Many small restaurant owners in Canada fail to complete even the first year of their business operations only because they fail to manage their restaurant’s cash flows appropriately. There can be a lot of misappropriations that can only be controlled by implementing an industry-specific accounting solution. Restaurants are not exempted from the need for accurate bookkeeping. The need for an accountant who understands the operations of a restaurant is essential for the overall financial performance of your restaurant business.
Restaurant owners remain in stress due to many factors. One of the major factors is the pressure of handling a huge volume of financial transactions. By downloading the QuickBooks Online App on a mobile phone, you can see the financial progress of your restaurant. In addition to that, you can also view your income streams as well as expense categories that will allow you to understand the financial health of your business to a great extent.
One of the important things for a restaurant is to set up an appropriate chart of accounts that can record all restaurant-related income and expenses effectively. The most common way of listing food items is to add all food-related expenses for the month and make it a single expense. Many small restaurants depend on this approximation technique to handle food expenses. Another way of listing food items is to separate perishable and non-perishable items on different ledgers and then record 02 separate accounting entries for the whole month. We have enlisted some of the major income statement accounts that are common in a restaurant business as follows:
Revenue accounts:
- Beverages Sales
- Food Sales
- Other Sales
Expense accounts:
- Cost of sales
- Cost of sales - Beverages
- Cost of sales - Food
- Cost of sales – Others
- Payroll Expense
- Salaries - Management
- Health Insurance - Management
- Meals and Discounts - Management
- Salaries & Wages - Front of the House
- Health Insurance - Front of the House
- Meals and Discounts - Front of the House
- Salaries & Wages - Back of the House
- Health Insurance - Back of the House
- Meals and Discounts - Back of the House
- Occupancy Expenses
- Rent Expense
- Security Alarm Services
- Insurance Expense
- Repair and Maintenance
- Disposal Services
- Property Taxes
- Utilities
- Janitorial Services
- Other Operational Expenses
- Marketing Expenses
- Licenses and Permits
- Bad Debts
- Credit Card Fees
- Corporate Taxes
- Equipment Lease
- Telephone & Internet
- Restaurant Décor
- Miscellaneous Expenses
- Accounting Fees
- Legal Fees
- Travel Expense
- Office Supplies
- Bank Fees
- Fines and Penalties
- Postage and Mailing
- Interest Expense
- Depreciation Expense
This is the most common list of income statement accounts that every restaurant business needs to start. The above-mentioned chart of accounts needs to be customized to meet the unique needs of your restaurant and this can serve as a starting point for your restaurant business.
In a restaurant business, the frequency of bank deposits and food purchases is high and it is imperative to engage an accountant even before the inception of a restaurant so that every penny you spent on your business must be documented and recorded appropriately. The most common inquiries that GTA Accounting receives from the restaurant clients are related to bookkeeping services, filing of HST returns, and corporate tax planning.
GTA Accounting is a tech-efficient firm that provides a full range of bookkeeping services through QuickBooks Online. We prefer to pull over your business’s financial transactions using cloud-based technology that will enable us to prepare your financials, filing of HST returns, and corporate taxes more efficiently.
GTA Accounting has the expertise that will benefit you in establishing a proper accounting system for your restaurant and will also help you analyze certain operational aspects of the cash flows of your business. GTA Accounting offers the following services to facilitate the smooth operations of a restaurant:
- Customized Chart of Accounts
- Daily Bookkeeping of Bank and Credit Card Accounts
- Bank Reconciliations
- Income Statement
- Balance Sheet
- Analysis of Customized EPOS Reports
- Payroll Preparation
- HST Returns
- Corporate Tax Planning
If you are spending too much time on your business’s bookkeeping and losing important insights of your business or you want to accelerate the pace of your restaurant’s bookkeeping, then I would suggest you contact us at GTA Accounting. There will come a point when you realize that outsourcing the bookkeeping activity will make more sense and you can then focus on more valuable activities of your restaurant.