How to Record Restaurant Sales in QuickBooks

Recording your daily restaurant revenue in QuickBooks correctly is the foundation of clean financial reporting and savvy business decisions. It can seem overwhelming to balance sales categories, various payment types, sales tax, and tips, but establishing a consistent daily process makes it manageable. This guide provides a detailed, step-by-step approach to accurately enter your restaurant’s daily sales summary into QuickBooks Online.

We’ll cover how to set up your accounts properly, explore two popular methods for recording sales, and—most importantly—explain how to reconcile everything to your bank statements. Let's get started.

First, Understand Your Daily Sales Summary

Before you touch QuickBooks, your starting point is the daily sales summary report from your Point of Sale (POS) system (like Toast, Square, or Aloha). This report consolidates an entire day's transactions into a single page of crucial numbers. You must become familiar with this report, as it provides all the data for your bookkeeping entry.

Pull this report every single day and make sure you can identify the following components:

• Gross Sales breakdown: You need this broken down into logical categories. For most restaurants, this means separate totals for Food Sales, Non-Alcoholic Beverage Sales, and Alcoholic Beverage Sales. This level of detail is a must for calculating your true Cost of Goods Sold (COGS) for each category.
• Discounts and Comps: Any discounts applied, whether from promotions, employee meals, or voided orders. This is usually recorded in a contra-income account to track its effect on your top-line revenue.
• Net Sales: This is your gross sales minus those discounts and comps. Sales tax is calculated on this number.
• Sales Tax Collected: The total amount of tax collected from customers on behalf of the government. This is not your income; it's a liability you owe to the state or local tax authority.
• Tips: You’ll need to distinguish between tips paid out in cash at the end of a shift (and therefore not your responsibility to pay later) and tips collected on credit cards. The credit card tips are a liability you owe to your employees, typically paid out through payroll.
• Payment Method Summary (Tenders): A breakdown of exactly how customers paid you. This includes Cash, Visa, Mastercard, American Express, Discover, gift cards redeemed, and payments from third-party delivery apps like DoorDash or Uber Eats.

Once you have this report in hand for the day you want to record, you're ready to head into QuickBooks.

Set Up Your Chart of Accounts for Success

A good entry is useless without the right accounts to post it to. Taking a few minutes to organize your Chart of Accounts will make your daily recordings and financial reports much more useful. In QuickBooks Online, go to Accounting > Chart of Accounts to set these up.

Here’s a basic structure that works for most restaurants:

Income Accounts:

• Food Sales (Income)
• Beverage Sales - Non-Alcoholic (Income)
• Beverage Sales - Alcoholic (Income)
• Sales Discounts and Comps (Contra-Income) - Creating this as a separate account, instead of just reducing sales, gives you visibility into how much you’re giving away.

Asset Accounts:

• Cash on Hand / Petty Cash (Current Asset) - For the cash in your drawers.
• Undeposited Funds (Current Asset) - This is a special QuickBooks account that acts as a temporary holding bucket for all the payments you’ve received but that haven’t yet been deposited in the bank.
• A/R - DoorDash (Accounts Receivable) - Use separate A/R accounts for each delivery app to track what they owe you.
• A/R - Uber Eats (Accounts Receivable)

Liability Accounts:

• Sales Tax Payable (Current Liability) - Tracks the sales tax you’ve collected and need to remit.
• Tips Payable (Current Liability) - Tracks credit card tips you owe your staff.
• Gift Cards Outstanding (Current Liability) - Tracks the value of gift cards you've sold but haven't been redeemed yet.

Method 1: The Daily Sales Journal Entry (Recommended)

Using a journal entry is the most robust and accurate method for recording restaurant sales. It allows you to enter all the moving parts of your POS summary in one organized transaction, cleanly handling multiple payment types and liabilities. While it might seem complex if you're not an accountant, it's a straightforward pattern once you learn it.

Let's use a sample daily sales summary:

• Food Sales: $3,000
• Beverage Sales: $1,000
• Discounts: -$150
• Net Sales: $3,850
• Sales Tax (9%): $346.50
• CC Tips: $450
• Total Due from Customers: $4,646.50
• Payments Received:
  • Cash: $1,200
  • Visa/MC: $2,500
  • Amex: $446.50
  • DoorDash: $500

Step 1: Create a New Journal Entry

In QuickBooks Online, click the + New button in the top left corner and select Journal Entry.

Step 2: Enter the Date and Details

Set the Journal date to the date of the sales summary. In the description box, put something clear and consistent, like "Daily Sales Summary - 11/15/2023."

Step 3: Record Your Sales, Tax, and Tips (These are your CREDITS)

In accounting, credits increase income and liability accounts. So, you will credit your sales accounts and the liabilities you collected for tax and tips.

• Line 1: Account = Food Sales | Credits = $3,000.00
• Line 2: Account = Beverage Sales | Credits = $1,000.00
• Line 3: Account = Sales Tax Payable | Credits = $346.50
• Line 4: Account = Tips Payable | Credits = $450.00

Step 4: Record Your Tenders and Discounts (These are your DEBITS)

Debits increase asset and expense accounts. In this case, you're recording the payments you received (assets) and the discounts you gave out.

• Line 5: Account = Undeposited Funds | Debits = $1,200.00 | Description = Cash Sales
• Line 6: Account = Undeposited Funds | Debits = $2,500.00 | Description = Visa/MC Sales
• Line 7: Account = Undeposited Funds | Debits = $446.50 | Description = Amex Sales
• Line 8: Account = A/R - DoorDash | Debits = $500.00 | Description = DoorDash Gross Sales
• Line 9: Account = Sales Discounts and Comps | Debits = $150.00

Pro Tip: By entering each tender type on a separate line but posting it to the same Undeposited Funds account, you will have an easier time matching deposits later.

