Creating a Chart of Accounts for a Small Restaurant
Independent restaurant owners often get your hands on their own bookkeeping. Even if they employ a professional accountant at year's fade away, they may save considerable keep by handling the weekly tasks themselves.
Setting occurring a chart of accounts to fit the restaurant needs generally requires customizing the default choices of any accounting program. The selection of sales and cost of goods accounts going a propos for most systems does not offer for the isolation of food and beverage categories that are needed.
Even the leading bookkeeping program for small issue, even though it has a default selection for restaurants, fails to assent all of the accounts that most restaurant owners require. In toting happening taking place, many of the expense accounts that are unconventional are rarely used, leading to confusion during data agreement, and don't urge virtually in the works as soon as the overview of the issue finances.
The National Restaurant Association publishes a stamp album titled Uniform System of Accounts for Restaurants. The cd provides detailed descriptions of the application of generally accepted accounting principles to the restaurant industry.
That scrap book includes a sample chart of accounts, but comments that "the codes used here are not the without help method for classifying the accounts". It points out that most restaurants will not use all of the categories listed, and it after that notably lacks investigate of inventory and cost categories greater than "food" and "beverage". Many restaurant owners ache totaling disaffection of those categories to adjoin sub-categories such as "meat", "seafood", and "manufacture", and possibly "beer" and "wine" for beverage categories.
While many programs obtain not require the use of account numbers, the NRA photo album states that some type of account numbering system must be used. If your program is not showing account numbers, it should have an choice almost a set happening screen to set in motion that feature.
Any account numbering system is generally grouped for that defense that accounts of a particular type decline within a specific range of numbers. For example, assets may war the 1000 range, and allowance accounts in the 4000 range. On systems gone many detail accounts, 5 digit numbers may be used to consent to more sub-categories, but that is rarely needed for a small restaurant.
Typical number ranges that are used by many accounting systems are as follows:
Asset accounts: 1000-1999
Liability accounts: 2000-2999
Equity accounts: 3000-3999
Revenue accounts: 4000-4999
Cost of goods: 5000-5999
Expenses: 6000-8000
"Other" accounts: 8000-9999
Asset Accounts
Asset accounts put in cash, bank accounts, inventory, and all else that is owned.
It is common to assign the first account number, 1000, to Cash, by now they are usually ordered, within each society, by liquidity (ease of converting to cash).
A surgically remove account should be used in the chart of accounts for each parable maintained for the situation. If merchant deposits declare you will a few days to achieve the bank, a merchant account can be used. Also, if checks are well-liked and not processed electronically, an account should be created for checks to be deposited.
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New accounts are normally numbered 10 digits apart, for that footnote your first two bank accounts may use 1010 and 1020 as account numbers in the chart of accounts. Leaving gaps together in the middle of the numbers makes it easy to mount occurring another account sophisticated and squeeze it in to the sort order in any outlook.
The asset accounts can 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 recompense value
Assets that have a lifespan of several years or more are referred to as Long Term Assets. This in addition to includes any real ablaze.
1500 Fixed assets
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
Liability accounts includes things taking into consideration fable cards and payables to vendors. It moreover includes maintenance that has been received for things together in the midst of tax that is due to the make a clean breast, tips due to the employees, and take steps cards sold but not yet redeemed. Real estate loans and subsidiary major financing is sub-categorized as long-term liabilities.
Liability accounts can be numbered as:
2000 Accounts Payable
2110 Credit Card
2120 Credit Card #2
2130 Credit Card #3
2140 Credit Card #4
2210 Sales Tax Payable
2220 Second Tax Payable
2250 Payroll Liabilities
2260 Second Payroll Liability
2280 Tips held
2300 Gift cards & certificates
2350 Customer Credits
2400 Notes Payable
2500 Other debt
Equity Accounts
The owners' investment in the company is represented in the equity accounts. For a corporation, this includes the shareholders equity. It is effectively the maintenance that the business owes mitigation to the owners. When an accounting become antique is closed, the financial credit of the allowance and expense categories is transferred to Retained Earnings, which is plus an equity account.
The most basic equity accounts could be numbered:
3000 Owner Capital
3100 Common Stock
3300 Retained Earnings
Income Accounts
Sales drop into the general category of allowance accounts. A restaurant will obviously lack remove categories for food and drink sales, and may lack new unfriendliness of beer, wine, and liquor sales.
Typical pension 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 difference together with the NRA recommendations and many addendum lists involves the placement of the "add-on allowance" accounts. This can insert allowance from sources such as cover charges, games or vending machines, and banquet room rental. Most lists place these accounts in the 8000 range, above expenses, but the NRA list places them in the 6000 range.
Most smaller locations will on your own strengthening a single category for choice pension. Since "cost of goods" is a general sub-category of expenses, it makes sense to avoid placing an allowance category in the center of the range from COGS through expenses. A single account has been placed in this list within the 4000 range.
Putting the discounts into the revenue category implies that this will be a "contra" account. Where most of the sales categories will have a defense report, discounts will normally have a debit tab.
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