Accounting for restaurants is important because it helps managers and owners understand the financial performance of their business, make informed decisions, and comply with legal and tax requirements. Through accounting, restaurants can track revenue and expenses, monitor cash flow, plan for future growth, and measure the efficiency and profitability of their operations. It also provides financial information that is necessary for obtaining financing and making strategic business decisions.
Accounting for restaurants entails maintaining financial transactions in proper shape. This includes aspects such as sales, purchases, and expenses. Maintaining financial transactions can inform readers how to create financial statements for this respective restaurant.
Financial statements for restaurants involve income statements, balance sheets and cash flow statements. Furthermore, these financial statements include tracking inventory, calculating cost of goods sold, and managing accounts payable and receivable.
Besides that, restaurants need to act in accordance with specific tax regulations and industry-specific accounting principles.
It is vital for restaurants to maintain accurate financial records as a means of not only abiding by laws but also to be able to grow and develop their business going forward.
What Are The Best Accounting Softwares for Restaurants?
There are various choices of accounting softwares that precisely tailor to restaurants’ needs. Options include Restaurant365; AccuPOS Point of Sale; Toast POS; Breadcrumb POS by Upserve; Restaurants Manager POS; TouchBistro and Lavu POS.
These particular software choices contain features that include menu and inventory management, sales tracking, and reporting. Make sure the program caters to your exact needs in order to utilize the most appropriate accounting software option, and evaluate the features and pricing of each restaurant accounting software.
What is a Chart of Accounts for Restaurants?
A chart of accounts for a restaurant can consist of the following:
1. Sales (food sales, beverage sales, etc.)
2. Cost of goods sold (food cost, beverage cost, etc.)
3. Labor (employee wages, benefits, etc.)
4. Occupancy (rent, utilities, etc.)
5. Repairs and Maintenance
6. Marketing and Advertising
9. Miscellaneous Expenses
10. Accounts Receivable
11. Accounts Payable
13. Credit Card and Other Receivables
16. Net Income/Loss
How Are Comps Categorized WhenAccounting for Restaurants?
Complimentary items (more commonly known as “comps”) belong to the category of revenue reductions. For instance, when a restaurant serves a comp (that is to say free of charge) for a meal or beverage the actual cost would then be deducted from the overall revenue for that particular day or period. The purpose of this is to maintain correct financial statements for the restaurants so no legal problems may arise in the future. It is vital to accurately reflect the amount of revenue that was actually earned through sales to paying customers. To keep track of comps, note them down in the general ledger and mark them as a subtraction to the sales account as well as an addition to the cost of goods sold.
What is Inventory Accounting for Restaurants?
Inventory accounting for restaurants involves monitoring and recording food and beverage items whenever they are purchased, used, and sold. Tracking this can determine what is the total cost of goods sold (COGS) as well as how much profit the menu items generate for the restaurant. The inventory is frequently taken in order to make sure that everything (including discrepancies and/or losses) is maintained accurately. The information pertaining to the inventory can also give an analysis of how cheap or expensive the food and drink costs are and even how to better execute purchasing decisions as well as plan menus.
How are Tips Accounted For in Restaurants?
Accounting for tips in restaurants can be done through different techniques.
The most well-known technique is to have servers bring all their cash tips to the manager or designated tip pool administrator once their shift finishes. Then, the tips will be fairly distributed among the servers, bartenders, and bussers.
An alternative technique is to have servers input credit card tips into the point-of-scale system at the time of the transaction. This will make the tracking of tips more accurate and on point. Thus, the restaurant won’t need a top pool administrator going forward.
There are a few restaurants that even utilize something known as a “tip-out” system, where a portion of the tips a server makes are automatically used as a tip to other staff like bussers and bartenders.
Note that it is against the law to pay the minimum wage with the tips generated. In addition, learn of the rules and laws regarding tips and tip pooling in the restaurant’s respective state or country.
Why is Outsourced Accounting for Restaurants a Great Option?
Outsourcing accounting for restaurants is a smart choice because it gives a restaurant the perfect opportunity to properly work on observing its core competencies like food preparation and customer service. At the same time, outsourcing accounting allows the restaurant to have a team of experts catering (there’s a fun restaurant pun for you!) to manage the financial aspects of the business.
Furthermore, outsourced accounting firms tend to have specialized software and skills to assist a restaurant in improving its handling of its finances which involves cost control, budgeting, and tax compliance, for a fraction of the cost of hiring an in-house accountant and without the headache of doing it yourself!. Put simply, outsourcing accounting enhances the time efficiency of a restaurant by allowing it to converse time and money while maximizing profits.
We’re so happy you found this article informative! Head back to our blog page to learn more tips, tricks and guidance on accounting to maximize your business’s growth and development.
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