments. Most pos systems process batches on a daily basis. Unfortunately, the only thing I hate I couldn’t stand were pos systems. I felt like majority of them are not user friendly and can continue lingering errors with a low customer service response rate

AUD - 81
BEC - 83
FAR - 81
REG - 85

Compete

[S6]

Thanks for the response! I mean the reports seem pretty simple as far as the sales, discounts, and sales tax go but I guess I am not understanding how I should incorporate till changes, tips and cash over/short in the financial statements.

I think Im missing the entire process and just need to fully understand it to know how to account for these items. Also, I’m recording sales on a monthly basis but maybe I should change the frequency to weekly so it may be easier to reconcile? Still a work in process…

Repetition is the father of learning...

AUD:  62, 72, 75

REG: 57, 71, 79

BEC: 63, 74, 65, 74, 86

FAR: 64, 67, 76

Ethics: 92

[jd]

I would think you need to at least do it every week, but monthly may work well. A lot of this depends on the reports the pos system is capable of making. When I worked in the restaurant industry, there were multiple fast food franchises, all having different pos systems. Some were low budget and thrown together (weekly sales reports) and others were more robust (can select a custom date range). It’s a matter of finding a way to export those sales reports onto another cash over/short spreadsheet, having all deductions separately identified, then entering in the cash deposit to reconcile. Another place to look out for are third party delivery services (postulates, grub hub etc). These may be worse than pos systems, but it’s a matter of finding a way to have everything make sense at once. Third party delivery usually makes deposits one a week, and I would think cash deposits are done a few times a week. Sales tax can be reconciled fairly easily for the monthly estimate payments, as long as you keep up to date with rate changes

AUD - 81
BEC - 83
FAR - 81
REG - 85

Compete

[S6]

Yeah I here you..thanks for the input. You make a good point about third party deliveries I def need to lookout for that. Cash deposits are also being received every other few days from a third party processor so that throws another bone in the mix. Plenty of moving parts and I am trying to tick and tie everything and make sure balances make sense and all that good stuff. Also, I am just trying to understand the transactions that have occurred that tie into the pos reports (like I mentioned the till changes, cash over/short, etc) that need to be picked up in the financial statements. Any suggestion how to approach/view these items?

Repetition is the father of learning...

AUD:  62, 72, 75

REG: 57, 71, 79

BEC: 63, 74, 65, 74, 86

FAR: 64, 67, 76

Ethics: 92

[AGI]

I would recommend you interview the manager and the pervious accountant to get a good understand of how they run and record their business. There's usually a cheat sheet somewhere.

The math should be straight forward, I usually use an Excel spreadsheet to pre-record the sales and inventory (the ins and outs) and that a tally.

But if the math is not straight forward, it could means, maybe the ins and outs on the statement were before/after commission & tax. Sometimes manager will also use one credit card or simply cash to pay for everything (personal, shareholders, business, etc) and they might not keep track of the things. Rather than keep track of every items they might simple said take a quarterly end total and allocated it to N-expenses by %.

You should also watch out taxes and dues are often not pay on time (like 9-12 months later or eariler).

Also, the way how they count inventory could be different, like based on a daily value vs. Average vs. set priced vs. any other random method. (Depends on the type of restaurant and size…)

POS is usually accurate but can be overwrite. Commission and fees might vary depends on the net sales amount, contract, and even Amex, Visa vs. Master (pre or after fee).

Good luck.

NY - CPA

New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.

[AGI]

One of the good thing about POS is it's coding and report available. You should create a little excel table where you can easily convert the POS item codes into accounting and automatic calculation. You will need that when you report taxes!

NY - CPA

New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.

[S6]

Great! Thank you guys for the input it is super helpful!

Repetition is the father of learning...

AUD:  62, 72, 75

REG: 57, 71, 79

BEC: 63, 74, 65, 74, 86

FAR: 64, 67, 76

Ethics: 92

[AGI]

There should be a company policy on tips, rather if the tips belong to the restaurant (over the counter), the waiter/ waitress (which could then be payroll), or whatever the arrangement is. If it does belong to payroll, your company should then recognize it as income but then journal entry to pass onto the employee. There should be some sort of tracking report and be issued and sign off periodically (and for tax purposes).

Cash over /short should be minimum, assuming they count the cash before and after everyday. Obviously things and accident happens, like miscounted or wrong change. In this case check the restaurant policy, sometimes they just write it off as a loss, sometimes the policy was whoever was on duty that period need to make up that sum (if over certain amount).

There's nothing wrong with doing it monthly, depending how much sales you have and the amount. In small companies it's not unusually they do everything once a month and just one huge 50 line journal entry. This happens often if they have manual invoice or used a different system. However, you should be aware that X amount of sale tax applied after you exceed certain amount of sales, and other things start to kick in (and different state might have different policies), so you want to make sure you don't missed that deadline.

Financial statements should come automatically, to keep it simple you should have only several big income and expenses account, and then have sub-income and sub-expense account under those, and then maybe divided them by location or use the “name” function to sort. If you file everything correctly the statement will print out correctly without a pain.

NY - CPA

New York - NYC
Passed CPA Exam (11/2014)
In search for a position in NYC that will fulfills the license requirement.

[Author]

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