How do I reconcile Toast POS with my accounting?
Toast deposits net of processing fees, which means the amount hitting your bank account is less than your actual sales. This trips up a lot of restaurant owners because the deposit never matches the sales total on the Toast dashboard.
To reconcile properly, you need to record your gross sales in your accounting software, then record the Toast fees as a separate expense. If you sold $3,200 in a day and Toast deposited $3,104, that $96 difference is processing fees. Recording just the $3,104 as sales understates your revenue and misses the fee expense entirely.
Pull the Toast Payout Report daily or weekly depending on your volume. This report breaks down exactly what’s included in each deposit: credit card sales, any deductions for fees, and timing adjustments. Compare this to your bank statement to confirm the deposit amount matches. When they don’t match, the payout report usually shows why.
Tips require separate tracking. Credit card tips flow through your Toast deposits but they’re not your money. They belong to your employees. Record tips received as a liability, then when you pay them out through payroll, that liability clears. Cash tips never touch your bank account in most cases, so they don’t show up in reconciliation at all.
Gift card redemptions can cause confusion. When a customer pays with a Toast gift card, you collected that money when they bought the card. The redemption isn’t a new sale hitting your bank. Your payout report shows the sale, but no corresponding deposit for that portion. If you’re not tracking gift card liability correctly, your books will be off.
Toast offers integrations with QuickBooks and Xero that can automate some of this. The integration pulls sales data directly into your accounting software. It works reasonably well but isn’t perfect. You still need to review the entries and make sure fees and tips are categorized correctly. Automated doesn’t mean you can ignore it.
For restaurants and bars, reconciling the POS is one of the most important bookkeeping tasks. Your sales are the foundation of your financials. If the POS data doesn’t match your books, nothing downstream is accurate either. Profit margins, food cost percentages, and labor ratios all depend on having correct revenue numbers.
Set up a clearing account for Toast deposits if you want cleaner tracking. Sales and fees hit the clearing account daily, and actual bank deposits clear it out. At any point, the clearing account balance shows you deposits in transit. This approach takes more setup but makes monthly reconciliation much simpler.
If you’re behind on reconciliation or the numbers never seem to match, Phoenix area bookkeeping services can help you get the process dialed in. Once the system is set up correctly and you understand the flow, ongoing reconciliation takes just a few minutes per day.
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