A Restaurant Chart of Accounts: Food, Assets and ExpensesAs hard as these words are to understand, the concept they all translate to can be even harder to grasp…. But knowing the basics of restaurant accounting can pay dividends in helping you understand your accountant better and manage your money. Whether you hire outside help for your bookkeeping or do it all yourself, these 5 restaurant accounting concepts break down the basics… in plain English. Chart of Accounts is the term your accountant uses to describe the buckets used to categorize the money that flows in and out of your business. Your COGS is the cost of your food and beverage inventory, which directly ties to the profit you make per plate sold. Operating expenses are not the cost of the people on your payroll OR the cost of the ingredients or rent.
Restaurant Accounting Tips
Spend less time on the finances and more time delighting your customers with simple accounting software. Running a hospitality business is demanding. These are just some of the features hospitality businesses love about Xero. Get an instant and up-to-date view of your cash flow with the online dashboard. Learn more. Get paid faster with online invoices — and see when your customers have opened them. Manage your business financials and keep on top of your bills and orders from suppliers.
Knowing the basics of accounting to balance the books is a pre-requisite of running a You may know everything about producing quality food and providing.
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How to Find an Accountant for Your Restaurant
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A cash register can do much of the work for calculating your restaurant's sales revenue. Restaurants survive — or don't — on razor-thin profit margins, so operators of even the smallest restaurants can improve their odds of success by keeping careful accounting records. Good record-keeping can show you where you're doing well and where you aren't, even if you're more at home behind the grill than with a ledger, but you'll need to have an efficient system to record and track that information. That system can be manual or computerized, but either way, a professional's assistance can really smooth your path. Your first accounting decision is how directly you'll be involved.
Because behind every good business is great accounting. You need to know where money is being spent and exactly how much, the sources of your revenue, and how much income is needed in order to turn a profit. The end goal -- more money is coming in than going out — is simple, but getting there is much more complex. Restaurant accounting involves tracking massive amounts of real data as well as industry benchmarks. Because accounting is such a complex, detail-oriented process, you can outsource the job to professionals such as accountants and bookkeepers, and you can automate some of it with accounting software. But even with these resources available, any restaurant operator worth their salt has to first understand the core concepts and key terms involved in accounting.