The Chart Of Accounts Structure
Sep 02, 2020
As we mentioned in the last blog post, the chart of accounts is designed to help organize income and expenses in your accounting software. Your chart of accounts is unique to your own restaurant and can be as detailed as you want. But one note, details are important but QuickBooks allows you to add notes to transactions so don’t clutter up your Chart of Accounts with a long list of subcategories.
To help 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
9000-9999 Other Expenses
Each major category begins with a certain number and then each subcategory within that major category begins with the same number…for example, if assets are classified by numbers starting with a 1, then cash accounts are labeled 1001, accounts receivable labeled 1002, etc.…
The chart of accounts is the “heart” of any restaurant accounting software. It will set you up on the path for success if set up correctly. Understanding what to track and how to track it is as important as actually knowing your data. One of the simple goals for the chart of accounts is to help you understand the performance of your prime costs (food and labor costs). This sets you up to simply monitor these items and their related revenue centers, resulting in the ability to see the restaurant’s performance at a glance and the related fluctuations that need to be addressed.
Need help setting up the Chart of Accounts for your restaurant?
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