Should Your Restaurant Switch to QuickBooks?

Is QuickBooks Online a Good Accounting Solution for Restaurants and Food Service Businesses?

The short answer is yes. QuickBooks Online is a powerful and versatile accounting platform, and it has become the accounting software of choice for many restaurants. Here are a few of the reasons why.

Unmatched integration capabilities

QuickBooks Online is the industry standard in accounting software. Almost every point-of-sale system, inventory management platform, payroll solution, and restaurant management system can integrate with QuickBooks to exchange sales, inventory, payroll, and other financial data. This significantly streamlines information flow, eliminating hours of manual data entry and reducing the risk of human error. For a busy restaurant, these integrations alone can save many hours each month.

Powerful reporting capabilities

QuickBooks Online is a mature, feature-rich accounting platform with extensive reporting capabilities. It offers a wide range of financial reports that can be customized and filtered in different ways, making it easier to monitor your restaurant’s financial health and identify trends that deserve your attention.

Strong customer support

Unlike two of its main competitors, Wave and Xero, QuickBooks Online offers both phone and chat support. Its customer support system is extensive and can be a valuable resource for both new and experienced users. In addition, many accounting firms, including ProfitWise, provide QuickBooks Online setup, training, and ongoing support. Restaurants that use QuickBooks benefit from a large support network whenever questions or challenges arise.

Now that we’ve looked at how QuickBooks Online compares to some of its competitors, let’s examine where it performs well and where you’ll likely need additional restaurant-specific software.

Profitability tracking

QuickBooks does an excellent job of tracking the profitability of your restaurant as a whole. However, if you want to measure the profitability of individual menu items, you’ll need a point-of-sale system that supports menu-level reporting, such as Toast Point of Sale. Restaurant365 can also provide this capability when integrated with certain point-of-sale systems.

Accounting

Accounting is what QuickBooks Online was designed to do, and it does it exceptionally well. It offers a powerful, highly customizable chart of accounts with up to 5 levels of subaccounts, a level of flexibility not available in competing platforms such as Wave or Xero. Combined with its robust reporting tools, it gives restaurant owners a solid financial foundation for managing their business.

Workforce scheduling

For small and mid-sized restaurants with fewer than 150 employees, QuickBooks Online offers strong workforce management capabilities when paired with QuickBooks Payroll and QuickBooks Time.

QuickBooks Payroll processes payroll, handles direct deposit, tracks payroll tax liabilities, pays payroll taxes electronically, and files required federal and state payroll tax returns automatically.  The employee-facing Workforce app is also included with QuickBooks Payroll, and gives employees convenient access to pay stubs and annual Form W2s.

QuickBooks Time allows managers to build drag-and-drop employee schedules and notify employees of schedule changes through the employee-facing Workforce app.

For restaurant groups with more than 150 employees, QuickBooks Payroll is no longer an option because of its employee limit. In those cases, ADP Payroll is an excellent alternative. ADP includes robust scheduling tools and integrates seamlessly with QuickBooks Online, automatically transferring payroll data into your accounting system after every payroll cycle.

Inventory management

Although QuickBooks Online includes built-in inventory tracking, it is not designed to meet the inventory management needs of most restaurants. Restaurants typically require recipe costing, ingredient-level inventory tracking, and food cost management, all of which are better handled by restaurant-specific software.

Systems such as Toast Point of Sale include recipe costing and inventory management as part of their platform. Restaurant365 can also add these capabilities to many point-of-sale systems, giving restaurant owners much greater visibility into food costs and inventory usage.

Scalability for multi-location restaurants

QuickBooks Online can absolutely support growing restaurant operations. Its Locations feature, available in the Plus edition, enables owners to generate profit-and-loss reports for individual locations.

However, as restaurant groups grow, they often need more operational reporting than an accounting system alone can provide. Multi-location menu profitability, labor forecasting, peak-hour analysis, and operational forecasting are typically handled by restaurant-specific platforms such as Toast point-of-sale or Restaurant365. These systems are not replacements for QuickBooks Online. Instead, they complement QuickBooks by adding specialized restaurant management tools while QuickBooks continues to serve as the accounting backbone of the business.

The Bottom Line

For most restaurants, QuickBooks Online is an excellent accounting solution and should be part of the technology stack. At the same time, it’s important to understand that QuickBooks is not designed to do everything. Restaurants typically achieve the best results by combining QuickBooks with industry-specific software for point of sale, inventory management, recipe costing, scheduling, and operational reporting.

At ProfitWise, we help restaurant owners evaluate, select, implement, and integrate the software that best fits their operation. Just as importantly, we make sure those systems work together so you have accurate financial information and the insights you need to run a more profitable restaurant.

See How We Can Help