Bookkeeping Guide for Hotels and Restaurants

by | Jun 4, 2024

Proper bookkeeping is crucial for your restaurant or hotel’s financial health. It’s all about keeping track of your money accurately. But it’s not just about numbers; it’s about following the rules too. The Australian Taxation Office (ATO) has guidelines you need to follow. These rules help you stay on the right side of the law and manage your finances wisely. 

In this guide, we’ll show you the basics of bookkeeping for your restaurant or hotel. We’ll also explain why following the ATO guidelines is so important. By the end, you’ll understand how good bookkeeping can keep your business running smoothly and out of trouble with the tax office. 

What is Bookkeeping?

Bookkeeping is the systematic recording, organising, and managing of financial transactions. It involves keeping track of income, expenses, assets, and liabilities to provide a clear picture of a business’s financial health. For the hospitality industry, where profit margins can be tight and operational costs are numerous, accurate bookkeeping is paramount. 

At its core, bookkeeping serves several critical functions. It provides insights into cash flow, allowing business owners to monitor revenue and expenses effectively. By maintaining detailed records, businesses can track trends, identify areas of improvement, and make informed decisions to optimise profitability. 

To understand bookkeeping better, let’s go over some key terms: 

  • Income – This is the money your business earns from sales, accommodations, and any other services you offer. 
  • Expenses – These are the costs you incur to keep your business running smoothly, like wages, rent, and supplies. 
  • AssetsThese are things your business owns that have value, like equipment, furniture, and inventory. 
  • LiabilitiesThese are debts or obligations your business owes to others, such as loans or unpaid bills. 

 Knowing these terms and how they relate to your business’s finances will help you keep better track of your money and make smarter decisions for the future. 

ATO Requirements for Hospitality Industry 

The Australian Taxation Office (ATO) has established specific regulations tailored to the hospitality industry. These regulations encompass various aspects of financial management, including taxation, payroll, and superannuation. 

One key aspect is the Goods and Services Tax (GST), which applies to most goods and services sold in Australia. For restaurants and hotels, understanding GST requirements for food and accommodation services is essential. Proper GST accounting ensures compliance with ATO regulations and prevents potential penalties. 

Additionally, restaurants and hotels must adhere to Pay As You Go (PAYG) withholding obligations for employees. This includes withholding amounts from employee wages and reporting them to the ATO. Compliance with Superannuation Guarantee obligations is also mandatory for eligible employees, ensuring they receive the appropriate contributions to their superannuation funds. 

Essential Bookkeeping Practices for Restaurants and Hotels

When it comes to effective bookkeeping, you need to follow a systematic approach tailored to your restaurant or hotel’s unique needs. Here are some essential practices you should consider: 

1. Chart of Accounts 

Start by developing a comprehensive chart of accounts that reflects your specific revenue streams and expenses. This tailored approach ensures that your transactions are accurately categorised, making financial reporting a breeze. 

2. Daily Transaction Recording 

Make it a habit to record your transactions promptly and accurately. This includes tracking revenue from food and beverage sales, accommodation fees, and any other services you offer. Don’t forget to capture expenses like inventory purchases, payroll, utilities, and maintenance costs too. 

3. Cash Flow Management 

Keep a close eye on your cash flow to ensure you have enough liquidity to cover your expenses. By forecasting your cash inflows and outflows, you can anticipate any financial needs and make strategic decisions to optimise your cash resources.  

4. Internal Controls 

Implementing internal controls is crucial to safeguarding your business against fraud and errors. Consider measures like segregating duties among your staff, conducting regular reconciliations of your accounts, and thoroughly reviewing all financial transactions. 

5. Financial Reporting 

Regularly generate financial statements and reports to assess how your business is performing. These reports provide valuable insights into your revenue trends, expense patterns, and overall financial health, helping you make informed decisions to drive your business forward.

