How Restaurant Operators Handle Accounting and Reporting

Proven accounting processes are an essential building block toward achieving profitability. Timely financial reporting, paying bills on time, and knowing where you stand financially require accounting practices that are efficient and accurate. In this survey, we asked operators to share how they accomplish various accounting-oriented tasks. The results were quite revealing as they showed that operators who adopted good accounting practices were more profitable than those that didn't. Some of the more common accounting best practices include:

Daily recording of sales and receipts Detailed cost-recording of purchase invoices Weekly food and labor cost reporting Counting and computing inventory on a weekly or monthly basis Tracking key inventory item usage on a daily or weekly basis Designating key persons for accounting-oriented tasks Using a POS system for tracking time & attendance Having a Financial Profit & Loss statement at least monthly

Of this list, there were three accounting best practices that were common to profitable operators. 1. Having a Financial Profit & Loss statement at least monthly. 73% of operators that received monthly financial statements reported being profitable. Only 49% of respondents that received just quarterly or annual statements were profitable. 2. Weekly food and labor cost reporting. 75% of operators that received weekly food and labor costs were profitable. Only 60% of respondents that didn't get weekly reports were profitable. 3. Counting and computing inventory on a weekly or monthly basis. 72% of operators that do an inventory at least monthly were profitable. Only 58% of operators that don't compute inventory values are profitable. The bottom-line is that operators that incorporate accounting best practices are more likely to be profitable than those that don't: 75% of operators that incorporate all 3 of these best practices we profitable 70% of operators that incorporated 2 of these best practices were profitable 61% of operators that incorporated only 1 of these best practices were profitable Only 29% of operators that didn't do any of these best practices were profitable! The intent of this survey is to provide our members with helpful insight as to the best way to handle accounting practices by seeing how other restaurants operate. Hopefully, you'll discover some tips and best practices that you can apply to your operation to help you become more profitable. You can view the results and analysis for the following questions: What are Your Monthly Expenditures for Bookkeeping and Accounting Who Handles the Various Accounting Tasks?

What Accounting Software Is Used? How Often are Financial Statements Prepared? Do You Receive Weekly Food Cost or Prime Cost Reports? How Often Do You Prepare a Daily Sales Report? Record Purchases? Take a Physical Inventory? How Do You Track Time & Attendance? How Often Do You Pay Your Employees? How Do You Process Payroll? What are the greatest challenges in getting the financial information you need to manage your restaurant?

Restaurant Seminar Institute "The Gateway to Profitable Restaurant Ownership"

Chart of Accounts for Restaurants This is the default chart of accounts we use for Simple Restaurant Accounting. It includes all the accounts we believe the average restaurant will need, and combines some common accounts that are rarely used by smaller businesses. It has inventory and cost of goods categories broken down by food type, such as meat, dairy, and produce. It also includes multiple bank accounts and credit cards, which help establish the pattern of account numbers. You can also download this list as a csv file for free, and a Quickbooks IIF format is available to download for $3.95.

Account Type Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Asset Long Term Asset Long Term Asset Long Term Asset Long Term Asset Long Term Asset Long Term Asset Long Term Asset Long Term Asset Liability Liability Liability Liability Liability Liability Liability Liability Liability Liability Liability Liability Long term liability Long term liability

Account Number Cash 1000 Primary Bank Account 1010 Bank Account #2 1020 Bank Account #3 1030 Bank Account #4 1040 Merchant Deposit Account 1060 Merchant Deposit Account #2 1070 Checks Received 1080 Accounts Receivable 1100 Food Inventory 1200 Meat Inventory 1210 Poultry Inventory 1220 Seafood Inventory 1230 Dairy Inventory 1240 Produce Inventory 1250 Bakery Inventory 1260 Frozen Inventory 1270 Grocery Dry & Canned Inventory 1280 Beverage Inventory 1320 Liquor Inventory 1330 Beer Inventory 1340 Wine Inventory 1350 Merchandise Inventory 1360 Bar & Consumable Inventory 1380 Prepaid Expenses & Advances 1400 Recycle return value 1450 Fixed assets 1500 Land & Building 1510 Automobile 1520 Furniture Fixtures & Equipment 1530 Leasehold Improvements 1540 Accumulated Depreciation 1600 Capitalized Start Up Expenses 1700 Security Deposits 1800 Accounts Payable 2000 Credit Card 2110 Credit Card #2 2120 Credit Card #3 2130 Credit Card #4 2140 Sales Tax Payable 2210 Second Tax Payable 2220 Payroll Liabilities 2250 Second Payroll Liability 2260 Tips held 2280 Gift cards & certificates 2300 Customer Credits 2350 Notes Payable 2400 Other debt 2500

Account Name

Equity Equity Equity Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Revenue Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Cost of Goods Sold Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses

Owner Capital Common Stock Retained Earnings Sales Revenue Food Sales Beverage Sales Liquor Sales Beer Sales Wine Sales Merchandise Sales Catering & contracts Other Operating Income Discounts Cost of Sales Food Cost Meat Cost Poultry Cost Seafood Cost Dairy Cost Produce Cost Bakery Cost Frozen Cost Grocery Dry & Canned Cost Beverage Cost Liquor Cost Beer Cost Wine Cost Merchandise Cost Bar & Consumable Cost Delivery & direct labor Cost Merchant Fees Inventory Loss/Waste Labor related expenses Management Wages Staff Wages Contract Labor Commissions paid Employee Benefits Workers Comp Insurance Employers Payroll Taxes Payroll processing expense Direct Operating Expenses China Glassware Flatware Restaurant & Kitchen Supply Cleaning Supply & Expense Decorations & Guest Supply Laundry Linen Uniforms Fees Permits Licenses Pest Security other contract

3000 3100 3300 4000 4200 4320 4330 4340 4350 4360 4500 4700 4900 5000 5200 5210 5220 5230 5240 5250 5260 5270 5280 5320 5330 5340 5350 5360 5380 5600 5700 5800 6000 6100 6200 6300 6400 6500 6600 6700 6800 7100 7110 7120 7130 7140 7150 7160 7200

Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Expenses Equity Revenue Expenses

POS Tech support Online serv 7250 Marketing 7300 Media & Print advertising 7310 Promotional events 7320 Automobile & travel 7400 Music and Entertainment 7500 Repairs and Maintenance 7600 Utilities 7700 Telephone & net connection 7750 General and Administrative 7800 Bad Debts Over/short 7810 Bank fees 7820 Insurance 7830 Interest 7840 Professional fees 7850 Misc. Office expense 7890 Rent and Occupancy costs 8100 Equipment Rental 8200 Sales tax paid on purchases 8600 Amortization 8700 Other expense 8900 Income Tax 9000 Gain/Loss on sale of assets 9500 Other Income (not from operation 9900 Ask My Accountant 9999