6 best accounting software for restaurants

Restaurant accounting software is a financial management tool designed specifically for restaurants to automate bookkeeping, track cash flow, and integrate with point-of-sale (POS) systems. Unlike standard accounting software, it includes industry-specific features like inventory tracking, payroll processing, tip distribution, and cost of goods sold (COGS) management to help restaurant owners stay profitable.

How restaurant accounting differs from other businesses

Small restaurant owners spend an average of 10 hours per week on accounting tasks. On top of that, manual accounting errors can cost businesses thousands in tax penalties, inventory miscalculations, and payroll discrepancies.

Accounting software designed for restaurants offers a better return on investment (ROI) by reducing errors, automating tax compliance, and providing real-time financial insights. With restaurant profit margins averaging 3% to 5%, small cost tracking or tax filing mistakes can significantly impact overall revenue. Automating these processes helps restaurant owners cut bookkeeping costs, improve efficiency, and make data-driven decisions to protect their bottom line.

Cost of goods sold (COGS) management: Restaurants must track ingredient costs, waste, and portion control to maintain profitability. Unlike traditional businesses, food prices fluctuate weekly, requiring real-time expense tracking. Food costs make up 28% to 35% of revenue, making accurate cost calculations critical. Restaurants must also differentiate between usable inventory and spoilage to prevent losses.

Payroll and tip distribution compliance: Unlike other industries, restaurants handle tipped wages and minimum wage adjustments. Employers must accurately report and withhold taxes on tips to comply with labor laws. Mismanagement can result in fines, wage disputes, and IRS audits. Payroll often includes seasonal employees, variable schedules, and overtime tracking, adding complexity.

High-volume transactions and cash flow management: Restaurants process hundreds or thousands of transactions daily, requiring precise bookkeeping. With high cash flow turnover, financial tracking must be accurate to avoid discrepancies. Credit card fees and chargebacks must be monitored closely to maintain profitability. With Ramp, restaurants can save up to 16 hours each week with automated receipt tracking. Unlike service-based businesses, restaurant revenue varies daily based on demand, seasonality, and peak hours.

Sales tax complexity: Restaurants must account for different tax rates on dine-in, takeout, delivery, and alcohol sales. Tax regulations vary by state and even city, making compliance challenging. Incorrect sales tax reporting can lead to penalties, audits, and unexpected tax liabilities.

Best accounting software for restaurants

Choosing the right accounting software depends on business size, sales volume, and operational complexity. A small bistro may prioritize affordable software with simple bookkeeping, while a quick-service restaurant (QSR) chain needs multi-location financial tracking and POS integration.

A food truck or market stall benefits from mobile-friendly software with real-time expense tracking, whereas a large restaurant requires advanced inventory management, automated payroll, and tax compliance tools.

1. Restaurant365: Best for full-service chains

Restaurant365 is a comprehensive accounting and management software designed exclusively for restaurants. It combines financial tracking, inventory control, payroll, and reporting into a single platform, helping restaurant owners streamline operations. Unlike traditional accounting tools, it connects front-of-house, back-of-house, and financial data to improve accuracy and decision-making.

Key benefits

• Seamless POS integration with over 80 restaurant systems for accurate data syncing.
• Advanced inventory management that tracks ingredient levels, food waste, and recipe costs.
• Automated accounting and bank reconciliation to reduce manual entry errors.
• Labor and scheduling tools that optimize staff shifts based on sales forecasts.
• Real-time reporting and cost analysis to monitor actual versus theoretical expenses.

Drawbacks

• Higher cost compared to other accounting tools, making it less ideal for small restaurants.
• There is a steep learning curve due to the platform’s extensive features and capabilities.

Restaurant365 is ideal for multi-location restaurants, full-service chains, and high-volume establishments that need an all-in-one solution to manage accounting, inventory, and labor. It’s particularly beneficial for restaurants looking to integrate financial tracking with their POS system and reduce food and labor costs through real-time reporting.

2. Xero: Best for growing restaurants

Xero is a cloud-based accounting software designed for restaurants and hospitality businesses. It helps owners manage finances, track expenses, and monitor cash flow from a centralized platform.

Built for scalability, Xero supports restaurants at different growth stages, from small food stalls to full-service establishments. The platform’s integration with POS systems, payroll services, and inventory tools makes it a good choice for restaurants looking to automate financial processes and maintain accurate records.

