New restaurants and family-owned food spots are opening up regularly especially among housewives who have found food sales to be a highly accessible and lucrative avenue for income. Taking a glance at the numbers, 93% of respondents in a survey by Forbes report optimism for their financial future. Isn’t it time you had a system for recording your restaurant daily sales? Recording restaurant sales using my ‘daily sales’ method is straightforward and easy to understand.

For example, a small restaurant with just 1-2 chefs may not benefit from a system where food is monitored by waste, simply because it’s too time-consuming. Then, depending on the industry and business itself, there will also be a wide range of other specialized, subcategory accounts. In this case, you may have an account for insurance, equipment, cleaning supplies, food costs, marketing, wages, rent, etc. Each account essentially acts like a “bucket” — allowing you to clearly categorize all of the money that flows in and out of your business. A Chart of Accounts is a comprehensive listing of all financial accounts a business uses to record its transactions.

Revenue (4000s)

Analyzing the relationships between different accounts over time helps to identify trends in financial performance. Analyzing the balances of different accounts allows restaurant owners, managers and investors to calculate various financial ratios and better understand the business’s financial health. Current assets are liquid assets that are either cash or expected to be converted to cash within a year. In the context of bars and restaurants, this is checking accounts, savings accounts, food inventory, bar inventory, accounts receivable, short-term investments, and more. The expenses section is next on our list of essential sections in a restaurant chart of accounts. Cashflow is the combination of your restaurant’s income and expense data and allows you to see how you are procuring cash and where it is going after coming into your possession.

• That allows for more granularity in tracking and analyzing your finances.
• Keeping a watchful eye on the restaurant bookkeeping process is especially important for restaurants because of their slim profit margins.
• Different categories in your restaurant chart of accounts will be coded with four-digit numbers to help quickly identify where subcategories belong.
• This can help you better plan your ingredient inventory and focus your marketing on the products that appear to be selling the best.

The chart of accounts is a simple, quick grouping of all accounts related to your restaurant business. Every one of your restaurant company’s transactions changes the balance of at least two accounts. Your chart how to do bookkeeping for a restaurant of accounts includes your assets, liabilities, revenue, expenses, and equity, as well as various restaurant-specific categories that can give operators and managers an accurate picture of the business.

Creating categories that will increase your overall financial awareness

The cost of goods sold, or COGS, is the cost of acquiring and preparing items for sale. In a restaurant chart of accounts, the COGS section will include the same accounts as the revenue section. More complex businesses will break their revenue accounts up into subaccounts.

However, they also must respect the guidelines set out by the Financial Accounting Standards Board (FASB) and generally accepted accounting principles (GAAP). Warren Averett is a top accounting firm providing audit, tax, accounting and consulting services to companies across the Southeast. Our firm has expertise in industries including manufacturing, construction, real estate, financial services, healthcare, government, education and retail. Although you can later make changes, it is critical that you set up your chart of accounts correctly from the beginning. While you will want to ensure that each category is accounted for, an accountant can help you make your chart of accounts as simple and streamlined as possible. After all, if you try to make your chart of accounts too complex, key pieces of information could be lost.