Independent restaurant homeowners typically do their very own bookkeeping. Even in the event that they rent a skilled accountant at 12 months's finish, they might save deliberate cash by dealing with the weekly duties themselves.
Setting up a chart of accounts to suit the restaurant wants typically requires customizing the default selections of any accounting program. The choice of gross sales and value of items accounts on most techniques doesn’t present for the separation of meals and beverage classes which might be wanted.
Even the main bookkeeping program for small enterprise, whereas it has a default choice for eating places, fails to supply all of the accounts that almost all restaurant homeowners require. In addition, many of the expense accounts which might be added are hardly ever used, resulting in confusion throughout information entry, and don’t assist with the overview of the enterprise funds.
The National Restaurant Association publishes a guide titled Uniform System of Accounts for Restaurants. The guide offers detailed descriptions of the applying of typically accepted accounting rules to the restaurant business.
That guide contains a pattern chart of accounts, however notes that "the codes used here are not the only method for classifying the accounts". It factors out that almost all eating places is not going to use all of the classes listed, and it additionally notably lacks breakdown of stock and value classes past "food" and "beverage". Many restaurant homeowners need additional separation of these classes to incorporate sub-categories akin to "meat", "seafood", and "produce", and probably "beer" and "wine" for beverage classes.
While many packages don’t require the use of account numbers, the NRA guide states that some kind of account numbering system have to be used. If your program shouldn’t be displaying account numbers, it ought to have an choice on a arrange display to activate that characteristic.
Any account numbering system is mostly grouped in order that accounts of a explicit kind fall inside a particular vary of numbers. For instance, belongings could also be within the 1000 vary, and earnings accounts within the 4000 vary. On techniques with many element accounts, 5 digit numbers could also be used to permit extra sub-categories, however that’s hardly ever wanted for a small restaurant.
Typical quantity ranges which might be utilized by many accounting techniques are as follows:
Asset accounts: 1000-1999
Liability accounts: 2000-2999
Equity accounts: 3000-3999
Revenue accounts: 4000-4999
Cost of items: 5000-5999
"Other" accounts: 8000-9999
Asset accounts embody money, financial institution accounts, stock, and every little thing else that’s owned.
It is widespread to assign the primary account quantity, 1000, to Cash, since they’re normally ordered, inside every group, by liquidity (ease of changing to money).
A separate account ought to be used within the chart of accounts for every checking account maintained for the enterprise. If service provider deposits take a few days to achieve the financial institution, a service provider account can be utilized. Also, if checks are accepted and never processed electronically, an account ought to be created for checks to be deposited.
New accounts are sometimes numbered 10 digits aside, so your first two financial institution accounts might use 1010 and 1020 as account numbers within the chart of accounts. Leaving gaps between the numbers makes it straightforward so as to add one other account later and squeeze it in to the kind order in any place.
The asset accounts may be numbered as such:
- 1000 Cash
- 1010 Primary Bank Account
- 1020 Bank Account # 2
- 1060 Merchant Deposit Account
- 1080 Checks Received
- 1100 Accounts Receivable
- 1200 Food Inventory
- 1210 Meat Inventory
- 1220 Poultry Inventory
- 1230 Seafood Inventory
- 1240 Dairy Inventory
- 1250 Produce Inventory
- 1260 Bakery Inventory
- 1270 Frozen Inventory
- 1280 Grocery Dry & Canned Inventory
- 1320 Beverage Inventory
- 1330 Liquor Inventory
- 1340 Beer Inventory
- 1350 Wine Inventory
- 1360 Merchandise Inventory
- 1380 Bar & Consumable Inventory
- 1400 Prepaid Expenses & Advances
- 1450 Recycle return worth
Assets which have a lifespan of a number of years or extra are known as Long Term Assets. This additionally contains any actual property.
- 1500 Fixed belongings
- 1510 Land & Building
- 1520 Automobile
- 1530 Furniture Fixtures & Equipment
- 1540 Leasehold Improvements
- 1600 Accumulated Depreciation
- 1700 Capitalized Start Up Expenses
- 1800 Security Deposits
Liability accounts contains issues like bank cards and payables to distributors. It additionally contains cash that has been obtained for issues like tax that’s because of the state, suggestions because of the staff, and present playing cards bought however not but redeemed. Real property loans and different main financing is sub-categorized as long-term liabilities.
Liability accounts may be numbered as:
- 2000 Accounts Payable
- 2110 Credit Card
- 2120 Credit Card # 2
- 2130 Credit Card # three
- 2140 Credit Card # four
- 2210 Sales Tax Payable
- 2220 Second Tax Payable
- 2250 Payroll Liabilities
- 2260 Second Payroll Liability
- 2280 Tips held
- 2300 Gift playing cards & certificates
- 2350 Customer Credits
- 2400 Notes Payable
- 2500 Other debt
The homeowners' funding within the firm is represented within the fairness accounts. For a company, this contains the shareholders fairness. It is successfully the cash that the enterprise owes again to the homeowners. When an accounting interval is closed, the stability of the earnings and expense classes is transferred to Retained Earnings, which can also be an fairness account.