Key benefits

• Affordable pricing starts at $15 per month.
• User-friendly interface that simplifies financial management.
• Real-time insights into cash flow, sales, and expenses.
• Seamless integration with over 1,000 business applications.
• Scalable solution that grows with your restaurant business.

Drawbacks

• Limited features in the lowest-tier plan.
• Invoice customization options can be less intuitive.
• Additional training may be required for those new to accounting software.

Xero is best suited for growing restaurants, cafes, and bars that need a scalable, easy-to-use accounting solution with extensive integration capabilities. Its affordability and real-time insights make it ideal for businesses looking to streamline operations and support sustainable growth.

3. ZohoBooks: Best for built-in inventory tracking

Zoho Books is a cloud-based accounting software designed to help small to medium-sized businesses, including restaurants, manage their finances efficiently. It offers a comprehensive suite of accounting, invoicing, and financial reporting tools, making it easier for restaurant owners to track expenses, manage cash flow, and stay tax-compliant.

The platform integrates seamlessly with POS systems, payroll services, and Zoho’s suite of business tools, ensuring that restaurant owners have a complete financial overview at all times.

Key benefits

• Automation of financial tasks reduces manual bookkeeping and eliminates errors.
• Inventory tracking tools help monitor stock levels, set reorder points, and prevent shortages.
• Seamless integration with Zoho’s ecosystem and third-party accounting tools.
• Mobile accessibility allows restaurant owners to manage finances on the go.
• Affordable pricing plans make it a budget-friendly option for small restaurants.

Drawbacks

• User limits per pricing tier may not be ideal for larger restaurant teams.
• Advanced features require a learning curve, especially for users new to accounting automation.
• Transaction limits on lower-tier plans may not be suitable for high-volume businesses.

Zoho Books is ideal for small to medium-sized restaurants, cafés, and food service businesses looking to automate accounting, track inventory, and simplify financial management.

4. Wave: Best for small restaurants and food trucks

Wave is a cloud-based accounting software designed for small businesses, including restaurants. It provides basic bookkeeping, invoicing, and financial tracking without subscription fees, making it an attractive choice for budget-conscious restaurant owners. With a simple interface and automation tools, Wave helps streamline financial tasks, ensuring accurate record-keeping and compliance.

Key benefits

• Free access to core accounting features, ideal for budget-conscious businesses.
• Unlimited invoicing and expense tracking without subscription fees.
• The user-friendly interface is suitable for those without accounting experience.
• Cloud-based access allows management from any device with an internet connection.
• Integration with bank accounts for automatic transaction imports.

Drawbacks

• Limited advanced features compared to paid accounting software.
• Customer support options are restricted in the free plan.
• Some users report challenges with invoice customization.

Wave is ideal for small restaurants, cafés, food trucks, and startups seeking a cost-effective accounting solution without compromising essential features. Its free access and straightforward design make it particularly suitable for businesses with limited accounting expertise or tight budgets.

5. MarginEdge: Best for real-time cost control and automation

MarginEdge is a restaurant management platform that simplifies back-office operations and improves financial visibility. Built specifically for the food service industry, it helps restaurants track expenses, manage vendor invoices, and analyze profitability in real time. MarginEdge seamlessly integrates with POS systems and accounting software, reducing manual bookkeeping efforts while providing valuable insights into food costs and operational efficiency.

Key benefits

• Automated invoice processing to eliminate manual data entry and reduce errors.
• Real-time food cost tracking to monitor expenses and optimize purchasing.
• Inventory management tools to reduce waste and improve stock control.
• Recipe costing and menu analysis to identify high-margin items and improve profitability.
• Seamless integration with POS and accounting platforms for accurate financial tracking.

Drawbacks

• It is not a full accounting system; it requires integration with third-party accounting software.
• No built-in payroll management, limiting its use for labor cost tracking.
• Pricing starts at $330 per month per location, which may be costly for smaller restaurants.

MarginEdge is ideal for mid-sized and multi-location restaurants looking for real-time cost tracking, automated invoice processing, and seamless accounting integrations. Its inventory and menu analysis tools make it particularly valuable for restaurants focused on improving margins and reducing operational waste.

