Transcription
[Music] Hey guys, this is Claudia here from The Bookkeeping Experts, back for more, more information on QuickBooks Online. We come back every week to give you information on QuickBooks Online to help you manage your books so you can take your business to the next level. Today, we are talking about a third-party app called Toast. T-O-A-S-T. And by the way, I'm not getting paid by Toast. It's just a technology that I really like for my restaurant customers because it gives my my restaurant customers the information they need in order to understand their expenses, understand their cost, and understand what's their bottom line so that they can stay up to date on adjusting their prices according to their cost of goods sold, cost of labor, and so on and so forth.
So, Toast does not have a good integration with QuickBooks. There's a couple of integrations there that you actually pay a monthly fee, but guess what? I don't recommend that because it is not working the way it's supposed to. So, what I do recommend is that it's actually to do what we call a recurring transaction. We're going to do a recurring journal entry. And today, I'm going to show you exactly how that recurring journal entry works and what are the fields that you need to enter so that every month, you can just click on that transaction and just fill it out. So, basically, just fill in the blanks. Very, very, very simple. That is the best way to deal if you do use Toast. And by the way, a lot of the restaurants are using Toast right now. I've been going to different restaurants, I'm checking their system there. Except for the large chain restaurants, all the smaller restaurants are using, not all of them, but a lot of them are using Toast, and also Square and Clover. But Toast is a great technology.
So here we go. Without much further ado, we are going to QuickBooks Online. There it is. Okay, now this is a sample company and this has nothing to do with restaurants, but that's not the point. That's not why we're here. We're here just to show you how to create a recurring journal entry for those of you who have Toast, who use Toast. Okay. The first thing you're going to do is click on this top right-hand side gear menu. Okay. And then you're going to click on what we call recurring transactions. Recurring transactions, by the way, it's very useful if you have like an ongoing bill or an ongoing client. So I actually use for some of my clients that are ongoing. You can create like ongoing invoices and so on and so forth. But today, we're going to use this for a journal entry.
So you're going to click on the new. And here you're going to click on this arrow down and we're going to select journal entry. As you can see, recurring transaction can be for a lot of things. So bill, no, non-posting charge, check, no, non-posting, credit, credit card, credit, credit memo, all, estimate, and so on and so forth. Invoices, like I said, invoice is very good. Refund, sales tax. But obviously, this is for recurring. So you can do it scheduled or non-scheduled. If you're doing it any invoice, you can actually do it scheduled if it is the same amount over and over again. That's going to save you tons of time. But today, we're going to do journal entry, like I said. Okay. You can use that for, for some of you that use third-party payroll, you can use those journal entry says recurring transaction so you don't have to reinvent the wheel each time, each month, you're going to record those, those payroll adjustments.
Okay, here it is. Now, the first thing you want to do because I don't want this to be scheduled is click on the arrow right next to schedule and just put unscheduled because this is just a template. So we're going to, I'm going to name the template, by the way, and I'm going to put monthly, monthly sales. And that's all I need to do. And here are the accounts that I'm going to use for for Toast. I'm going to have sales, or sales of product income, and this is going to be a credit. And I'm just going to put a zero here because it's a credit, but it's, I'm going to put zero because I'm going to fill out each month. The next one, and all this information, by the way, is going to be on your Toast sales summary.
The next one is going to be tips payable. Oh, and this is a, this is just a sample account, so it doesn't have all the information I want. So I'm going to have to create some of them. Other current and undistributed tips. There you go. I can put here tips payable because that's how it is on Toast. All right. So this is going to be also a credit because we are going to record a liability on your account. That means, you know, you receive this money and you're going to distribute to your employees. So you can actually, on the description, you can put gratuity here, or if you want to put a little bit more notes, that's fine. Okay.
Now, the next one is your sales tax, sales tax payable. And of course, we don't have this because this is a simple account. So we're going to create sales tax payable. It's another current liability because you pay within a year. And we are going to select sales tax payable. So sales tax, I'm going to name sales tax payable because once again, it's a liability. To increase the liability, I'm going to credit that because I'm, I'm actually creating all these account so I can record all my liabilities and all my income as well.
So we're going to also record the discount giving. It's not gratuity, by the way. I got a QuickBooks sometimes that use AI and it doesn't work very good. So discount given is going to be a debit because it's a counter account of income. We're going to do cash deposits and it's going to be a debit as well. And on the cash deposit, oh, on the cash deposit, it is a bank account. So once again, we are going to create a bank account, cash on hand. All right. So it's going to be another debit.
The next account is going to be the Toast clearance account, and we're going to talk about that in just a moment. For Toast, we do use a clearance account, by the way. It's a bank account and we can leave it as cash on hand and we're going to call it Toast clearance account. That's where we manage all the income and expense coming from Toast. We use the clearance account just to keep your books in better shape.
First, we have next, we have the gift card sold. So this is a, this is gift card that you actually redeemed. Okay, or gift card, I'm sorry, I should say redeemed, not sold. Or we can put just gift card. And we're, once again, gift card is another liability account and is other current liability. And we should have gift card here. No, we don't. So we're just going to call current liability and we're going to call gift card. Gift card is going to be now, gift card redeemed is going to be a debit. Now, when you sell sell sell gift card, then it's a liability. So all right. And by the way, we do need to enter also the gift card right over here. Actually, it should be next to sales tax payable. I skipped that. So let me just add over here to add a line. You can click on this plus on the journal entry and voila. I want it right here.
So once again, it's going to be gift card, but this gift card is going to be a credit because those are. And then I can put on the note here, this is gift card sold. And this gift card here is gift card redeemed. What is the difference, by the way? We're going to use the same account, but we're going to credit when we sell it because we're increasing the liability, and we're going to debit when we actually redeem those gift cards because that's when we earn the income, right? Okay.
Now, gift card redeem. The next one is the, we have the Toast clearance account, and that's it. Okay. As a matter of fact, I want the Toast gift account, Toast clearance account as the last one because that's how much we're going to put there as our net income or net deposit. So let's see if we have everything. We have sales of product, we have tips payable, we have sales tax payable, gift card. Oh, we need tips payable. Do we have tips payable? No, we don't. Okay, let's add here. Remember how to do this? We're going to put tips here, tips payable. I thought I had tips payable here, but I didn't. Okay, once again, tips payable is going to be, oh no, we do have tips payable. It's right here on the top. Hello. Okay, so sales, tips payable, sales tax to pay, gift card, discount giving, cash, gift card redeemed, and then Toast clearance account. So those are all the accounts you need to have. And look at this, we have our debits. I'm sorry, we have our credits and we have our debits here. You can do the other way around as well.
Okay, first of all, on the top line, we're going to save this template. Okay. I'm going to save it. All right. Okay. Now, whenever I want to find this transaction, what am I going to do? I'm going to click on the gear menu, go to recurring transaction, and there it is. I'm just going to go ahead and just click on use. We can edit this, by the way. If you click on the arrow next to use, you can edit, you can duplicate, you can do whatever you want with it. So I'm going to use it. And here it is. Here's our journal entry. And what I'm going to use here is the information coming from Toast.
Okay, so Toast, like I said, is the sales summary that you receive from Toast. And I'm going to kind of show you. Once you log into Toast, you want to go to reports, and then you want to go to financial reports, and then you want to go to sales summary. Sales summary kind of looks like this. It's going to have, oh, let me go to the top here. Oh, so it's going to have your revenue summary, your gratuity, all the information is here. Okay. So the first part we're going to use is this one. And we're going to go back to QuickBooks right now. We're going to fill out that information. First of all, I want to find out what is our total sales. And I'm looking, I'm looking at the report. My gross sales is going to be this much. Just coming up with a number, a nice healthy number. Okay.
The next, we're going to have tips payable. Tips payable can be, you know, for restaurants, can be a significant amount. Let's say it's $50,000. I'm just putting some round numbers here. And we're looking at this on the first page, on the very top. Okay. And we're going to sales tax payable. Now, sales tax payable, let's say, okay, we owe here $144,000. That's quite a bit, but we're just, you know, putting a number here. And let's say the gift card, let's say you sold maybe $3,000 of gift card. Oh, by the way, I'm debiting it and this should be a credit. No, no, frat. Cut, paste. This is all credit. The first part is all credit because we're recording liability. So that's why it's credit. I put zero. So when you put zero, sometimes it's a little confusing, but the first part is all credit. So it's all going to be credits up to gift card sold.
Next thing is discount given. Discount is a debit, like I said, we it's return on food. So we're going to put a round number here. We're going to do now, we're going to do the deposits, right? So we're going to look at the reports. We're going to scroll down to see the form of payment. The form of payment is going to be down below. And the first part is going to say cash, cash payment. So we're going to come up with a number here. We're going to say $30,000 was cash. This is gift card redeemed. Let's suppose that I redeem it. It was a busy month, we redeemed $2,500. And then finally, the Toast clearance account should be a sum. Should be a sum of all the credit card payments that is giving on the Toast.
Once again, payment form. Usually what I do is the following. I look at the total number, total payments, and then I subtract the cash and I subtract the other payments as well, such as gift card and so on and so forth. Okay. So where just going to put a random number here. Let's suppose that after everything, this number, you know, and I, by the way, like I said, I look at the total number, the total payments, and that, you know, let's suppose that's $280,000 here. And then I'm going to deduct the cash because the cash is going as cash deposit. And I'm going to deduct the gift card redemption and any other kind of payment. And then I'm going to put the, the Toast clearance account would be all only like the credit card payments. Let's say that's $240,000.
So this is going to go to the bank clearance, Toast. And this is it, folks. This is the journal entry that you enter for Toast. So we're going to go ahead and save. Oh, oh, I'm sorry. Keep in mind that this number here has to match everything else. So, well, I'm just going to do an auto calculation and assume that this number is correct. Because I calculated, let's suppose I calculated everything very carefully, and this number needs to match. It needs to match whatever the credit card payments was. So we're going to go ahead and save that. Because remember, my debits and credits need to be the same on a journal entry. It must be the same. So, you know, if I credit something, we need to balance it out on the other side, on another account, on a debit side.
