Gather all ingredients.

Cook bacon in a large skillet over medium-high heat, turning occasionally, until evenly browned, about 10 minutes. Transfer bacon to a paper towel-lined plate and crumble when cool enough to handle. Drain grease from the skillet.

Cook onions and mushrooms in the residual grease in the skillet until onions are translucent and mushrooms are tender, about 5 minutes.

Grease a 9x13-inch casserole dish with 1 tablespoon of butter. Place potatoes into the bottom of the dish; sprinkle with salt, pepper, and garlic salt. Top with crumbled bacon, then add onions and mushrooms.

Whisk milk, eggs, and parsley together in a mixing bowl; pour over casserole and top with Cheddar. Cover and refrigerate, 8 hours to overnight.

When ready to bake, preheat the oven to 400 degrees F (200 degrees C). Bake in the preheated oven until set, about 1 hour.