As restaurant owners across the U.S. make major operational changes in response to the COVID-19 pandemic, their ability to track profitability and metrics like cost of goods sold, labor and sales has become crucial. Strong restaurant accounting software can help you make informed, data-driven decisions that protect your restaurant from changing tides by giving you access to the numbers behind the operation.
The following restaurant accounting software products were chosen based on their point-of-sale system integration options, reporting capabilities, restaurant management software integrations and inventory management features. Because restaurants deal with both front-of-house and back-of-house operations, POS integration options and reporting capabilities took center stage and were weighted most heavily.
Here are NerdWallet’s top picks for restaurant accounting software.
Restaurant365: Most comprehensive restaurant accounting software
Price: Starts at $249 per month based on a quarterly billing cycle. Restaurants can request a free demo.
All-in-one restaurant management platform.
Direct integration with more than 70 POS systems.
Recipe costing in Essential and Professional plans.
Direct vendor integration.
Why we like it: Restaurant365 is an all-in-one software platform that offers accounting, inventory management, scheduling and reporting software along with payroll and HR options. The system integrates fully with more than 70 popular POS systems, including Toast, Square, Clover, Revel and Lightspeed. While Restaurant365 is more expensive compared with other accounting options, you can’t beat the platform’s high level of integration in the restaurant industry. Aside from saving time, the integrations help ensure that data from the front of house and back of house syncs regularly and that reports are up to date and accurate.
Restaurant365 also includes restaurant-specific features, like inventory management and recipe costing, that could otherwise cost extra or require third-party add-ons. The same goes for restaurant-specific reporting. Built-in dashboards let you compare labor costs and sales according to date, and the platform runs analysis reports on actual versus theoretical costs, which can help you flag food waste and identify opportunities to save on controllable costs. Theoretical costs and quantities are automatically added to the report based on POS and vendor data. This process is particularly important for higher-cost ingredients that hold more sway over your bottom line.
QuickBooks Online: Scalable reporting capabilities
Price: $70 per month and up. You can choose either 50% off the first three months or a free 30-day trial. QuickBooks Online offers less expensive options, but they aren’t recommended for restaurants.
Lacks restaurant management software.
Some POS systems, including Micros and Upserve, can be integrated only through outside apps.
Why we like it: Though QuickBooks Online isn’t made specifically for the restaurant industry, its advanced reporting capabilities, scalability and versatility render it a contender, especially when integrated with restaurant POS systems and other apps. On its own, QuickBooks Online can generate purchase orders, track time and inventory, handle multiple locations, automate bill and invoice approvals and run profit and loss reports. Another plus: It can create reports on up to 40 different tracking categories of your choosing. You can use the tags to separate products sold based on location and sales channel, for example. Subcategories within the sales channel tag could include delivery, in-house and pickup orders. QuickBooks Online’s Advanced plan allows for unlimited tag groups, though 40 should be sufficient for most small restaurants.
Since QuickBooks Online isn’t an all-in-one restaurant software platform, however, expect to spend extra time finding and setting up restaurant management integrations, as well as figuring out how to run restaurant-specific reports. While QuickBooks Online has exceptional reporting capabilities, they aren’t shaped around restaurants and might take more effort to customize initially. The same goes for Xero.
Xero: Lower price, rich features
Price: $32 per month and up. There’s a free 30-day trial. Xero has a less expensive plan that’s intended for sole proprietors, but not ideal for restaurants.
Fixed asset management included in all plans.
More than 1,000 app integrations.
Lacks restaurant management software.
Lightspeed and Square POS integrations are poorly rated.
Why we like it: Aside from being a solid general accounting solution, all Xero plans come with fixed asset management that helps restaurant owners take into account the changing values of POS hardware, kitchen equipment and properties. While it’s not the most essential feature, it’s a definite bonus. You can also bundle any Xero accounting plan with Gusto for payroll. The integration with Gusto works well; it syncs payroll data with the accounting software and allows you to run payroll or access payroll reports from Xero.
Additionally, Xero’s extensive App Marketplace boosts your chances of finding restaurant-specific add-ons. Just make sure the app you have in mind gets positive reviews for its Xero integration.
How to choose restaurant accounting software
At a minimum, restaurant accounting software should be cloud-based, include inventory management and have the ability to record tips, create purchase orders and run profit and loss reports. Here are a few other points to keep in mind while weighing your restaurant accounting software options.
Cheaper isn’t always better. Don’t underestimate the value of advanced, more costly reporting capabilities — they’re vital to a restaurant’s success, especially when you take into account the added complexity of recipe costing and working with food vendors. QuickBooks Online, for instance, offers lower-tier, less expensive plans that aren’t included in this review because they lack features like inventory tracking and don’t come with comprehensive reporting.
Less expensive general accounting solutions like ZipBooks and FreshBooks were also considered, but their reporting, inventory management and integration options ultimately didn’t make the grade. While they might work short-term, established restaurants will require greater capabilities in the long run. Having to uproot a beginner system and switch to a completely different one can be costly and time-consuming; starting out with scalable accounting software is generally best.
Accounting software integrations
While certain restaurant-specific add-ons can help fill in the gaps when it comes to scheduling employees or automating the invoicing process, beware of integrations that require a third-party app. You might have to pay extra just to connect your POS and accounting systems — and that’s in addition to what you’re already paying for the POS system, accounting software and payroll software.
Before choosing accounting software for your restaurant, know which POS system and payroll software product you plan to use. Make sure they all integrate directly with each other for free and receive positive reviews. And be aware that just because there’s a direct integration doesn’t mean it works well. For example, Xero has its own Square app that connects the two products, but it receives only 1.4 out of 5 stars in Xero’s App Marketplace.
Restaurant owners keep track of a handful of reports that provide insight on menu item sales, cost of goods sold, labor and actual versus theoretical costs. Before committing to an accounting software product, try out a demo or free trial and make sure you’ll feel comfortable running these reports regularly.
Prior to setup, think about how to customize your reports. For example, you might categorize menu items according to the sales channel to see which ones sell better in-house versus online. In the case of another COVID-19 surge, knowing which menu items sell better online is critical information. Similarly, choose an accounting system that syncs with your inventory, vendor and POS data so as much of the process is automated as possible.