How Can Integrating Your POS System with QuickBooks Transform Your Bar's Financial Management?

Managing a bar takes more than great service and solid sales you also need accurate financial systems behind the scenes. 

In this episode, I walk through how to properly move sales data from your POS system into QuickBooks, and why doing it right can save you time, reduce errors, and improve your cash flow. 

We’ll cover: 

• What data you actually need to move from POS to QuickBooks
• Common mistakes bar owners make with integration
• Why over-complicating your setup can hurt more than help
• How to catch errors like double entries or miscategorized sales
• Simple solutions to streamline your financial process

If you're tired of messy books, manual entry, or not knowing where your money is going this episode will help you get clarity and control.

Learn More:
Schedule a Strategy Session
Bar Business Nation Facebook Group
The Bar Business Podcast Website
Chris' Book 'How to Make Top-Shelf Profits in the Bar Business'

Thank you to our show sponsors, SpotOn and Starfish. SpotOn's modern, cloud-based POS system allows bars to increase team productivity and provides the reporting you need to make smart financial decisions. Starfish works with your bookkeeping software using AI to help you make data-driven decisions and maximize your profits while giving you benchmarking data to understand how you compare to the industry at large.
**We are a SpotOn affiliate and earn commissions from the link above.

A podcast for bar, pub, tavern, nightclub, and restaurant owners, managers, and hospitality professionals, covering essential topics like bar inventory, marketing strategies, restaurant financials, and hospitality profits to help increase bar profits and overall success in the hospitality industry.

Transcript

Chris Schneider 0:00
In today's episode, we're diving into the critical world of moving data from your POS system to your accounting system. And in this case, we're going to use QuickBooks as the example. And we're going to explore how integration impacts your cash flow management, examine the potential pitfalls that can cost you time and money, and finally, provide practical solutions to streamline this essential process for your bar business. Hello and welcome to the Bar Business Podcast, where we help bar owners increase profits, attract loyal guests, and simplify operations so you can avoid burnout and finally enjoy your life outside of your bar. I'm your host, Chris Schneider, the bar business coach. Before we get started, a quick thank you to our sponsors, Spot On, who provide a great modern POS solution for the bar and restaurant industry in starfish. Use AI to turn your books into actionable steps to increase profits. Today we are exploring how to effectively move data from your POS system to QuickBooks. Examine the impact on your cash flow and giving you practical solutions to make this process work for your bar. 

Chris Schneider 0:59
For most bar owners, financial management isn't the reason you got into this business. You're passionate about hospitality, creating amazing experiences and building successful establishments. But the reality is, without proper financial management, particularly managing how that data moves from one piece of your tech to another piece of your tech, your bar's profitability and longevity are at risk. Now, I've seen countless bar owners struggle with these disconnected systems, and they spend a lot of time manually moving data, which we'll talk about here in a second. Sometimes manually moving data is the best way to go. But even worse, I've seen people waste a lot of time and money and just anger at creating ties between systems that have worked poorly for them. So we're going to talk about where you can go wrong, where you can go right. And overall hear the good news about this episode is we're going to talk about how with the right approach, you can establish a seamless a seamless data flow from QuickBooks to your POS system, or rather from your Pi system to QuickBooks that will save you time, reduce errors, and give you accurate financial insights. 

Chris Schneider 2:05
On a pretty quick basis. So let's talk about what data in your POS system exists and then moving it to QuickBooks. What does this connection need to look like? And I think the first thing here to think about is that POS systems contain critical information, right. That is your sales data. And unless we get that sales data correctly from your POS system, where it exists now to your accounting system, i.e. QuickBooks, there's no way to maintain proper financial records. There's no way actually to understand how you're doing unless you can get that data out of the POS over to QuickBooks. Combine that with your expense data that's coming in and really put it together to understand your business. Now, most of our POS systems today, whether you're using spot on or toast or anyone else, they can integrate with QuickBooks and they can integrate either directly or through middleware. It depends on the exact systems you're using, but the quality, the functionality, how well these integrations work are going to vary greatly between, say, the random people that make middleware between these two pieces and the stuff made by the tech company, and sometimes the stuff made by the POS company to connect to QuickBooks is better than the random middleware. 

Chris Schneider 3:18
Sometimes the random middleware is better than what the POS company meant. It's really going to depend on a case by case basis. Which POS system are you using? And are you using QuickBooks or are you using zero or restaurant? 365 right. Your accounting software and your POS software? We're meant a lot here on how well that integration works for your system. Now, something to keep in mind is the goal here really is not we're just not moving data from one system to another. Yes, that is what we're doing intrinsically. That is important. But we want to move the right data, not all the data, just the right data. And we want to move it in an organized and accurate way. Otherwise, all that data is just a data lake of meaningless numbers that we will never sort our way through. So really, what we need from the books we don't need. Transaction by transaction data. I don't care which customer bought a sandwich. I care that you sold the sandwich. And really, when it comes to your accounting software, I'm not even sure we'd care if you sold a sandwich. 

Chris Schneider 4:13
We just care that you sold $1,500. That's really what's important for us to bring over to QuickBooks. Individual item data. You can bring over to QuickBooks, individual check data you can bring over to QuickBooks. But that's where I see a lot of times people bring in too much data and it gets difficult. We really just need that summary data. You know, things like total sales, sales by category. So yeah, I sold $1,000. It was $200 worth of liquor, $200 worth of beer, $100 worth of wine, and $500 worth of food. That's what I care about. That's what you really need to know in QuickBooks to get good financial reporting. And so don't worry about the transaction by transaction details. Worry about the big details that are going to make a difference in your finances. Now properly integrated systems If you do this all properly, you're going to get real time visibility into your bar's financial health. That is huge. But again, how much we can trust that real time visibility is going to depend greatly on how well your system set up. 