Step 5: Verify Debits Equal Credits and Save

The cardinal rule of accounting is that debits must always equal credits. The journal entry screen in QuickBooks shows totals at the bottom. In our example:

Total Credits = $3000 + $1000 + $346.50 + $450 = $4,796.50

Total Debits = $1200 + $2500 + $446.50 + $500 + $150 = $4,796.50

They match. You can now save the entry. If your numbers don't balance, review your POS report and data entry carefully. If your cash drawer was over or short by a few dollars, create an expense account called "Cash Over/Short" and enter the difference as a debit (for a shortage) or credit (for an overage) to make the entry balance.

Method 2: Using a Daily Sales Receipt (Simpler but Less Flexible)

If journal entries are intimidating, you can use a Sales Receipt. This method is more visual, but it has limitations, especially when handling multiple payment methods. It requires setting up "Products and Services" that link to your Chart of Accounts.

Step 1: Set Up Your Products & Services Items

Go to Sales > Products and Services. You need to create a non-inventory "Service" item for each line of your journal entry.

• Name: Food Sales | Income Account: Food Sales
• Name: Beverage Sales | Income Account: Beverage Sales
• Name: Discounts | Income Account: Sales Discounts & Comps
• Name: CC Tips | Income Account: Tips Payable (Liability!)

Step 2: Create a Daily Sales Receipt

Click + New > Sales Receipt. Select a generic customer you've created called "Daily Sales" or "Z-Report Customer". Make sure the date matches your POS report.

Step 3: Fill out the Products/Services Lines

On the lines of the sales receipt, you'll enter the items you just created:

• Product/Service: Food Sales | Amount: $3,000
• Product/Service: Beverage Sales | Amount: $1,000
• Product/Service: Discounts | Amount: -$150 (enter as a negative number)
• Product/Service: CC Tips | Amount: $450

Below the item lines, find the Sales Tax box and manually select the tax rate or enter the total tax from your sheet ($346.50).

Step 4: Deposit to Undeposited Funds

The total of the Sales Receipt will be $4,646.50. You must select "Undeposited Funds" in the Deposit To field. This is the main weakness of this method. Sales receipts in QuickBooks Online are not designed for split payments. You can only deposit the full amount to one place. So, if you were to book a payment you need to pick one type such as credit cards. To get around this would require complicated workarounds and a loss of clarity, making the Journal Entry method superior for most restaurants with mixed tenders.

Closing the Loop: Reconciling Deposits and Fees

Recording the sale is only half the work. The next part is matching the money that actually hits your bank account to the entries you made. This happens in the bank feed (Bookkeeping > Transactions > Banking).

1. Making Bank Deposits

Your work with the "Undeposited Funds" account is not done until you group those payments into a bank deposit. Click + New > Bank Deposit. You will see a list of all the individual payments sitting in Undeposited Funds. From here, you can group them to match a real-world deposit. For example:

• Check the box for the $1,200 Cash payment.
• Check the boxes for the $2,500 Visa/MC and $446.50 Amex. If your processor batches them as one deposit, group them into one here.

When QuickBooks sees the actual deposit come through your bank feed, it will suggest a match to the deposit transaction you created.

2. Recording Merchant Processing Fees

The deposit from Visa/MC won't be for $2,500. It might come in as $2,425 after they take their fees. To record this in QuickBooks:

1. In the bank feed, find the transaction from your credit card processor and click on it.
2. Select "Find match" and use the pop-up to find the original customer payment you entered ($2,500).
3. Below that search result, select the option "Resolve Difference" or manually add a line to the deposit using the "Add Line" button to account for the fee.
4. Use the "Resolve difference" option to "add a transaction," and enter the details for the difference:
   • Category: Bank Fees or Merchant Processing Fees (Expense)
   • Amount: $75

This tells QuickBooks that $2,500 in sales was covered by a $2,425 deposit and a $75 expense.

3. Reconciling Third-Party Delivery Apps

This process is similar but involves the Accounts Receivable account you set up previously. The deposit you see in your bank feed from Uber Eats will be their payout after they take all their costs. You must still account for the initial, larger sum:

1. Record the original gross sale owed by Uber Eats of $500 as an accounts receivable entry as we did in the journal entry examples.
2. Assume Uber deposits $410 into your bank.
3. Click the deposit in your bank feed and select "Find Match".
4. Select the open invoice or A/R item due from DoorDash for $500 again.
5. Again, use the "Resolve Difference" or "add a line" option as needed, depending on your QuickBooks version. Post the difference as an expense:
   • Category: Delivery App Fee or Commissions
   • Amount: $90

Final Thoughts

Establishing a daily routine using the journal entry method will provide your restaurant with reliable and accurate books. Always be sure to use your POS summary to guide your entries and take the time necessary to reconcile your bank feeds daily or weekly at most, which keeps everything tidy and provides a clear financial picture.

Once you are consistent with your recording, more complex tax questions regarding asset depreciation, payroll, tip credits, and how to handle interstate purchases will arise. Researching specific questions like the 'FICA Tip Credit' can be time-consuming. We built Feather AI to provide professionals quick, citation-based answers from authoritative sources like the IRC and IRS publications, allowing you to focus on making strategic decisions rather than digging through dense law and regulations.