Setting up Xero for Hospitality Businesses

Hospitality accounting relies on "Clearing Accounts." If you don't use them, your bank reconciliation will be a nightmare.

The Clearing Account Method

You should have a "POS Clearing" account in Xero.
1. Your POS sends the Daily Sales Total to this account (Increasing it).
2. Your EFTPOS terminal deposits Cash into your Bank Feed.
3. You allocate that cash to the "POS Clearing" account (Decreasing it).
If it matches perfectly, the balance is $0. If it doesn't, you have missing cash.

Chart of Accounts

Split your sales into "Food," "Beverage," and "Coffee." Split your COGS the same way. This allows you to see if your food costs are high or if it's just the coffee beans.