Bookkeeping is a vital part of any business. It keeps your numbers organized, makes tax time a more straightforward process, and gives you complete visibility of your company's financial health at all times.
Unfortunately, bookkeeping can be a tedious process, taking up a significant amount of your time and energy. Plus, as a coffee shop owner, your expertise should be focused more on selecting the right beans and finding the perfect brew, not on worrying about numbers and bookkeeping practices.
Fortunately, we have compiled a list of six of the most essential tips to follow to make your bookkeeping a more accurate and smoother process.
1. Leverage cloud-based accounting software
Choosing cloud-based accounting software for your coffee shop will help keep your bookkeeping more accurate. It will allow you access to all of your financial information at any time from any location.
A cloud-based program like QuickBooks Online can give you benefits such as:
- Data integration - Information from your POS system can easily be synced with your cloud-based accounting software, eliminating the need for manual data entry and ensuring a heightened level of accuracy.
- Daily backups - Cloud-based software will automatically backup all your daily transactions and financial data to ensure that everything is always saved safely in the cloud.
- Collaboration with other employees - Because anyone from anywhere can access cloud-based software, it makes it easy for other employees or your accountants to access critical financial data from the cloud.
2. Make sure your POS integrates with your accounting software
A POS system that can easily integrate with your accounting software will make all of your bookkeeping processes much more uncomplicated. You can ensure that your daily sales data flows into your accounting program at the end of each day. This minimizes the need for any manual data entry, saving you time and reducing data errors.
Square and TouchBistro are two popular POS software that we often recommend. These two programs have everything you need to help keep your bookkeeping in order and easily sync with your cloud-based accounting software.
3. Set up your chart of accounts properly
Many business owners start their business off by using a general chart of accounts. As a result, they are unable to track their finances in a meaningful way. Your chart of accounts should be organized in a way that allows you to gather useful insights into your operations.
As a coffee shop owner, tracking revenue as a whole is not as useful because you can’t identify the menu items that are performing best. Instead, you can track revenue in more granular detail by breaking down your revenue into food sales, drink sales, retail sales, and others to see which category is doing the most. Similarly, for your expenses, you can set up your accounts to track the cost of sales for food items, drink items, packaging, etc, to understand your gross margins for each category.
You can also create a specific account for sales tax, allowing you the opportunity to set aside funds throughout the year, so you have enough to pay taxes when the time comes. Learn more about key accounting considerations for coffee roasters.
4. Track your expenses closely
Many businesses make the mistake of not paying enough attention to their expenses. By keeping a close eye on the funds flowing out of your business, you can find different ways to minimize these expenses and even identify costs that can be written off as tax deductions.
5. Simplify your expense management process
These platforms allow you the ability to take photos of your receipts and invoice, after which they are stored in the cloud, eliminating the need for keeping the paper copies. Critical data can be automatically pulled from these images and exported to your accounting software. Plus, in the event of an audit, all of your documents are stored in a centralized location, meaning they are easily accessible and readily available for review.
6. Consider outsourcing
One of the best tips that we can offer for busy coffee shop owners is to consider outsourcing your bookkeeping. You didn't enter into the coffee shop business to spend your time crunching numbers and tracking accounts and expenses. The bookkeeping process can be an extremely time-consuming one, and it can take you away from more important aspects of your business. Outsourcing can solve this problem, leaving your finances in the hands of a trained expert.
A bookkeeping professional can keep all of your accounts in order, provide you access to the financial reports you need and ensure your books are ready when tax time rolls around. Some might also be able to help you handle your payables and payroll.
As a coffee roaster owner, bookkeeping is a task that you should not neglect because the financial well-being of your business depends on it. If you are considering outsourcing your bookkeeping process, Enkel is here to help.
The team of bookkeeping experts at Enkel has all of the information that you need to work smarter and stay organized when it comes to managing your bookkeeping. We are always standing by, ready to provide our assistance and answer your important questions. Contact us today.