How Toast’s QuickBooks Integration Can Help Simplify Restaurant Accounting

Restaurant Accounting Hero min 1

Unlock detailed costing insights that enable more immediate action than P&L statements with a Toast QuickBooks integration.

Intuit’s QuickBooks is a popular accounting system used by millions of small businesses across the US. It’s an especially pervasive tool in the restaurant industry.

For QuickBooks restaurant users, the benefits mirror those of other industries. High-level cost management and profit and loss reports are key benefits.

However, restaurant businesses using QuickBooks may not be satisfied with the level of detail the accounting system offers.

Restaurants have to manage tons of costs — many highly variable and constantly in flux, especially with the ongoing food inflation. That’s why it’s critical for restaurant operators to unlock detailed costing insights that enable more immediate action than P&L statements.

That’s what makes Toast’s QuickBooks integration so powerful.

Read on to learn more about setting up QuickBooks for your restaurant, understand the Toast’s QuickBooks integration, and see the value of automating invoice processing and accounts payable while also recording individual ingredient price insights.

How to setup QuickBooks for a restaurant

Once users get their account created and business profile set up, it’s time to lay the groundwork for a strong data foundation in their accounting software. Here are a few critical tasks operators need to nail as they set up QuickBooks for restaurants.

QuickBooks restaurant chart of accounts

Your restaurant’s chart of accounts documents all your financial records — a list of all of expenses, income, assets, and liabilities that flow through your business.

A restaurant chart of accounts in QuickBooks should include critical measurements, such as your cost of goods sold, sale taxes owed, and wages and benefits.

General ledger codes

Your general ledger and vendor list are also critical pieces of a strong QuickBooks restaurant foundation.

Operators use general ledger codes to keep up with ongoing expenses. Every recurring expense has an assigned code or number. The coding is a convenient way for bookkeepers to see a general costs landscape without digging into individual expenses. 

Restaurant vendor list

Your restaurant vendor list contains all the suppliers that you purchase products from. This is a critical step for hitting the ground running with your accounts payable. You want to ensure all the invoices you process are able to be attributed to the proper supplier.

How does Toast integrate with QuickBooks

Many restaurants choose Quickbooks accounting software to manage their balance sheets and cash flow, get invoices paid on time, record sales, accept payments, and more. It’s a powerful, easy-to-use tool that covers all of your basic accounting functions.

But QuickBooks was not designed specifically for restaurants. It doesn’t include reporting capabilities that restaurant operators need, such as understanding how restaurant prime costs — the combination of Cost of Goods Sold (COGS) and labor costs — are impacting profitability.

That’s why Toast’s QuickBooks integration is so beneficial.

Toast integrates with QuickBooks Online and QuickBooks Desktop via xtraCHEF by Toast, a restaurant management tool designed to help control food costs and monitor payables.

The Toast QuickBooks integration features invoice and payroll automation that help operators and bookkeepers overcome manual inputs. It unlocks detailed insights at levels deeper than QuickBooks provides.

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Here’s a detailed look at the components and benefits of Toast’s QuickBooks integration:

Restaurant sales

xtraCHEF by Toast enables restaurant operators to generate daily sales journal entries in QuickBooks without manual data entry or other intervention.

Toast users with xtraCHEF by Toast can pass along daily sales to their mapped-out chart of accounts. This can be especially helpful if your sales categories match your General Ledger in QuickBooks. The Toast QuickBooks integration will automatically integrate category-level sales data to QuickBooks on a configurable schedule.

This sales data can provide valuable insights within Toast. These include general metrics on total sales by cash and credit cards, tips, sales taxes, and discounts as well as more detailed order insights, including sales by menu item, revenue center performance (patio vs bar vs counter), and more.

On top of all that, restaurant sales data unlocks the “sold” component of COGS.

Restaurant invoice automation

xtraCHEF by Toast’s automated invoice processing feature digitizes your vendor invoices, bills, and receipts. 

Accurate invoice data coded to your General Ledger is delivered directly into QuickBooks. Detailed, line-item level ingredient details are extracted for analysis in xtraCHEF, including item codes, description, quantity, unit of measure, pack size, and price.

xtraCHEF allows you to apply a General Ledger (GL) code to a new item or vendor just once, then it recognizes the item code or vendor and automatically applies the correct GL code.

Any updates to your Vendor List or Chart of Accounts in QuickBooks can be synced with the press of a button in xtraCHEF, so your information will stay current in both systems.

And the inclusion of Toast sales data unlocks accurate COGS reports as well as advanced PMIX reporting, variance analysis, recipe profitability insights, and more.

Restaurant payroll integration

Toast’s QuickBooks Payroll integration operates via xtraCHEF and can help restaurant owners and operators save tons of time by automatically coding and syncing payroll journal entries. 

On average, customers on Toast Payroll & Team Management process payroll in ~30 minutes or less with 32% processing in less than 10 minutes.1

Simply configuring your labor groups within xtraCHEF unlocks accuracy, efficiency, and ease of use to help you gain an operator-friendly view into labor cost trends. For example, FOH Hourly and BOH Salary.

This improved visibility empowers you with more informed decision making. Pair these labor insights with enhanced, on-demand views into sales, COGS, and other expenses, and operators can unlock a complete view of overall business health — all easily understandable within xtraCHEF's operating summary and other reporting.

Along with standard payroll payments, Toast offers an integrated tip pooling system. Toast Tips Manager syncs your pooled tips from POS directly with Toast Payroll — eliminating the Excel spreadsheets, helping reduce disputes between team members, and helping motivate staff by easily offering everyone skin in the game.

1Based on past performance at Toast Payroll & Team Management customers. Results may vary.

How to get the most out of your restaurant’s QuickBooks

There’s so much to gain by successfully setting up your restaurant accounting system. It doesn’t matter if you’re a new restaurant just getting started or a restaurant in transition, how you set up QuickBooks for your restaurant defines the accuracy and efficiency of your financial insights.

As we’ve shown above, a Toast QuickBooks integration can go a long way toward automating and optimizing your restaurant financial reporting.

Restaurant prime costs take up about 60 percent of your total costs on average. You want as much granularity and detail into COGS and labor costs as possible — and that’s what your Toast QuickBooks integration can help you achieve.

DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.