Are you trying to find the perfect chart of accounts for your restaurant? Well, look no further!
If you have ever been involved with a restaurant in any shape or form, you know that it’s not easy — from human relations to cash flow management, the restaurant business is tough. One of the few businesses that manufacture raw materials and sells them in the same facility, restaurants are truly one of a kind.
Although it takes a lot more than great food and service for a restaurant to be successful, there’s nothing more vital to the establishment’s long-term success than effective bookkeeping and accounting.
Here is where a Chart of Accounts comes into play — an organized system that will help you better understand if your restaurant is profitable, how it makes money, and if you are losing money, and exactly where your dollars went.
Think about the Chart of Accounts as the plate you create the masterpiece of an amazing dish, without the basic blank canvas of the plate (or for this matter the chart of accounts), no matter what you put on top will surely fall to the ground (and similarly your business will fail). As you begin to organize better each account associated with your restaurant, you will gain a greater short- and long-term understanding of your business. In turn, you will become financially aware and build a better business.
Table of Contents
Mise En Place (Everything in Its Place)
For those of you who know anything about the restaurant industry, you understand “Mise En Place” – a French culinary phrase which means “putting in place” or “everything in its place.” A proper Chart of Accounts functions the same way as an organized back off the house restaurant station. Everything has its proper place, everything is located conveniently, and it will add value to your restaurant if set up properly.
Avoid The Preloaded Template, Get Restaurant Specific
Most accounting software comes preloaded with a few different chart of account templates. You will be asked what industry you operate within, and then you will be given a preset chart of accounts. The offerings may have too many accounts and subaccounts; on the other hand, it may have too few. So feel free to use the chart of accounts provided.
This article will give you a complete restaurant chart of accounts and a quick overview to help you understand the basics of your chart of accounts. This is a simple framework that will lead you down the path of generating the best chart of accounts for your business. Let’s be real; at the end of the day, the chart of accounts in QuickBooks is here to serve you.
Restaurant Chart of Account Overview
Below is a quick overview to help you structure your chart of accounts.
1000 – 1999 Assets
2000 – 2999 Liabilities
3000 – 3999 Equity
4000 – 4999 Income or Revenue
5000 – 5999 Cost of Goods Sold
6000 – 7999 Expenses
8000 – 8999 Other Income
8000 – 8999 Other Expenses
Want more information on Chart of Account Categories? I dive deep into each restaurant chart of account category here in the Restaurant Chart of Account Category Deep Dive.
Restaurant Sample Chart of Accounts
Below you will find a detailed chart of accounts. This is a sample specifically for restaurant businesses. Though not always inclusive, this should be informative enough to set you on your way to restaurant accounting success.
|Account Number||Account Name||Account Category|
|1000||Cash On Hand||Bank|
|1010||Bank Account 1||Bank|
|1020||Bank Account 2||Bank|
|1030||Bank Account 3||Bank|
|1100||Accounts Receivable (A/R)||Accounts receivable (A/R)|
|1150||Credit Card Receivable||Other Current Assets|
|1175||House Account||Other Current Assets|
|1200||Inventory||Other Current Assets|
|1210||Inventory: Food Inventory||Other Current Assets|
|1220||Inventory: Beverage Inventory||Other Current Assets|
|1230||Inventory: Bar & Consumable Inventory||Other Current Assets|
|1400||Prepaid Expenses||Other Current Assets|
|1500||Fixed Asset Computers||Fixed Assets|
|1530||Furniture & Fixtures||Fixed Assets|
|1540||Leasehold Improvements||Fixed Assets|
|1600||Accumulated Depreciation||Fixed Assets|
|1700||Capitalized Start Up Expenses||Fixed Assets|
|1800||Security Deposits||Other Assets|
|2000||Accounts Payable (A/P)||Accounts payable (A/P)|
|2110||Credit Card 1||Credit Card|
|2120||Credit Card 2||Credit Card|
|2130||Credit Card 3||Credit Card|
|2210||Sales Tax Expense||Other Current Liabilities|
|2220||Payroll Clearing||Other Current Liabilities|
|2230||Accrued Expenses||Other Current Liabilities|
|2250||Payroll Liabilities||Other Current Liabilities|
|2280||Tips Payable||Other Current Liabilities|
|2300||Gift Cards Outstanding||Other Current Liabilities|
|2400||Notes Payable||Other Current Liabilities|
|3010||Capital Contribution: Member A||Equity|
|3020||Capital Contribution: Member B||Equity|
|3030||Capital Contribution: Member C||Equity|
|3040||Capital Contribution: Member D||Equity|
|4110||Food Sales: Lunch Sales||Income|
|4120||Food Sales: Dinner Sales||Income|
|4130||Food Sales: Food Comps||Income|
|4140||Food Sales: Food Discounts||Income|
|4210||Beverage Sales: N/A Beverage||Income|
|4220||Beverage Sales: Liquor Sales||Income|
|4230||Beverage Sales: Beer Sales||Income|
