What's the best way to handle cash management in a restaurant?
Start with a consistent starting bank in each register. Many restaurants use $200 to $300 in small bills and coins. The exact amount matters less than keeping it consistent so you can identify variances immediately. If you start with different amounts each shift, you’re making reconciliation harder than it needs to be.
Count cash at every shift change. The outgoing server or cashier counts their drawer, you verify it, and the next person takes over with a documented count. This creates accountability and identifies when shortages happen rather than discovering a problem days later with no idea who was responsible.
Reconcile cash to your POS at the end of every day. Your point-of-sale system knows exactly how much cash should be in the drawer based on cash sales. Compare that to what’s actually there. Small variances happen, but consistent shortages or overages signal a problem that needs investigating.
Make deposits frequently. Restaurants and bars running significant cash volume should deposit daily. Holding large amounts of cash in the restaurant is a security risk and makes it harder to track where money went. At minimum, deposit whenever your safe exceeds a few thousand dollars. Every deposit should match documented amounts from your daily reconciliation.
Limit who handles cash. The more people touching cash between the register and the bank, the more opportunities for things to go wrong. Ideally one person per shift is responsible for counting and preparing deposits. They sign off on the amount, and someone else verifies before it goes to the bank.
Track cash variances over time. A $5 shortage once is nothing. A $5 shortage every shift adds up to real money and usually indicates either a training issue or something worse. Keep a log of variances by shift and by employee. Patterns tell you where to focus attention.
Watch your cash-to-credit ratio. If your POS shows 30% cash sales but your deposits suggest 25%, something is wrong. Either cash isn’t making it to the deposit, your POS categories are off, or there’s a problem you need to find.
Your bookkeeper should reconcile bank deposits to your POS reports monthly at minimum. A Richmond bookkeeper familiar with restaurant operations can spot discrepancies that might not be obvious from inside the business. Deposits that don’t match sales reports, unusual patterns in cash versus card transactions, or timing issues all show up during proper reconciliation.
Good cash management isn’t just about preventing theft. It’s about knowing your actual numbers. Restaurants operate on thin margins, and unclear cash handling creates uncertainty in your financial statements. When you apply for financing or want to understand your real food costs, accurate cash records are essential.
Greater Richmond's Small Business Bookkeeper
The Next Step:
A Short Conversation
Fifteen minutes to tell us what you're dealing with. We'll let you know how we can help and give you a clear price quote.
More Questions
How do I handle returns and refunds in my books?
Returns and refunds should reduce your sales revenue, not create new expenses. Record customer refunds as credit memos or refund receipts, and track vendor returns as credits against future purchases.
Read answerWhy doesn't my Amazon deposit match my sales total?
Amazon deposits are the net amount after fees, not your gross sales. Referral fees, FBA fees, storage charges, advertising costs, and refunds all get deducted before the money hits your bank account.
Read answerShould I connect my bank account to QuickBooks or enter transactions manually?
Connect your bank account. Bank feeds save hours of data entry time and reduce typing errors. You'll still need to review and categorize transactions, but you'll start from accurate data instead of hoping you entered everything correctly.
Read answerHow do I handle progress billing in QuickBooks?
Enable progress invoicing in QuickBooks settings, then create invoices from estimates for partial amounts. The feature is straightforward but only works well if your estimates are accurate and you track costs alongside billings.
Read answerDo I need to track tips differently for payroll purposes?
Yes. Tips are taxable wages that require separate tracking, withholding, and reporting. Employees must report tips to you, and you must withhold income tax, Social Security, and Medicare from the total.
Read answerI'm months behind on my bookkeeping. Where do I start?
Start by gathering all your bank and credit card statements for the missing months. Check for urgent deadlines like quarterly taxes or pending loan applications, then work through reconciliation one month at a time starting with the oldest.
Read answer
