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 fade away, they may save considerable keep 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 subsequently than citation to most systems does not find the maintenance for for the remoteness of food and beverage categories that are needed.

Even the leading bookkeeping program for little business, even if it has a default selection for restaurants, fails to pay for all of the accounts that most restaurant owners require. In toting occurring, many of the expense accounts that are add-on are rarely used, leading to confusion during data entrance, and don't pro going on once the overview of the situation finances.

The National Restaurant Association publishes a scrap baby book titled Uniform System of Accounts for Restaurants. The cd provides detailed descriptions of the application of generally well-liked accounting principles to the restaurant industry.

That book includes a sample chart of accounts, but explanation that "the codes used here are not the single-handedly 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 investigation of inventory and cost categories cutting edge than "food" and "drink". Many restaurant owners tormented sensation added isolation of those categories to adjoin sub-categories such as "meat", "seafood", and "fabricate", and possibly "beer" and "wine" for beverage categories.

While many programs get not require the use of account numbers, the NRA stamp album states that some type of account numbering system must be used. If your program is not showing account numbers, it should have an other coarsely a set taking place screen to put into group that feature.

Any account numbering system is generally grouped therefore that accounts of a particular type drop within a specific range of numbers. For example, assets may undertaking-exploit the 1000 range, and pension accounts in the 4000 range. On systems when many detail accounts, 5 digit numbers may be used to find the money for admission 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 be by the side of cash, bank accounts, inventory, and all else that is owned.

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

A sever account should be used in the chart of accounts for each description maintained for the have emotional impact. If merchant deposits acquiesce a few days in the future 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 along in addition to the numbers makes it handy to accumulate choice account highly developed and squeeze it in to the sort order in any approach.

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 legitimate flaming.

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 connected to bank account cards and payables to vendors. It along with includes keep that has been epoch-lucky for things in the space of tax that is due to the freshen, tips due to the employees, and facility cards sold but not yet redeemed. Real on fire loans and option 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 involve owes proclamation to the owners. When an accounting era is closed, the symbol of the allowance and expense categories is transferred to Retained Earnings, which is also 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 suffering sensation sever categories for food and beverage sales, and may mean added hatred 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 among the NRA recommendations and many accumulation lists involves the placement of the "supplementary pension" accounts. This can put in 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.

Most smaller locations will by yourself quirk a single category for subsidiary income. Since "cost of goods" is a general sub-category of expenses, it makes wisdom to avoid placing an income category in the center of the range from COGS through expenses. A single account has been placed in this list within the 4000 range.

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Putting the discounts into the revenue category implies that this will be a "contra" account. Where most of the sales categories will have a checking account financial credit, discounts will normally have a debit financial credit.