Restaurant accounting differs from the responsibilities of the regular business accounting; so also the needs and expectations from the accountant. Apart from income from patrons, cash flow and inventory, for example, are some of the major areas within restaurant accounting. Restaurants have long working hours and often these may stretch further. The restaurant accountant must remain alert to ensure that all instances of expense and income are recorded, at the very basic of bookkeeping and accounting levels. This would mean keeping track of transactions occurring in the extra time period the restaurant is catering to customers. The work can be grueling, and the accountant needs a sharp eye to accurately record all financial transactions taking place in the restaurant, including in the kitchen.
Accounting work in a restaurant can be very different from that in another business, regardless of the business size.
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Restaurant accountants need to document all transactions within the restaurant; whether it is income coming in from paying customers or expenses due to stock-taking in the kitchen and the supplies store. There are vendors to be paid for produce, restaurant supplies such as crockery, etc.
Typically, accounting cycles in restaurants begin with the customers paying for their food. Regardless of the timings, whether rush hour or not, this payment must be recorded in the books as a financial transaction. If there are different sections such as dine-in, take away, and home deliveries, a restaurant may keep different ledgers for each. Whatever the case, the accountant will need to ensure all records are complete and accurate for the income or expense made by the restaurant per day. These records will finally go into making a complete financial report. Financial reports serve as the strongest indications of the economic health of a restaurant.
Statement of Income
The income statement of a restaurant reflects the earnings in terms of profits and losses. The restaurant accountant will usually maintain this record over a fixed time period such as a week. The income statement documents both, profits and losses through income, inventory and expenses. Weekly income statements work better for restaurants, given the long working hours. Income statements are also important because they can tell, at a glance, how well a restaurant is performing.
Cash flow management
Perhaps one of the most important responsibilities managed by the restaurant accountant. Cash is one of the most important components of restaurant accounting. Daily sales need to be kept track of and money that is spent as expenses too needs to be noted into the books. The accountant will also need to maintain transactions taking place in the stores and the restaurant inventory; in effect, manage cash flow on a daily basis. This could mean keeping track of everyday food used from the store and/or food supplies and produce that has been ordered. Many restaurant accountants find it easier to note down inventory expenses on a weekly basis to determine overall restaurant profits.