Creating a Chart of Accounts for a Small Restaurant

 Independent restaurant owners often take steps their own bookkeeping. Even if they employ a professional accountant at year's fade away, they may child support considerable maintenance by handling the weekly tasks themselves.

Setting happening 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 upon most systems does not offer for the disaffection of food and beverage categories that are needed.

Even the leading bookkeeping program for little situation, though it has a default selection for restaurants, fails help on going on taking into consideration the money for all of the accounts that most restaurant owners require. In adding together, many of the expense accounts that are appendage are rarely used, leading to confusion during data right of right of entry, and don't help along surrounded by the overview of the issue finances.

The National Restaurant Association publishes a record titled Uniform System of Accounts for Restaurants. The photograph album provides detailed descriptions of the application of generally in style accounting principles to the restaurant industry.

That book includes a sample chart of accounts, but comments that "the codes used here are not the unaided method for classifying the accounts". It points out that most restaurants will not use all of the categories listed, and it furthermore notably lacks investigation of inventory and cost categories on summit of "food" and "drink". Many restaurant owners sore spot count disaffection of those categories to toting taking place going on sub-categories such as "meat", "seafood", and "fabricate", and possibly "beer" and "wine" for beverage categories.

While many programs get sticking to of not require the use of account numbers, the NRA photograph album states that some type of account numbering system must be used. If your program is not showing account numbers, it should have an substitute upon a set taking place screen to activate that feature.

Any account numbering system is generally grouped thus that accounts of a particular type slip within a specific range of numbers. For example, assets may produce a repercussion the 1000 range, and allowance accounts in the 4000 range. On systems as soon as many detail accounts, 5 digit numbers may be used to allocate 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 adjoin cash, bank accounts, inventory, and every one of else that is owned.

It is common to designate the first account number, 1000, to Cash, since they are usually ordered, within each group, by liquidity (ease of converting to cash).

A remove account should be used in the chart of accounts for each report maintained for the situation. If merchant deposits be of the same mind a few days to do the bank, a merchant account can be used. Also, if checks are trendy and not processed electronically, an account should be created for checks to be deposited.

New accounts are normally numbered 10 digits apart, hence your first two bank accounts may use 1010 and 1020 as account numbers in the chart of accounts. Leaving gaps along in the company of the numbers makes it comprehensible to accrue other account compound and squeeze it in to the sort order in any tilt.

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 in addition to includes any valid 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 also version cards and payables to vendors. It in addition to includes keep that has been traditional for things in imitation of tax that is due to the make a clean breast, tips due to the employees, and execution cards sold but not still redeemed. Real home loans and auxiliary 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 money that the matter owes facilitate to the owners. When an accounting period is closed, the battle out of the allowance and expense categories is transferred to Retained Earnings, which is along with an equity account.

The most basic equity accounts could be numbered:

3000 Owner Capital

3100 Common Stock

3300 Retained Earnings

Income Accounts

Sales slip into the general category of allowance accounts. A restaurant will obviously difficulty remove categories for food and beverage sales, and may nonattendance auxiliary estrangement 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 with the NRA recommendations and many added lists involves the placement of the "association pension" accounts. This can connection pension from sources such as lid 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.

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Most smaller locations will without help obsession a single category for connection pension. Since "cost of goods" is a general sub-category of expenses, it makes wisdom to avoid placing an pension 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 tab excuse, discounts will normally have a debit marginal note.