Sales can be entered into the business accounting system in several different ways. The need for reports, and the capabilities of the cash register or point of sale system will determine how much detail will be entered into the accounting system.
If the POS system provides reports to analyze sales, then only a minimum of information needs to be recorded for accounting purposes. On the other hand, if the restaurant uses one or two simple cash registers, it may be beneficial to enter more details to allow for better reporting.
Most restaurants will want to enter one transaction per day in to the accounting system for their sales. This single transaction would include all of the sales data for all of the registers summed together. Those with sophisticated POS reporting systems might be fine with only a single transaction per month in the accounting system.
If you don’t collect tax and only accept cash, the simplest daily transaction might look like this:
All sales transactions have two parts, representing the things to be paid for on one half, and the means of payment on the other half.
A single transaction can still contain separate accounts for things like “food sales” and “beverage sales”, but will have a single total for the day. Sales tax collected would also be listed as a separate line.
One other possible separation of accounts could be for “take-out” and “dine-in”. This may be easier if the physical layout of the restaurant includes one cash register used for take out, and a different register used for dine in sales.
Regardless of whether the total food and beverage amount is listed in a single account or multiple accounts, it still only represents a portion of the sales information for the day. The other half of the information is the payment amounts, both cash and cards.
All sales have both components, consisting of the items sold on one side, and the amounts paid on the other side. If you sell one drink for $1 cash, that is $1 in beverage sales, and $1 in cash paid.
Internally in the accounting system, the $1 in sales will be recorded as a credit, or negative number, since the beverage represents outgoing value. The cash paid is the incoming value, which is how the double entry system stays in balance.
Since most restaurants accept both cash and card payments, the daily transaction will also include multiple accounts on the payment side. So a typical daily transaction might look like this:
Notice that the cash amount does not match up exactly to either of the food or beverage amounts, since it may represent part of both. It is only the total sales and total payments that must match for the day.
If you are using a simple cash register that does not separate “items sold” from “payment amounts”, you will just use the total it gives you on both sides of the equation. For example, if your cash register receipt for the day’s totals only shows Sales, Tax, and Total, then you would need to assume the amount of payment matches the total. If you only accept cash, enter the Total as Cash Payment.
If you also accept cards, and only have a single total, you would need to subtract your card total from the cash amount. For example, if you have $100 in sales, and your card processing machine totals $30, then you would have $70 in Cash Payments and $30 in Card Payments.
You may also want or need to track discounts off of the original prices. If you ring up a $5 burger with a $1 discount, your POS system might show the transaction like this:
|Food Sales $5|
You would have the option of recording both the $5 and the $-1, or only recording the $4. Your choice may be dictated by the reports that your cash register or POS system provides.
One more factor that can complicate daily sales is gift cards, or any type of advance sale. These items must have a separate line in the accounting system when sold, and will use the same account when they are finally redeemed. When sold, they are added to the items that need to be to accounted for, and when redeemed, they are added to the payment types.
So a transaction with multiple sales categories, tax, gift cards, discounts, and multiple payment types might look like this:
|Gift Card Sales||$40|
|Gift Cards Redeemed||$52|
Discounts could also be listed with the payment types with reverse polarity. This might make more sense if you think of them as coupons. The above transaction would be reported exactly the same if it was entered like this:
|Gift Card Sales||$40|
|Gift Cards Redeemed||$52|
Even though the total is different, the individual amounts recorded would be exactly the same. Note that the Discount amount changes from a negative number to a positive when moving it from one side of the equation to the other.
The other factor that influences the recording of sales transactions is tips received on cards. That subject will be covered in another post.