I was asked after the last newsletter to write something up explaining basic bookkeeping. Don’t let your eyes glaze over, I’ll make this simple.
The first thing you need to do is figure out what you are selling. By that I mean, beer for sure, but maybe also merchandise, wine, food, sodas and hard spirits. It is important to track all these things separately. As a brewery, beer is going to be more profitable than wine or food. Each category has a basic set point of profitability and you are only going to know what each one is by tracking the sales individually.
When you set up your point of sale system you will set up sales categories - like the ones I listed above. Next, every item in your point of sales system (POS) is linked to that category. For example Chardonnay goes under Wine, IPA under Beer, Burgers under Food and so on. When your POS spits out a guest check for a customer, it has divided that check into those specific categories in its system. At the end of the shift your POS will give you a report on total sales, but also it will divide all the revenue you collected into your assigned categories and also separate out sales tax collected as well.
I suggest using Quickbooks for your accounting system to keep track of everything. There are accounting software programs more complicated than Quickbooks, and of course you could also make up a spread sheet to input this data which would be very simple, but Quickbooks is pretty much what everybody uses.
With the report from your POS system, you can enter those numbers into quickbooks manually, or given the type of POS system you have it will integrate with Quickbooks and do it automatically. In Quickbooks, you also have those categories set up, so beer sales got into beers sales in Quickbooks, as well as food, wine and so on.
Now going back to the day you made the sales. You also collected money in the form of cash, credit cards, gift certificates and maybe even checks. These are also in separate categories. Credit cards are deposited to your bank electronically, but you have to take the cash or checks to the bank. Your POS system will give you this report also, which goes into Quickbooks. The difference between what you sold and the revenue you collected should balance. Of course this is rarely the case as mistakes are made, but your over/short should be pretty close.
Quickbooks will keep track of all this activity and at the end of the month give you a report that shows sales from each category adding up to total sales. Using your bank statement you will go into Quickbooks once a month and reconcile what the bank says compared to what Quickbooks says. They also should balance. You do this to catch any mistakes that may have occurred on your part or the banks.
To set this up, there are plenty of Quickbooks experts in your town who will do this for you. Also, you can have a bookkeeper come in once a month to go through your Quickbooks to take care of all the taxes that need to be paid, freeing you up to run your business. This is what I recommend rather than you trying to figure this out on your own. It will be up to you to take care of all the inputing but let the pros make sure your taxes are paid. You are a beer expert, not an accountant.
Next week I’ll show you step two in basic accounting. This will be how to use this category information to calculate your cost of sales so you keep track of your actual profitability. Oh man, I bet you can’t wait
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