How to set up a Restaurant's Accounting Software

Accounting Software Can Help Manage Revenue, Losses and Inventory

accounting and financial analysis on the desk
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Restaurant owners will need to customize their accounting software's chart of accounts. While every restaurant owner will want need to customize this chart of accounts to meet his or her specific situation, the following is a sample of what to include for the income statement of a restaurant.

Revenues

  • Beverage Sales -- The restaurant's gross sales from beverages are recorded in this revenue account.
  • Food Sales -- The restaurant's gross sales from food are recorded in this revenue account.

Expenses

  • Cost of Sales - Beverages -- The cost of beverage sales are expensed in this account.
  • Cost of Sales - Food -- The cost of beverage food are expensed in this account
  • Discounts -- Meal discounts and comps given to customers are recorded in the discount account.

Occupancy Expenses

  • Rent Expense -- The costs of renting the building are recorded in the rent expense account.
  • Insurance on Building -- The costs of property and casualty insurance are recorded in the insurance on building expense account.
  • Pest Control - The cost of exterminators and other pest control services are recorded in the pest control account.
  • Security/Alarm Services - The costs of any on-site security or the alarm services are recorded in this expense account.
  • Janitorial - The cost of any cleaning service company and janitorial supplies are recorded in this account.
  • Building Repair and Maintenance - The costs of any routine repairs and maintenance will be recorded in this account, with the exceptions of repairs and maintenance expenses that can be capitalized to the fixed asset account because they extended the useful life of the asset.
  • Property Taxes - Any property tax assessments for the land or building are recorded in this account.
  • Utilities - Any water, sewer, or electric utility expenses should be recorded in this account.
  • Disposal Services - The costs of trash removal services are recorded in the disposal services account.

Labor Expenses

  • Officer Wages - Officer salaries and wages are recorded in this account.
  • Officer Benefits: Health Insurance -- Officer health insurance expenses are recorded in this account.
  • Officer Benefits: Meals and Discounts -- Officer meals and discounts are recorded in this account.
  • Officer Benefits: Other--Officer benefits that do not fall into any other category are recorded in this account.
  • Management Wages - Management salaries and wages are recorded in this account.
  • Management Benefits: Health Insurance -- Management health insurance expenses are recorded in this account.
  • Management Benefits: Meals and Discounts -- Management meals and discounts are recorded in this account.
  • Management Benefits: Other--Management benefits that do not fall into any other category are recorded in this account.
  • Employee Wages: Front of the House: Bartender - Bartender salaries and wages are recorded in this account.
  • Employee Wages: Front of the House: Bussers - Busser salaries and wages are recorded in this account.
  • Employee Wages: Front of the House: Host/Hostess - Host/Hostess salaries and wages are recorded in this account.
  • Employee Wages: Front of the House: Servers - Server salaries and wages are recorded in this account.
  • Employee Wages: Back of the house: Chefs - Chef salaries and wages are recorded in this account.
  • Employee Wages: Back of the house: Cooks - Cook salaries and wages are recorded in this account.
  • Employee Wages: Back of the house: Dishwashers -- salaries and wages are recorded in this account.
  • Employee Benefits: Health Insurance -- Employee health insurance expenses are recorded in this account.
  • Employee Benefits: Meals and Discounts -- Employee meals and discounts are recorded in this account.
  • Employee Benefits: Other--Employee benefits that do not fall into any other category are recorded in this account.

    Operating Expenses

    • Bad Debt -- The expense of any customer's walking out or other bad debts are recorded in this account.
    • Cash Over/Short - Any overages or shortages in the cashiers' draws are recorded in this expense.
    • Credit Card Fees - Any merchant fees for credit card or ATM processing are recorded in this account.
    • Liability Insurance - Any general liability insurance for the restaurant's operations are recorded in this insurance expense accounts.
    • Licenses and Permits - The costs of any state, city, or local licenses needed to operate the restaurant are recorded in this expense account.
    • Corporate Taxes -- Any state or federal income tax expense is recorded in the corporate tax expense account.
    • Equipment Repairs and Maintenance - The costs of repairing and maintaining the restaurant's equipment of expensed to this account.
    • Equipment Lease - The cost of leasing any of the restaurants equipment (excluding the building) are recorded in the equipment lease expense account.
    • Glassware, Flatware, and Smallware - The costs of any glasses, cups, bottles, knives, forks spoons, etc., are recorded in this expense account.
    • Marketing Expenses -The costs associated with promoting and marketing the restaurant are recorded in the marketing expense account.
    • Linens, Laundry, and Uniforms - The costs of purchasing employee uniforms, table linens, and cleaning these items are recorded in this expense account.
    • Restaurant Décor - The costs of any small decorative items that are in the restaurant are recorded in the restaurant décor expense account.
    • Menus and Drink Lists - The costs of creating, updating, and producing menus and drink lists are recorded in this expense account.
    • Payroll Services Fees - Any payroll processing fees are recorded in this expense account.
    • Miscellaneous Expenses - Expenses that do not fall into other categories can be recorded in the miscellaneous expense account.
    • Accounting Fees - Accounting and bookkeeping fees can be recorded in this accountant.
    • Legal Fees - Attorney fees can be recorded in the legal fees account.
    • Tax Preparation Fees - Tax preparation fees can be recorded in this account.
    • Music and Entertainment - The cost for providing any live entertainment or music are expensed to this account.
    • Telephone - The costs of telephone services are expensed to this account.
    • Internet - Internet provider fees are expensed to this account.
    • Travel - The costs of any flights or travel-related expenses (excluding meals and entertainment) are recorded in the travel expense account.
    • Office Supplies - The cost of office supplies are expensed to this account.
    • Bank Fees - Bank fee services charges or bounced check fees are expensed to the bank fees account.
    • Fines and Penalties - Any fines and penalties assessed against the restaurant can be expensed to this account.
    • Postage and Mailing - The costs of any postage or shipping expenses are recorded in this account.
    • Interest Expense - The interest expense on any lines of credit, credit cards, or loans are recorded in the interest expense account.
    • Depreciation Expense - The depreciation expense of fixed assets is recorded in this account

    This list for a restaurant highlights the most common income statement accounts that restaurants will need to operate. The chart of accounts will need to be customized to meet the unique needs of your organization, but serves as a starting point. You can find the revenue and expense accounts that most restaurants use in the article "Restaurant Chart of Accounts - Balance Sheet Accounts".