How to record your sales in Xero for Food-and-Beverage (F&B) businesses
Xero is a popular choice for many small F&B business, as most F&B businesses do not really require complicated accounting software or a full CRM. However, the invoicing function in Xero is definitely not adequate for F&B businesses as it does not have a table function or the ability to send the order to the kitchen for food to be prepared and as Xero runs on the cloud, it can be a major issue when connection is slow or drops during operation hours. Hence most F&B businesses will use a Point-of-Sales (POS) software to record their sales which can fulfil their needs better.
How to record the POS sales in Xero
This is a question that we get a lot from new users just starting to use Xero and from our years of assisting numerous F&B customers from small cafes to restaurants. As the sales of the F&B is comprised of numerous sales in a day, should we record each sales as an invoice in Xero? How about the payment types? Some customers will pay using cash or credit card or numerous payment options available to them.
When we are considering this question, we need to consider what information will be most useful to management to be recorded in Xero and also assist to make the subsequent bank reconciliation easier.
The best way to record the POS sales in Xero will be to create one Xero invoice as a batch for one daily sales. Even if the F&B business has hundreds of sales today, only one invoice should be created.
In the example above, to record the daily sales for 18th March, we should create a “Daily Sales” contact and enter the invoice date as 18th March. For the reference, we should put down it as the date itself in the format “YYYYMMDD”. This step is crucial to help in the bank reconciliation later.
In the line items, the categories of sales should be spilt into the different types of food and beverages so that it will be possible to do subsequently analysis of trends for management reporting purposes.
Once that is done, we should approve the invoice. We have not yet record the payment method which will be the next step. We will record the payment on this invoice splitting via the different payment methods that the business accepts. We should enter in the type of payment method via the Reference field. This is very important and will make the subsequent bank reconciliation much easier.
The completed invoice will look something like this:
Now to show how this will greatly help you in doing your bank reconciliation subsequently, most credit card payments may batch a few days of sales when its deposited into the bank account, especially sales during weekends. If cash deposits are not done daily, the deposits amount in the bank may also comprise of a couple of days of cash sales. So when doing the bank reconciliation, when you need to reconcile a deposit from Visa/Master. We can enter in the search “Visa/Master” and it will show the outstanding deposits from the payment gateway that has yet to be deposited.
Now you should be able to record and do the bank reconciliation for your F&B business easier. However, you might be wondering if you need to enter in all the daily sales invoice by invoice. There are easier ways to do so. Our next section talks about the different ways we can record these daily sales into Xero.
Getting your F&B sales into Xero
There are 3 different ways to get the sales imported into Xero but as that is not the focus of this article, we will only touch on them briefly.
1. Existing integration
If the POS software is a software that already has an existing integration with Xero and is a Xero partner, then getting the sales in will just be a matter of activating the integration. Most of the time, it will require entering your Xero’s credentials to authorise the POS software to push the sales into Xero.
2. Manually entering sales into Xero
Unfortunately, there are numerous POS software on the market and if there’s no existing integration, the other option is to enter in the sales via the invoicing function in Xero. This is the most tedious way and we definitely will not recommend it as there’s an even better and more efficient way to import your sales into Xero.
3. Import sales into Xero
Luckily, as using a software is all about efficiency, Xero offers an easy way to get lot of sales into Xero efficiently. Most POS software will enable exporting the daily, weekly or monthly sales into an excel or spreadsheet format. The sales can be then pasted into Xero’s sales import template which can be downloaded under the invoicing function. Just click on the import button in the screenshot below:
And then you can download the template file to copy and paste the sales from the POS report into Xero’s import template. After which you can select the file to import and viola, all the sales are in Xero.
Easily record and reconcile sales for F&B in Xero
We have shown how to easily record sales and reconcile sales in Xero. We also believe that as a small business owner, you should not be spending too much resources whether it is time or money on these accounting tasks. We can assist to take care of your business needs and for clients that needs assistance with importing their sales daily into Xero, please do contact us. We will be glad to assist.