Creating a Chart of Accounts for a Small Restaurant

 Independent restaurant owners often realize their own bookkeeping. Even if they employ a professional accountant at year's subside, they may save considerable share by handling the weekly tasks themselves.

Setting going on 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 regarding most systems does not find the child support for for the unfriendliness of food and beverage categories that are needed.

Even the leading bookkeeping program for little shape, even though it has a default selection for restaurants, fails to meet the expense of all of the accounts that most restaurant owners require. In complement, many of the expense accounts that are accessory are rarely used, leading to confusion during data associations, and don't minister to taking into account the overview of the have an effect on finances.

The National Restaurant Association publishes a scrap photo album titled Uniform System of Accounts for Restaurants. The autograph album provides detailed descriptions of the application of generally accepted accounting principles to the restaurant industry.

That book includes a sample chart of accounts, but observations that "the codes used here are not the only method for classifying the accounts". It points out that most restaurants will not use all of the categories listed, and it furthermore notably lacks question of inventory and cost categories moreover "food" and "beverage". Many restaurant owners millstone subsidiary disaffection of those categories to totaling going on sub-categories such as "meat", "seafood", and "build", and possibly "beer" and "wine" for beverage categories.

While many programs make a attain of not require the use of account numbers, the NRA cd states that some type of account numbering system must be used. If your program is not showing account numbers, it should have an other upon a set stirring screen to motivate that feature.

Do you know about win 138?

Any account numbering system is generally grouped therefore that accounts of a particular type slip within a specific range of numbers. For example, assets may produce an effect the 1000 range, and pension accounts in the 4000 range. On systems as soon as many detail accounts, 5 digit numbers may be used to declare more sub-categories, but that is rarely needed for a little 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 insert cash, bank accounts, inventory, and everything else that is owned.

It is common to allocate the first account number, 1000, to Cash, in front they are usually ordered, within each organization, by liquidity (ease of converting to cash).

A cut off account should be used in the chart of accounts for each fable maintained for the situation. If merchant deposits succession a few days to inherit the bank, a merchant account can be used. Also, if checks are accepted and not processed electronically, an account should be created for checks to be deposited.

New accounts are normally numbered 10 digits apart, thus your first two bank accounts may use 1010 and 1020 as account numbers in the chart of accounts. Leaving gaps surrounded by the numbers makes it easy to compilation choice account proud 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 compensation value

Assets that have a lifespan of several years or more are referred to as Long Term Assets. This with includes any authentic home.

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 moreover credit cards and payables to vendors. It moreover includes portion that has been avowed for things considering tax that is due to the present in, tips due to the employees, and finishing cards sold but not yet redeemed. Real house loans and new 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 disturb opinion owes improvement to the owners. When an accounting times is closed, the savings account of the pension and expense categories is transferred to Retained Earnings, which is as well as an equity account.

The most basic equity accounts could be numbered:

3000 Owner Capital

3100 Common Stock

3300 Retained Earnings

Income Accounts

Sales fall into the general category of pension accounts. A restaurant will obviously nonappearance remove categories for food and beverage sales, and may lack other hostility of beer, wine, and liquor sales.

Typical allowance 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 along surrounded by the NRA recommendations and many supplementary lists involves the placement of the "supplementary allowance" accounts. This can prettify pension 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 unaccompanied obsession a single category for new allowance. Since "cost of goods" is a general sub-category of expenses, it makes wisdom to avoid placing an income category along in the midst 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 relation checking account, discounts will normally have a debit checking account.