Chris Schneider 5:08
The other thing to remember here is that your POS data shows your revenue. QuickBooks shows your revenue. Those should not vary from each other. I mean, maybe by a dollar or two if we're talking some rounding errors in the systems. But any variation that's measurable is going to mean that you're wrong because your revenue is your revenue. Your revenue should be the same in both places. The other thing here is that depending on what POS system you're using, depending on what you're paying for on top of that POS, and whether it's inventory software, maybe that inventory software can be tied in. And now you can get cost of goods sold moved over more accurately to your QuickBooks. Again, that's all going to depend on the exact software stack you're dealing with. And we're not really getting into that today. But the idea here is to talk about kind of the general system and give you guys some ideas of how to have the right mindset to think through this sort of thing. So now that's going to take us to common pitfalls that I see happen all the time when people connect their POS to QuickBooks. 

Chris Schneider 6:08
The first one, this goes back to something I said over integration, right? POS systems want to pull in granular data, and that creates unnecessary complexity within your QuickBooks or your accounting system that you just don't need. Now the other big problem I see, and this is potentially the worst, is when things are not connected properly. So either when, say, a revenue category coming out of your system isn't mapped properly to a revenue category in your QuickBooks. Liquor sales needs to go to liquor sales. If liquor sales in your POS is going to food sales in your QuickBooks, obviously that's going to create some issues. So when we don't have these things mapped properly, when we don't have those connections set up properly, we have to be careful and really look for three things to make sure that that is properly set up. We want to look for doubled entries, missing transactions, and mis categorized sales. If you check those three points, you've covered most of the common mess ups that you'll see now when you try to do this yourself as a bar owner, unless you understand POS systems, QuickBooks accounting systems, how accounting works, and all that. 

Chris Schneider 7:08
Understand that you may make a small error that's hard to find, and it may not be a big deal. But think about the movie Office Space. The whole scheme, the criminal enterprise there revolved around moving fractions of a penny off transactions, and it became a huge amount over time, the same way a small data inconsistency can lead to large discrepancies that because it's compounding over time as you move forward. Now also be aware that if you have an inventory system that should be matched, because if your inventory system is not matched, you're going to have some potential cost issues. And as a final note about common pitfalls, let me just say this. If you fail to map things properly and errors go undetected, you end up with major, major problems that will cost you a lot of money to get out of because someone's going to have to get in your books and essentially do a clean up bookkeeping process on what already exists. And I'll tell you right now, if you call me for bookkeeping, I don't like doing bookkeeping. 

Chris Schneider 8:13
So I charge more than most people for it just because I don't want to do it, but be those cleanup projects. That's actually the part of bookkeeping that I actually really like. It's the fun part for me because I have to have solved the problems there. Those get expensive quick. So we want to make sure our data is as tidy as possible, that all our eyes are dotted, that all our T's are crossed when we're moving data, so that you can avoid paying someone like me a whole bunch of money. So let's talk about some practical solutions real quick. Well, work with a bookkeeper or accountant. Someone familiar with restaurant software, bar software, familiar with your POS, familiar with QuickBooks to help you set that up. Then you can set up rules within QuickBooks itself to automatically categorize and enter transactions from your banking records. So that's an automation that exists already within QuickBooks. It's going to pull your bank transactions. And then you can set up rules to automatically classify things. You can also do rules based on that import coming from your POS system, to make sure that all gets categorized automatically, more or less, you need to implement regular reconciliation checks to ensure that your POS data matches your QuickBooks data. 

Chris Schneider 9:17
It's really important that you do that, because that's how you're going to catch these minor issues before they get out of hand. And again, our focus when we're moving things from our POS to QuickBooks is not to move transaction level data. It's to move summary level data. And sometimes depending on the POS system. And again, if you're not using QuickBooks, if you're using restaurant 63, 65, or zero, this is also true where the middleware solution sometimes is better than the solution from the company that made your POS system. It all depends. You can look online and get some reviews and things of that, or you can talk to someone who has done this before, that understands what you need to do to help guide you through that process. Now, how does this integration improve your cash flow management? Because that's really what we want to get to here is this is all about cash flow management. Well, if you have accurate, timely data that's pretty much automated through AI and different pieces of integration between your systems, you're going to be looking at what's essentially real data all the time, up to date accurate data. 

Chris Schneider 10:18
And you cannot make a decision. A data driven decision making requires accurate data, right. Data driven decision have to have accurate data to make it. The way to have accurate financial data is to make sure that your POS and QuickBooks are well tied together, and that is going to produce a reasonable result that you can look at and go, okay, cool this. I may not have reconciled that. My bookkeeper may not need to get in here and change a few things, but in general, I'm looking at real data that I can actually make a real decision off of. So today we've covered the essential pieces of moving that POS data over to QuickBooks. Books. And we've talked about the purpose of the integration, how to avoid your common pitfalls, and how to implement solutions that are actually going to make this work for you. When you do this properly, that connection is going to be seamless, and it streamlines your financial management, improves your cash flow visibility, and ultimately gives you more control over your budget profitability. 

Chris Schneider 11:09
It gives you the proper data to make data driven decisions. But remember that the proper financial planning and proper financial management isn't just about compliance. It's about having the data you need to make those smart decisions. So we want to set up things properly. Double check them and then make sure we have that perfect data pipeline to make the best decisions to drive our bars forward in the future. That about wraps it up for today. If you enjoyed today's insights, make sure you like, subscribe and leave a review. If you are ready to take your bar to the next level, schedule a strategy session with me by clicking the link in the show notes below. Until next time, have a great day and we will talk again later.