6. HostBooks: AI-powered accounting automation

HostBooks is a comprehensive accounting software that simplifies financial management for businesses, including restaurants. It centralizes accounting, taxation, and compliance processes to help restaurant owners maintain accurate records and improve efficiency. With automation capabilities and AI-powered financial tools, HostBooks reduces manual bookkeeping efforts and ensures compliance with tax regulations.

Key benefits

• Automated expense tracking for easier cost management.
• Quick and accurate invoice generation for billing and payments.
• Fixed asset management to track depreciation and maintenance.
• Inventory monitoring to prevent overstocking or shortages.
• Vendor management to streamline supplier payments and purchase orders.

Drawbacks

• No free plan is available, limiting affordability for small restaurants.
• The pricing is on the higher side, which may not be ideal for startups.

HostBooks is best suited for small to medium-sized restaurants, cafés, and catering businesses looking for an automated accounting solution. Its inventory and vendor management tools make it a strong choice for businesses that rely on supplier coordination and cost tracking to maintain profitability.

How to choose the right accounting software for your restaurant

Depending on the system's complexity, setting up your accounting software can take anywhere from a few days to several weeks. Cloud-based solutions with plug-and-play integrations are quicker to deploy, while more advanced systems requiring custom configurations and POS integration take longer.

Integration with your POS system

A restaurant’s POS system records all sales transactions, making seamless integration with accounting software a must. This ensures that sales, refunds, and expenses are automatically recorded, eliminating manual data entry and reducing errors. A system with POS integration also enables real-time financial reporting, allowing restaurant owners to track revenue, monitor cash flow, and reconcile accounts effortlessly.

Inventory and cost tracking

As discussed earlier, food is a major cost of a restaurant’s revenue, making accurate cost tracking a top priority. The right accounting software should provide real-time inventory tracking, cost of goods sold (COGS) calculations, and waste monitoring.

These features help restaurants prevent over-ordering, control portion sizes, and optimize menu pricing. Software that automates inventory updates based on sales data can significantly reduce food waste and improve profit margins.

Payroll and tip management

Restaurants have complex payroll structures that include hourly wages, tips, overtime, and shift-based pay. Accounting software should automate payroll processing, calculate tax withholdings, and ensure compliance with minimum wage laws.

A system with tip-tracking features simplifies tip pooling and distribution, ensuring that employees receive accurate payments and that payroll taxes are correctly filed.

Tax compliance and reporting

Restaurants must account for different tax rates depending on dine-in, takeout, and alcohol sales. The right software should automatically calculate and track sales tax, generate tax reports, and simplify end-of-year tax filing. Compliance with local, state, and federal tax regulations is critical, and software that ensures accuracy can help restaurants avoid audits and penalties.

Scalability for growth

As a restaurant expands, financial management becomes more complex. Software that supports multiple locations, tracks financials across different units, and allows centralized reporting is essential for growth. A scalable system prevents the need for costly software transitions as the business expands, ensuring a smooth financial workflow.

User-friendly interface

Accounting software should be intuitive and easy to navigate. A complicated system slows down operations and increases the risk of errors. Look for a solution that offers clear dashboards, automated workflows, and simple reporting tools. Software that is easy to set up and requires minimal training helps restaurant owners and managers focus on running their business rather than struggling with bookkeeping.

Making accounting easier for your restaurant

Restaurants operate on razor-thin margins, and manual accounting processes often lead to missed expenses, cash flow issues, and tax penalties. The solution is to choose the right accounting tools that integrate seamlessly into daily operations.

Automation is the key to efficiency. Restaurants that rely on manual expense tracking spend at least 10 hours a week on bookkeeping tasks. That’s valuable time that could be spent optimizing operations, improving customer service, or expanding the business. Modern accounting tools automate invoice processing, reconcile bank statements instantly, and generate real-time financial reports. These are critical for making fast, data-driven decisions that improve profitability.

With automated expense tracking, AI-powered cost categorization, and real-time financial insights, Ramp eliminates the need for spreadsheets and manual data entry. It integrates with leading accounting platforms and restaurant management tools, ensuring that every vendor payment, inventory purchase, and employee expense is logged and reconciled.

With the right accounting tool and integrations, you'll make fewer errors, get better budget control, and a complete financial picture.