Essential Bookkeeping Practices for Restaurants and Hotels

Recommended Bookkeeping Software and Tools

In today’s digital age, leveraging accounting software can streamline bookkeeping processes and enhance efficiency. Here are some popular options suitable for restaurants and hotels: 

  • QuickBooks: A versatile accounting software with features tailored to small and medium-sized businesses. QuickBooks offers robust functionality for invoicing, expense tracking, and financial reporting. 
  • Xero: A cloud-based accounting platform known for its user-friendly interface and real-time collaboration features. Xero integrates seamlessly with other business applications and offers comprehensive tools for managing finances. 
  • MYOB: A trusted name in accounting software, MYOB offers a range of solutions catering to businesses of all sizes. From basic bookkeeping to advanced financial management, MYOB provides flexibility and scalability.

When choosing accounting software, consider factors such as ease of use, scalability, and integration capabilities. Look for features like inventory tracking, payroll management, and customisable reporting options to meet the specific needs of your business. 

Best Practices for Tax Compliance

Navigating the complexities of taxation requires careful planning and attention to detail. Here are some best practices for tax compliance in the hospitality industry: 

1. Tax Deductions

Maximise your tax deductions by claiming eligible expenses related to your business operations. This may include wages, equipment purchases, marketing costs, and professional fees. 

2. Record Keeping

Maintain accurate records to support your tax claims and withstand potential audits. Keep detailed records of income, expenses, and financial transactions, organised in a systematic manner for easy retrieval. 

3. Professional Guidance

Engage qualified tax professionals for expert advice and assistance with tax planning. An experienced accountant or tax advisor can help you navigate complex tax laws, minimise tax liabilities, and ensure compliance with ATO regulations. 

4. Regular Review

Regularly review your financial position and tax obligations to stay informed of changes that may affect your business. By staying proactive and informed, you can avoid surprises come tax time and plan accordingly. 

Maintaining Compliance and Financial Health

Compliance with ATO regulations is an ongoing commitment that requires diligence and attention to detail. Here are some steps to help you maintain compliance and financial health: 

  • Financial Statement Analysis: Regularly review financial statements and reports to assess your business’s performance and identify areas for improvement. Analyse key metrics such as profitability, liquidity, and solvency to gauge financial health.
  • Bank Reconciliations: Conduct regular reconciliations to ensure accuracy between your financial records and bank statements. Reconciling accounts helps identify discrepancies and errors, allowing you to address them promptly and maintain accurate financial records.
  • Addressing Discrepancies: Address any discrepancies or irregularities in your financial records promptly to maintain compliance with ATO regulations. Investigate the root causes of discrepancies and implement corrective actions to prevent recurrence.
  • Financial Decision Making: Utilise financial data to make informed business decisions and optimise profitability. By leveraging insights from financial reports and analysis, you can identify opportunities for growth, streamline operations, and improve overall performance. 

Benefits of Outsourcing Your Bookkeeping  

Looking to streamline your business operations and optimise your financial management? Outsourcing your bookkeeping services might just be the strategic solution you’ve been searching for. As a business owner, managing your finances effectively is paramount to your success. However, navigating the complexities of bookkeeping can be daunting and time-consuming. That’s where outsourcing comes in. By entrusting your bookkeeping needs to professionals, you can free up valuable time and resources to focus on growing your business. Explore the benefits of outsourcing your bookkeeping and how it can help you achieve your business goals with ease and efficiency. Read more here.  

Next Steps

In the competitive landscape of the hospitality industry, meticulous bookkeeping isn’t just a box to check—it’s a strategic imperative. By understanding the fundamentals of bookkeeping and adhering to ATO regulations, you can steer your business towards financial success and sustainability. From daily transaction recording to tax compliance and financial analysis, every aspect of bookkeeping plays a crucial role in shaping your business’s future.  

We’re here to help

If you’re ready to experience the benefits of outsourcing your bookkeeping, it’s time to take action. Explore your outsourcing options with a trusted and experienced accounting firm like Chan & Naylor Pymble. Our team of dedicated professionals specialises in providing comprehensive bookkeeping services tailored to meet the unique needs of small businesses. Contact us today to learn more about how outsourcing your bookkeeping can help you streamline your operations and achieve your business goals. Let’s work together to take your business to new heights.  

About Chan & Naylor

Founded in 1990, we have partnered with thousands of businesses all over Australia. Located in Sydney NSW, Chan & Naylor Pymble means you’re not just selecting a service provider; you’re gaining a partner aligned with your business goals. You’ll have access to a dedicated client manager supported by a team of accountants that specialises in small business tax and investments.      


This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.