All right. So we save this and we put it for May. And we pull out our profit and loss. We're going to go ahead and go to our profit and loss. And I'm going to do this month. Oh, because. And we're going to put cash. And of course, guys, this is a sample account, but you know, it's showing up. My total sales minus my discount given. And this number here should match what you have on your report, on your Toast report for net sales. Other things you're going to see there is your Toast, your credit card fees, and your sales tax is actually going to show up on your balance sheet. So I'm going to show you that.
So this is the information you see on this side. On your balance sheet, you're going to see your short-term liability. I'm going to do last month. This month, I'm sorry, this month. And change it to cash. And you're going to see that journal entry or that liability that we created for the gift card payable. We have the sales tax payable. There was a prior balance, so it's a little different here. And we have the tips payable because there was a prior balance. Once you make those payments, you're going to make the payments and record it to this liability account so you can clear that liability. Those liabilities here on your balance sheet. That's how it works. Especially like tips. Tips usually you're going to see on your payroll. You're going to see how much tips, or how much of your payroll is tips, and then you're going to put it towards that to cancel out that liability. And that's it.
Okay, so one more thing I wanted to show you. We're going to take a look at the chart of accounts. And I'm going to show you how the Toast bank account works. The Toast clearance account is where we record all the sales, all the sales into the Toast. So we're going to view register, all the sales and all the expenses as well. Now, when you actually receive those sales in the bank account, let's suppose this Toast, all this payments over here is from Toast. So ignore it. Like I said, that says Books by Betsy or whatever, because this is just a sample account. We're going to look at those deposits that doesn't have any match. And by the way, there shouldn't be any match with Toast because we are not integrating it. So this is just a journal entry.
So what I'm going to do anytime I see a deposit from Toast, we are going to record this towards that clearance account. So we're going to edit here. We're going to record as a transfer. And we do this so we don't duplicate the sales because we're already recording the sales into the Toast account. Any money coming from Toast is just a withdrawal from that Toast. So I'm just going to put Toast over here, save it. And here I'm going to record. I'm going to choose the Toast clearance account, which is a bank account where I manually manage all the money in and money out. We're going to apply. And I want to show you what happens. So anytime you see in your bank a transaction coming from Toast, it's not going to go to sales because the sales have been recorded on that journal entry. What we're going to do is, like I said, we're going to record it as a transfer coming from Toast.
Then we're going to go to transactions, chart of accounts. We're going to take a look at the Toast account. I'm going to click on view register so we can see all those withdrawals from the account. So you're going to see the deposit and the withdrawals here as well. Other things that you may be recording here is whatever expense you have coming out of Toast, such as credit card fees and other fees that you may be recording as an expense out of the Toast account. At the end of the day, Toast should zero out because they're depositing the money into your account. They may hold some money for a couple of days. Sometimes they may hold money for a little longer. If that's the case, then you can actually put, record those sales into unrealized or unrealized income, which is an asset account on your balance sheet, and then transfer it back to income once they deposit the money. So that's one thing you can do, but that's a little bit more complex. So you don't have to worry about that.
In reality, what we should see is just a journal entry with all the income and expenses. And then here on the Toast, you're going to see the income, the sales recorded and the expense as the transfer going into your checking account because on your checking account, you don't record a sales. What you record is just a transfer, which is not going to duplicate your income. All right.
Okay, this is it. This is it. I hope that for those of you who use Toast, I hope that this is very useful to you. Oh, by the way, let's go back here. Okay. Okay. All right. So this is really specific information. So if you have a restaurant, you use Toast, yes, you know, or if you know somebody who does, this is very important. This information is very important. Not everybody knows. Not every CPA knows how to deal with those third-party apps. This is a simplified way for you to manage. By the way, you can use this recurring journal entry for all other third-party apps as well, such as Square. So if you don't want to integrate Square, this is how you would do it. But obviously, the Square has a different report and you're going to record different accounts. But that's kind of like, you know, an idea of what you're going to have to do with other third-party apps. Just like I said, you're just going to have different accounts. That's it. But the idea is kind of pretty much the same. So it's your debits, I'm sorry, it's your credits and your debits. And at the end of the day, it's just a simplified way to record all your sales and your liabilities and your expenses from a third-party app.
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I love to go to different restaurants, try different foods, especially those small restaurants that bring their unique culture, their unique food. And I don't want you guys to go. I want you guys to grow. I want you guys to grow, grow, grow, grow, grow because I love to try different things. And I know that, uh, us as Americans, we love to try different food that is unique and made with love and with creativity, not that cookie-cutter restaurant that is traded in the stock market. We want those small ones that bring that food that is good for you and that is delicious. So for this reason, I want you to succeed. Not just that, but I definitely want you to succeed. I will be back next week. And when I come back next week, I wanted to be subscribed. And I'll see you then. Until next time, keep on, keep on smiling.