Cash flow is the timing of money coming into and going out of your restaurant. You can be profitable on paper and still run short if rent, payroll and a big supplier invoice all land the week before your card sales reach the bank. Square helps by showing what you sold, how guests paid and when funds will be transferred, so you can see the cash side clearly and plan ahead.
This guide explains how cash flow works in a restaurant, which Square reports to watch, and a simple weekly routine to stay ahead of it.
Profit is not the same as cash
Profit is revenue minus expenses over a period. Cash flow is when the money actually moves. In a restaurant, the gap comes from timing:
- Card sales reach your bank after a transfer delay, not at the moment of sale.
- Payroll goes out on a fixed date, often in large amounts.
- Supplier invoices may be due on delivery or on terms such as 15 or 30 days.
- Rent, insurance and loan payments are fixed and due regardless of how busy you were.
- Sales tax collected from guests is not your money, and must be set aside for filing.
- Gift card sales bring cash in now for food you will serve later.
Where to see cash coming in with Square
Sales summary
The sales summary in Square Dashboard shows gross sales, discounts, refunds, net sales, taxes and tips for any period. Compare the same week across months to see whether money coming in is growing or shrinking.
Payment methods
Square's reports also break down how guests paid. Card payments arrive through Square transfers. Cash goes straight into your drawer, which is only useful if it is counted and deposited regularly.
Transfers
In the US, Square's standard transfers reach your bank the next business day for payments taken before Square's daily cutoff, and Friday payments usually post by Monday. Square also offers same day and instant transfers for a fee. Check the current timing and fees in your Square transfer settings, since they vary by country and can change.
Cash drawer reports
If you take cash, Square's cash drawer reports compare expected and actual cash for each drawer session. Gaps here are cash flow leaks.
A simple weekly cash flow routine
- Check last week's net sales in Square and compare them with the same week last month.
- Confirm transfers arrived by matching Square transfers to your bank statement.
- List the next four weeks of bills: payroll dates, rent, supplier invoices, loan payments and any tax deposits.
- Forecast cash in using your recent weekly sales, adjusted for known events, holidays and seasons.
- Find the tight weeks. Where bills exceed expected cash, act now: move an order, ask a supplier for terms or hold off on a purchase.
- Move tax money aside. Transfer the sales tax you collected into a separate account so it is ready when your filing is due.
Example: a coffee shop with a slow January
A cafe owner sees in Square that January net sales usually dip after a strong December. December also brought in gift card sales, but those cards will be redeemed in January for coffee the shop still has to make. Looking ahead, the owner sees payroll, rent and a large bean order all due in the second week of January. They split the bean order in two, ask the roaster for 15 day terms and keep part of December's cash in reserve. January is lean but never short.
Ways to improve cash flow
- Build a cash reserve. Many advisors suggest keeping enough to cover several weeks of fixed costs. Ask your accountant what makes sense for your business.
- Negotiate supplier terms. Paying 15 or 30 days after delivery smooths out the timing gap.
- Order closer to demand. Excess stock is cash sitting on a shelf. See top inventory tips for restaurant owners.
- Lift slow periods. Use your sales data to find quiet hours and run targeted promotions. Read setting up discounts and promotions in Square.
- Sell gift cards and prepaid value. They bring cash in early, especially around holidays, though you still owe the product later.
- Watch your margins. Healthy margins make every week easier. See maximizing your restaurant's profit margins.
Common mistakes
- Treating the bank balance as profit. Part of it is sales tax, tips owed to staff and gift card value you still have to serve.
- Forgetting irregular bills. Annual insurance, license renewals and equipment repairs need to be in the forecast.
- Leaving cash in the drawer. Deposit regularly and reconcile each shift.
- Planning only one week ahead. A four to eight week view gives you time to act.
Cash flow decisions often have tax and financing implications. Work with an accountant or bookkeeper to set up a forecast that fits your business.
Where Orda fits
Predictable sales make cash flow easier to plan. Orda preload cards let customers load money into your branded app up front and spend it on future orders, and push notifications let you bring regulars back during slow weeks. Orda's apps, web ordering and kiosks all run on Square, so app orders land in the same Square reports you use to track cash coming in.