The most simple fairness accounts could possibly be numbered:
- 3000 Owner Capital
- 3100 Common Stock
- 3300 Retained Earnings
Sales fall into the final class of earnings accounts. A restaurant will clearly need separate classes for meals and beverage gross sales, and might want additional separation of beer, wine, and liquor gross sales.
Typical earnings accounts are:
- 4000 Sales Revenue
- 4200 Food Sales
- 4320 Beverage Sales
- 4330 Liquor Sales
- 4340 Beer Sales
- 4350 Wine Sales
- 4360 Merchandise Sales
- 4500 Catering & contracts
- 4700 Other Operating Income
- 4900 Discounts
One distinction between the NRA suggestions and lots of different lists includes the location of the "other income" accounts. This can embody earnings from sources akin to cowl costs, video games or merchandising machines, and banquet room rental. Most lists place these accounts within the 8000 vary, above bills, however the NRA record locations them within the 6000 vary.
Most smaller places will solely want a single class for different earnings. Since "cost of goods" is a basic sub-category of bills, it is smart to keep away from inserting an earnings class within the center of the vary from COGS by bills. A single account has been positioned on this record inside the 4000 vary.
Putting the reductions into the income class implies that this shall be a "contra" account. Where most of the gross sales classes may have a credit score stability, reductions will usually have a debit stability.
Cost of Goods Accounts
The Cost of Goods accounts, additionally known as Cost of Sales or Cost of Goods Sold, signify the meals and beverage purchases to supply the meals. Other bills straight associated to gross sales could also be included, akin to service provider charges or consumable cups and napkins.
The numbers used right here additionally present consistency throughout all accounts, because the final three digits of every COGS class is identical because the final three digits on the related stock account.
A value of items record might embody:
- 5000 Cost of Sales
- 5200 Food Cost
- 5210 Meat Cost
- 5220 Poultry Cost
- 5230 Seafood Cost
- 5240 Dairy Cost
- 5250 Produce Cost
- 5260 Bakery Cost
- 5270 Frozen Cost
- 5280 Grocery Dry & Canned Cost
- 5320 Beverage Cost
- 5330 Liquor Cost
- 5340 Beer Cost
- 5350 Wine Cost
- 5360 Merchandise Cost
- 5380 Bar & Consumable Cost
- 5600 Delivery & direct labor Cost
- 5700 Merchant Fees
This instance separates the expense accounts into three major classes: payroll bills and different bills. The payroll bills are grouped within the 6000 vary, with the opposite working bills within the 7000 vary. Overhead like lease, taxes, and amortization are ran into the 8000 vary.
While accounts have to be damaged down a minimum of far sufficient to separate tax traces, combining hardly ever used accounts will make the overview a lot simpler to know. The following record combines a number of classes which might be typically separated on different charts.
You ought to examine together with your accountant or tax preparer to make sure that something you mix does, in truth, share the identical tax line.
The Inventory Loss / Waste account has been slid in beneath the 6000 marker, as some might contemplate it to belong with the Cost of Goods classes.
- 5800 Inventory Loss / Waste
- 6000 Labor associated bills
- 6100 Management Wages
- 6200 Staff Wages
- 6300 Contract Labor
- 6400 Commissions paid
- 6500 Employee Benefits
- 6600 Workers Comp Insurance
- 6700 Employers Payroll Taxes
- 6800 Payroll processing expense
- 7100 Direct Operating Expenses
- 7110 China – Glassware – Flatware
- 7120 Restaurant & Kitchen Supply
- 7130 Cleaning Supply & Expense
- 7140 Decorations & Guest Supply
- 7150 Laundry – Linen – Uniforms
- 7160 Fees – Permits – Licenses
- 7200 Pest – Security – different contract
- 7250 POS – Tech assist – Online serv
- 7300 Marketing
- 7310 Media & Print promoting
- 7320 Promotional occasions
- 7400 Automobile & journey
- 7500 Music and Entertainment
- 7600 Repairs and Maintenance
- 7700 Utilities
- 7750 Telephone & web connection
- 7800 General and Administrative
- 7810 Bad Debts – Over / quick
- 7820 Bank charges
- 7830 Insurance
- 7840 Interest
- 7850 Professional charges
- 7890 Misc. Office expense
- 8100 Rent and Occupancy prices
- 8200 Equipment Rental
- 8600 Sales tax paid on purchases
- 8700 Amortization
- 8900 Other expense
- 9000 Income Tax
The solely remaining objects to account for are the sale of main belongings, different earnings from sources together with restaurant operations (akin to investments or sub-letting area), and a placeholder account for transactions the place the enterprise proprietor wants their accountant's help.
- 9500 Gain / Loss on sale of belongings
- 9900 Other Income (not from operation
- 9999 Ask My Accountant