How to Optimize Restaurant Chart of Accounts
Your chart of accounts will help inform your budgeting process by breaking down all of your different expenses into categories, such as inventory, marketing, wages etc. This visibility will tell you, at a glance, where the majority bookkeeping for restaurant of your money is being spent, allowing for more accurate budgeting and forecasting. If your restaurant or bar inventory system integrates with your restaurant accounting (like BinWise Pro does), you can pull COGS at any time.
Too many subaccounts may prevent it from being a useful one-page financial barometer. Equity 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. Common categories here are owner capital, common stock, and retained earnings. Liability accounts consist of money owed to other businesses and the government, like accounts payable, credit card balances, tax withholdings, etc.
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Whether you are a new restaurant or have recently made changes to your business structure, we can help.
- Read this post and access the restaurant daily sales journal entry template.
- To ensure that it is profitable, you could create categories based on your sales and expenses required to run your new cocktail program.
- The expense category is also home to labor cost and, optionally, prime cost.
- If, for example, you have multiple revenue centers (a setup that’s easy to track with software like BinWise Pro), you may want to list them as multiple subaccounts.
- Let’s examine the major sections of the chart of accounts and how they specifically pertain to a restaurant business.
- Here’s where you’ll put all credit cards, credit lines, sales tax, payroll clearing, outstanding gift cards, and more.
- Now that you have a better understanding of the basics of restaurant accounting and what makes this industry’s financials unique, you can take steps toward ensuring your business’s accounting is in order.
Make a habit of tracking in real-time any transactions you make and spend time at the end of each day to document them. While a restaurant might not seem like the most likely place to need an accountant, you might be surprised how much of an asset they can be to your team. If you are even slightly unsure of whether your accounting is being done correctly, it’s time to work with a professional.
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