|4250||Beverage Sales: Wine Sales||Income|
|4260||Beverage Sales :Beverage Comps||Income|
|4270||Beverage Sales: Beverage Discounts||Income|
|4500||Catering & Contracts||Income|
|5100||Food Cost||Cost of Goods Sold|
|5110||Food Cost: Meat Cost||Cost of Goods Sold|
|5120||Food Cost: Poultry Cost||Cost of Goods Sold|
|5130||Food Cost: Seafood Cost||Cost of Goods Sold|
|5140||Food Cost: Dairy Cost||Cost of Goods Sold|
|5150||Food Cost: Produce Cost||Cost of Goods Sold|
|5160||Food Cost: Frozen Cost||Cost of Goods Sold|
|5170||Food Cost: Grocery Cost||Cost of Goods Sold|
|5190||Change in Food Inventory||Cost of Goods Sold|
|5200||Beverage Cost||Cost of Goods Sold|
|5210||Beverage Cost: N/A Beverage Cost||Cost of Goods Sold|
|5220||Beverage Cost: Liquor Cost||Cost of Goods Sold|
|5230||Beverage Cost: Beer Cost||Cost of Goods Sold|
|5240||Beverage Cost: Wine Cost||Cost of Goods Sold|
|5290||Change in Beverage Inventory||Cost of Goods Sold|
|5300||Merchandise Cost||Cost of Goods Sold|
|6010||Payroll Expenses: FOH Wages||Expenses|
|6011||Payroll Expenses: FOH Wages: FOH Management||Expenses|
|6012||Payroll Expenses: FOH Wages: FOH Hourly||Expenses|
|6020||Payroll Expenses: BOH Wages||Expenses|
|6021||Payroll Expenses: BOH Wages: BOH Management||Expenses|
|6022||Payroll Expenses: BOH Wages: BOH Hourly||Expenses|
|6030||Payroll Expenses: Administrative Wages||Expenses|
|6040||Payroll Expenses: Employee Benefits||Expenses|
|6050||Payroll Expenses: Employee Meals||Expenses|
|6060||Payroll Expenses: Workman’s Comp||Expenses|
|6070||Payroll Expenses: Employers Payroll Taxes||Expenses|
|6075||Payroll Expenses: Payroll Processing Fee||Expenses|
|6080||Payroll Expenses: Contract Labor||Expenses|
|6100||Direct Operating Expenses||Expenses|
|6110||Direct Operating Expenses: China – Glassware – Flatware||Expenses|
|6120||Direct Operating Expenses: Restaurant & Kitchen Supply||Expenses|
|6130||Direct Operating Expenses: Cleaning Supply||Expenses|
|6140||Direct Operating Expenses: Decoration & Guest Supply||Expenses|
|6150||Direct Operating Expenses: Linen Services||Expenses|
|6160||Direct Operating Expenses: Permit & License||Expenses|
|6400||Advertising and Promotion||Expenses|
|6700||Meals & Entertainment||Expenses|
|6900||Telephone and Internet||Expenses|
|7000||General and Administrative||Expenses|
|7010||General and Administrative: Bad Debts – Over/Short||Expenses|
|7020||General and Administrative: Bank Fees||Expenses|
|7021||General and Administrative: Bank Fees: Bank Fees – Sub||Expenses|
|7022||General and Administrative: Bank Fees: Merchant Account Fees||Expenses|
|7030||General and Administrative: Insurance Expense||Expenses|
|7100||Legal & Professional Services||Expenses|
|7110||Legal & Professional Services: Accounting & Bookkeeping||Expenses|
|7120||Legal & Professional Services: Consulting Fees||Expenses|
|7130||Legal & Professional Services: Legal Fees||Expenses|
|7200||General and Administrative: Office Expenses||Expenses|
|7210||General and Administrative: Office Expenses: Dues & Subscriptions||Expenses|
|7220||General and Administrative: Office Expenses: Office Supplies||Expenses|
|7310||Facilities: Rent & Lease||Expenses|
|7330||Facilities: Garbage Removal||Expenses|
|7340||Facilities: Pest Control||Expenses|
|7350||Facilities: Repairs and Maintenance||Expenses|
|7500||Sales Tax Expense||Expenses|
|7999||Ask My Accountant||Expenses|
|8100||Interest Earned||Other Income|
|8200||Other Miscellaneous Income||Other Income|
|9000||Taxes and Fees||Other Expense|
The outline above is a great sample chart of accounts and one I have used it for multiple clients. However, I modify the account to fit each client’s specific situation. For instance, maybe you specialize in Eastern cuisine and offer sake instead of wine? Well, you must track that, so you’d replace the wine in 5340 with sake. The same concept can be extrapolated through the rest of the chart of accounts. For example, perhaps you have five bank accounts instead of one: Use the above framework and expand!
Recommended Payroll Configuration
Yes, being a frugal business owner is important—wasteful spending results in income statements that show negative numbers. Most small business owners can agree on that.
However, there is a vast difference between being frugal and being cheap. In the service of frugality, I recommend using a full-service payroll provider like Gusto. Managing weekly payables is challenging enough before worrying about making all the correct weekly, monthly, and quarterly tax payments to the correct departments.
After the first review, the restaurant chart of accounts can be quite overwhelming, but don’t fret! Remember that the goal is to keep the income statement on one page so you can quickly review the financial performance of your business.
There are many different ways to tackle the world of restaurant accounting as well as many ways to set up your chart of accounts. Focus on the key items that work for your business and ensure you are tracking all your essential margins highlighted in the above, like labor, food cost, discounts, and food/beverage comps.
Download the above sample Chart of Accounts in excel by clicking here.