Everything you Need to Know About Restaurant Accounting

Posted by Amit Gupta on November 29th, 2019

Restaurants remain open for long hours and almost 365 days a year. Throughout the day inflow and outflow of money take place either to take payments from customers or to pay off vendors.  Are you running a restaurant business and experience difficulty in managing the accounts? Well, it may be due to the rush in the restaurant or other activities of your business. But it’s an indication that you need a restaurant accountants London. To hire accountants for your restaurant, there are a few things that you must know. 

The restaurant accountants London  need to know about the local accounting policies and tax rules. He or she must have detail knowledge about preparing cash flow, inventory as well as income statement. The accountants should follow the accounting system properly.

•          Restaurant accountants are responsible to prepare a chart of accounts. They must possess the required knowledge regarding the steps to prepare the chart of accounts. This is the method to classify the money that comes in as revenue and flows out as expenses. This chart will include

Ø Assets

Ø Liabilities

Ø Revenue

Ø Expenses

Chart of accounts is an important part of restaurant accounting. It helps to get all the details about inflow and outflow of cash.

• Another area where you need accountants to help in the restaurant is the cost of goods sold. The cost of goods means total expense made towards making the product here it is the food served. This is the best way to know the actual cost of the product and the price at which it can be offered to get the desired profit.  Cost of goods includes the cost of the ingredients used in making the dish.

• The accountant need to maintain other accounting details related to labour charges paid, expenses made for occupancy, and other operating expenses.

• Prime cost is one of the important accounting terms which you must know. Accountants will be responsibly calculating the cost and take necessary measure to cut the cost to increase profit.

•  Analysing the financial health of the restaurant business is the responsibility of restaurant accountants London. They will be responsible to calculate the cost to sales ratio and suggest the required changes in the operation process to improve the health of the business.

Above are the major vital elements of restaurant accounting which will be taken care of by the restaurant accountant. 

About the Author:

Amit Gupta, Director, Allenby Accountants.

Allenby Accountants is an independent accounting firm, located in Uxbridge, West London. We are accountants, business advisers, offering financial services and helping you to achieve your business ambitions. Our offered range of services include accounting, bookkeeping, tax management, VAT management, tax planning, Inheritance tax, capital gains tax issues, succession planning, etc. We specialise in offering services to sectors like medical & healthcare, retail industry, professional services, property & construction industry, charity and not-for-profit organisations and more.