![]() Marketing and promotional expenses fall into this category as well. Operating expense accounts: are all the consumables and recurring expenses required to operate the restaurant, such as cleaning supplies, laundry, uniforms, china, and glassware. Payroll expense accounts: are labor costs, such as wages, tips, benefits, and payroll taxes. Example subtypes include seafood cost, bakery cost, meat cost, etc. All the ingredients and supplies that go into your food and beverages should be listed. Cost of Goods accountsĪlso known as Cost of Goods (COGS) or Cost of Sales (COS), this section of the chart of accounts captures your inventory. These categories should be broken down into as many subtypes as you have distinct sources of income. Income accounts list all your revenue sources, such as food and beverage sales, merchandise sales, and event rental revenue. Common categories here are owner capital, common stock, and retained earnings. Equity accountsĮquity accounts record money the business owes to its investors, whether the ownership group is made of a few individuals or an entire class of shareholders. Liability accounts consist of money owed to other businesses and the government, like accounts payable, credit card balances, tax withholdings, etc. Usually, asset accounts are coded so that 1000 is cash, and then asset subtypes follow by order of liquidity. They are the first major section of the restaurant chart of accounts balance sheets. Asset accountsĪsset accounts capture all the dollar value-holding accounts of the business, such as bank accounts, cash, food and beverage inventory, and accounts receivable. We begin the restaurant’s chart of accounts with the asset accounts. We’ll proceed according to the standard chart coding sequence. Let’s examine the major sections of the chart of accounts and how they specifically pertain to a restaurant business. For instance, if you sell a lot of beverages, you may want to break that down into asset accounts for non-alcoholic beverages, beer, wine, and liquor. You should subdivide your accounts into greater specificity into the areas that matter most to your restaurant. It’s worth noting that you and your accountant have a fair bit of freedom in determining exactly how you structure your restaurant chart of accounts. What to Include in Your Restaurant Chart of AccountĪn example of various accounts you would need to include within your restaurant chart of accounts ta kes this general shape: This sets you up to work with your chef on menu engineering for greater profit. You can then take it a step further and examine your POS system data to see how your menu is performing, dish by dish. A thorough review of your sales by subcategory is a good jumping-off point. Once you have a handle on your costs, it’s time to dive deep into your sales data (asset accounts). The chart of accounts provides a helpful starting point for your investigation. ![]() Detailed knowledge of your COGS and operating expenses is a requisite to stabilizing or reducing your ongoing expenses in these areas. A restaurant’s profitability is often made or lost based on the management of these accounts. Particular attention should be paid to your COGS and Labor Expenses, i.e. ![]() Having a solid grasp of your chart of accounts gives you the information to make operational decisions that are fully informed by financial data. The chart of accounts is a comprehensive method of reviewing these critical performance indicators. Importance of Your Restaurant Chart of AccountsĪs a restaurant operator, it’s critical that you understand your sources of revenue, your expenses, and the balance between the two. Then its subtypes would appear as Bank Account 1 1000, Bank Account 2 1010, Accounts Receivable 1020, and so on and so forth. For example, if all your restaurant assets were coded in the 1000s. The standard is for major types of accounts to be separated by the thousands, and for subtypes to be separated by tens or hundreds. The chart of accounts format is coded numerically by section. By convention, a chart of accounts for restaurants is broken up into sections for (at a minimum) operating revenue, assets, liabilities, operating expenses, and equity, with additional categories that vary by a business’s unique needs. A restaurant chart of accounts (COA) is a structured financial statement, consisting of categorized revenue and expenses.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |