{"id":31890,"date":"2025-07-24T05:18:33","date_gmt":"2025-07-24T09:18:33","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=31890"},"modified":"2026-01-09T06:34:28","modified_gmt":"2026-01-09T11:34:28","slug":"ultimate-guide-to-restaurant-accounting","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/ultimate-guide-to-restaurant-accounting\/","title":{"rendered":"Restaurant accounting: The essential guide"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tRestaurant accounting: The essential guide\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2025-07-24T05:18:33-04:00\">July 24, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Restaurant accounting: The essential guide\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/ultimate-guide-to-restaurant-accounting\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/joechurchwoods\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2025\/05\/Joe-Yard-2-crop-350x350.jpg\" class=\"entry-author__image\" alt=\"Joe Church Woods\" \/>\t\t\t\t<span class=\"entry-author__name\">Joe Church Woods<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Restaurant accounting is the backbone of managing a successful restaurant. By keeping track of your finances properly, you ensure your business remains profitable, compliant with tax laws, and ready to make smart financial decisions that fuel growth.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This guide will walk you through the essentials of restaurant accounting, from setting up an efficient bookkeeping system to understanding the key financial reports you should review regularly. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whether you\u2019re a restaurant owner or manager, mastering the accounting fundamentals will provide the <a href=\"https:\/\/www.sage.com\/en-us\/blog\/the-winning-recipe-for-restaurant-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">winning recipe to restaurant accounting<\/a>, simplifying your operations and giving you the insights needed to run a more profitable, well-managed hospitality business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Here&#8217;s what we&#8217;ll cover:<\/strong><\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-restaurant-accounting\" data-level=\"2\">What is restaurant accounting?<\/a><\/li><li><a href=\"#h-how-is-restaurant-accounting-different-from-other-industries\" data-level=\"2\">How is restaurant accounting different from other industries?<\/a><\/li><li><a href=\"#h-which-accounting-method-is-best-for-a-restaurant\" data-level=\"2\">Which accounting method is best for a restaurant?<\/a><ul><li><a href=\"#h-1-cash-method\" data-level=\"3\">1. Cash method<\/a><\/li><li><a href=\"#h-2-accrual-method\" data-level=\"3\">2. Accrual method<\/a><\/li><li><a href=\"#h-3-hybrid-approach\" data-level=\"3\">3. Hybrid approach<\/a><\/li><\/ul><\/li><li><a href=\"#h-how-to-set-up-bookkeeping-for-restaurants\" data-level=\"2\">How to set up bookkeeping for restaurants<\/a><ul><li><a href=\"#h-1-set-up-accounting-periods-properly\" data-level=\"3\">1. Set up accounting periods properly<\/a><\/li><li><a href=\"#h-2-create-a-restaurant-chart-of-accounts\" data-level=\"3\">2. Create a restaurant chart of accounts<\/a><\/li><li><a href=\"#h-3-record-daily-sales-and-expenses\" data-level=\"3\">3. Record daily sales and expenses<\/a><\/li><li><a href=\"#h-4-track-inventory-and-cogs\" data-level=\"3\">4. Track inventory and COGS<\/a><\/li><li><a href=\"#h-5-manage-prepaid-accounts\" data-level=\"3\">5. Manage prepaid accounts<\/a><\/li><li><a href=\"#h-6-track-vendor-credits-and-short-pays\" data-level=\"3\">6. Track vendor credits and short pays<\/a><\/li><li><a href=\"#h-7-manage-payroll-and-tips\" data-level=\"3\">7. Manage payroll and tips<\/a><\/li><\/ul><\/li><li><a href=\"#h-which-financial-reports-are-crucial-for-restaurants\" data-level=\"2\">Which financial reports are crucial for restaurants?<\/a><ul><li><a href=\"#h-1-profit-and-loss-p-amp-l-statement\" data-level=\"3\">1. Profit and loss (P&amp;L) statement<\/a><\/li><li><a href=\"#h-2-balance-sheet\" data-level=\"3\">2. Balance sheet<\/a><\/li><li><a href=\"#h-3-cash-flow-statement\" data-level=\"3\">3. Cash flow statement<\/a><\/li><\/ul><\/li><li><a href=\"#h-what-key-metrics-drive-restaurant-profitability\" data-level=\"2\">What key metrics drive restaurant profitability?<\/a><ul><li><a href=\"#h-1-prime-cost\" data-level=\"3\">1. Prime cost<\/a><\/li><li><a href=\"#h-2-food-cost\" data-level=\"3\">2. Food cost<\/a><\/li><li><a href=\"#h-3-cogs-and-cogs-ratio\" data-level=\"3\">3. COGS and COGS ratio<\/a><\/li><li><a href=\"#h-4-labor-cost\" data-level=\"3\">4. Labor cost<\/a><\/li><li><a href=\"#h-5-overhead-rate\" data-level=\"3\">5. Overhead rate<\/a><\/li><li><a href=\"#h-6-earnings-before-interest-taxes-depreciation-and-amortization-ebitda\" data-level=\"3\">6. Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)<\/a><\/li><\/ul><\/li><li><a href=\"#h-how-to-choose-between-in-house-and-outsourced-accounting\" data-level=\"2\">How to choose between in-house and outsourced accounting<\/a><\/li><li><a href=\"#h-tips-to-avoid-common-mistakes-in-restaurant-accounting\" data-level=\"2\">Tips to avoid common mistakes in restaurant accounting<\/a><ul><li><a href=\"#h-1-inconsistent-inventory-tracking\" data-level=\"3\">1. Inconsistent inventory tracking<\/a><\/li><li><a href=\"#h-2-inaccurate-tip-reporting\" data-level=\"3\">2. Inaccurate tip reporting<\/a><\/li><li><a href=\"#h-3-missing-regular-reconciliations\" data-level=\"3\">3. Missing regular reconciliations<\/a><\/li><li><a href=\"#h-4-overlooking-pos-transactions-and-expenses\" data-level=\"3\">4. Overlooking POS transactions and expenses<\/a><\/li><li><a href=\"#h-5-ignoring-third-party-delivery-sales\" data-level=\"3\">5. Ignoring third-party delivery sales<\/a><\/li><\/ul><\/li><li><a href=\"#h-how-software-solutions-simplify-accounting-for-restaurants\" data-level=\"2\">How software solutions simplify accounting for restaurants<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><li><a href=\"#h-faqs-about-restaurant-accounting\" data-level=\"2\">FAQs about restaurant accounting<\/a><ul><li><a href=\"#h-1-how-can-i-handle-seasonal-fluctuations-in-my-restaurant-accounting\" data-level=\"3\">1. How can I handle seasonal fluctuations in my restaurant accounting?<\/a><\/li><li><a href=\"#h-2-what-is-the-best-way-to-manage-accounting-for-multiple-restaurant-locations\" data-level=\"3\">2. What is the best way to manage accounting for multiple restaurant locations?<\/a><\/li><li><a href=\"#h-3-how-do-i-integrate-my-point-of-sale-system-with-my-accounting-software\" data-level=\"3\">3. How do I integrate my point-of-sale system with my accounting software?<\/a><\/li><li><a href=\"#h-4-what-is-the-best-way-to-track-and-account-for-limited-time-promotions\" data-level=\"3\">4. What is the best way to track and account for limited-time promotions?<\/a><\/li><\/ul><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-restaurant-accounting\"><strong>What is restaurant accounting?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Restaurant accounting is the process where you, as a restaurant owner or manager, track, report, and analyze your financial transactions. It ensures your business stays profitable and compliant with industry regulations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accounting for restaurants addresses the unique challenges of the food service industry, such as managing inventory costs, payroll (including tips), and fluctuating food and beverage expenses\u2014all while focusing on profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key components of restaurant accounting include:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Financial tracking: <\/strong>keeping accurate records of all transactions, including sales, expenses, payroll, inventory purchases, and more, to ensure a clear view of your restaurant\u2019s financial health.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reporting:<\/strong> generating financial statements, such as the profit and loss statement, balance sheet, and cash flow statement, which help you understand your restaurant\u2019s performance and profitability.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Analysis:<\/strong> interpreting financial data to identify trends, spot potential issues, and make informed decisions that support growth and cost control.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Compliance:<\/strong> making sure your business meets tax obligations, labor laws (including tip reporting), and industry-specific regulations to avoid penalties and maintain good standing with authorities.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-is-restaurant-accounting-different-from-other-industries\"><strong>How is restaurant accounting different from other industries?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Accounting in the restaurant industry stands out from other industries due to the unique nature of running a food service business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Here are some factors that make it distinct:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Inventory turnover: <\/strong>restaurants handle perishable goods that must be tracked closely and managed efficiently to avoid waste and spoilage.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Payroll complexity: <\/strong>managing payroll is more complicated due to factors like tips, split shifts, overtime, and varying pay rates.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Cost of Goods Sold (COGS): <\/strong>food and beverage costs can change frequently, directly impacting profit margins. A key part of <a href=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-balance-restaurant-costs-and-quality\/\" target=\"_blank\" rel=\"noreferrer noopener\">balancing restaurant costs and quality<\/a> is managing these fluctuations.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Seasonality: <\/strong>revenue can vary significantly depending on the time of year, especially in tourist-heavy or seasonal areas.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>High operating costs: <\/strong>restaurants face substantial overhead costs\u2014such as rent, utilities, and wages\u2014that require careful monitoring and control.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For example, when comparing restaurant and retail accounting, the differences are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Aspect<\/strong>&nbsp;<\/td><td><strong>Restaurant accounting<\/strong>&nbsp;<\/td><td><strong>Retail accounting<\/strong>&nbsp;<\/td><\/tr><tr><td><strong>Inventory tracking<\/strong>&nbsp;<\/td><td>High focus on perishables and COGS&nbsp;<\/td><td>Less frequent and varied inventory&nbsp;<\/td><\/tr><tr><td><strong>Payroll&nbsp;<\/strong>&nbsp;<\/td><td>Tips, hourly, shifts, overtime&nbsp;<\/td><td>Typically, salaried or hourly workers&nbsp;<\/td><\/tr><tr><td><strong>Revenue fluctuations<\/strong>&nbsp;<\/td><td>Highly seasonal and variable&nbsp;<\/td><td>More predictable&nbsp;<\/td><\/tr><tr><td><strong>Cost of Sold Goods (COGS)<\/strong>&nbsp;<\/td><td>Directly tied to food and beverage&nbsp;<\/td><td>Less variation, more product-based&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-which-accounting-method-is-best-for-a-restaurant\"><strong>Which accounting method is best for a restaurant?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Choosing the right accounting method is crucial for managing your finances effectively and <a href=\"https:\/\/www.sage.com\/en-us\/blog\/boosting-restaurant-profitability-in-2025\/\" target=\"_blank\" rel=\"noreferrer noopener\">boosting restaurant profitability<\/a>. The best method for your business depends on factors such as size, complexity, and revenue. Here\u2019s an overview of the three primary methods of accounting for restaurants:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-cash-method\"><strong>1. Cash method<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">With the <a href=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-cash-basis-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">cash method<\/a>, income is recorded when received, and expenses are recorded when paid. This straightforward approach offers a clear view of your cash flow. Smaller restaurants with lower revenue often benefit from this method, as it helps track immediate cash movements.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Advantages:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Simple and easy to track.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ideal for restaurants with low transaction volumes and simpler financials.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Limitations:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Not suitable for larger businesses with significant credit transactions or complex inventory management.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <a href=\"https:\/\/www.irs.gov\/publications\/p538\" target=\"_blank\" rel=\"noreferrer noopener\">IRS limits the use of the cash method<\/a> for businesses with annual gross receipts over $26 million.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-accrual-method\"><strong>2. Accrual method<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/www.sage.com\/en-us\/blog\/accrual-basis-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">accrual method<\/a> records income when it\u2019s earned and expenses when incurred, regardless of when cash changes hands. This method provides a more accurate view of your restaurant\u2019s financial position, especially when dealing with credit sales, managing inventory, or streamlining your <a href=\"https:\/\/www.sage.com\/en-us\/blog\/accounts-receivable-process\/\" target=\"_blank\" rel=\"noreferrer noopener\">accounts receivable process<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Advantages:<\/strong>&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Provides a more accurate financial picture.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It helps track future obligations and payments.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It is ideal for larger restaurants, multi-location operations, and businesses with inventory.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-hybrid-approach\"><strong>3. Hybrid approach<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A hybrid approach combines elements of both <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cash-versus-accrual-accounting-what-is-the-difference\/\" target=\"_blank\" rel=\"noreferrer noopener\">cash and accrual accounting<\/a>. For example, small transactions can be recorded using cash, while larger transactions are tracked using accrual accounting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Advantages<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Offers flexibility to suit the restaurant\u2019s specific needs.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Provides a balanced and comprehensive financial outlook.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Factors to consider when choosing a method<\/strong>:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When selecting the best accounting method for your restaurant, consider the following factors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Restaurant size: <\/strong>the method you choose should align with the scale of your operations. Larger restaurants or chains may require more complex accounting methods.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenue volume:<\/strong> if your restaurant generates significant revenue, you might benefit from the accrual method, which offers a clearer picture of financial health.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Growth plans:<\/strong> if you\u2019re planning to expand, the method you choose should support your long-term growth. As your restaurant grows, you may need to switch from a simple cash method to a more sophisticated accrual or hybrid approach.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tax implications: <\/strong>different methods can affect how and when you pay taxes, so it\u2019s essential to understand the tax implications of your choice to avoid surprises.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-set-up-bookkeeping-for-restaurants\"><strong>How to set up bookkeeping for restaurants<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Setting up an efficient restaurant bookkeeping system is crucial for keeping track of all your financial activities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here\u2019s a step-by-step process:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-set-up-accounting-periods-properly\"><strong>1. Set up accounting periods properly<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Start by defining your accounting periods (monthly, quarterly, or annually) so your financial reporting stays consistent. Regular accounting periods help you compare performance over time, close your books efficiently, and avoid confusion during tax season.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-create-a-restaurant-chart-of-accounts\"><strong>2. Create a restaurant chart of accounts<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A <a href=\"https:\/\/www.sage.com\/en-us\/blog\/chart-of-accounts\/\" target=\"_blank\" rel=\"noreferrer noopener\">chart of accounts<\/a> lists all accounts used in your restaurant\u2019s general ledger. It\u2019s important to tailor this chart to your restaurant&#8217;s unique needs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key categories to include:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenue:<\/strong> sales, tips, catering income.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Expenses:<\/strong> food costs, labor, rent, and utilities.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Assets: <\/strong>equipment, inventory.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Liabilities:<\/strong> loans, credit lines.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Sample chart of accounts:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenue: <\/strong>restaurant sales, catering income.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Costs:<\/strong> food cost, beverage cost, labor cost.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Operating expenses: <\/strong>rent, utilities, advertising.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Liabilities:<\/strong> taxes, loans, payables.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-record-daily-sales-and-expenses\"><strong>3. Record daily sales and expenses<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Tracking sales and expenses daily helps avoid mistakes and keeps you on top of your finances. By digitizing record-keeping using a <a href=\"https:\/\/www.sage.com\/en-us\/blog\/5-reasons-you-should-be-using-a-receipt-app\/\" target=\"_blank\" rel=\"noreferrer noopener\">receipt app<\/a>, you can streamline operations and minimize errors in daily financial entries. Record each transaction, including sales, tips, and costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What to record daily:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Sales: <\/strong>total revenue, taxes, discounts.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Expenses:<\/strong> vendor bills, employee wages, utility costs.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tips:<\/strong> cash and credit tips.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-track-inventory-and-cogs\"><strong>4. Track inventory and COGS<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Accurate tracking is a key component of food and beverage accounting, helping you control food costs and ensuring you\u2019re not overstocking or understocking. Adopting best practices in <a href=\"https:\/\/www.sage.com\/en-us\/blog\/inventory-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">inventory accounting<\/a> allows you to accurately track food and beverage stock, minimizing waste and boosting profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Inventory best practices:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Count inventory regularly.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Track food and beverage costs using inventory tracking software.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Compare theoretical versus actual food cost to identify discrepancies.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula for COGS:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>COGS <\/strong>= Opening inventory + Purchases &#8211; Closing inventory&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-manage-prepaid-accounts\"><strong>5. Manage prepaid accounts<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Prepaid expenses like rent, insurance, or annual software fees must be appropriately recorded and expensed over time. Set up prepaid accounts to make sure your expenses match the periods they benefit from.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-6-track-vendor-credits-and-short-pays\"><strong>6. Track vendor credits and short pays<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Monitor vendor credits and short payments to avoid discrepancies in accounts payable. Properly apply credits and document partial payments to maintain clean records and good supplier relationships.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-7-manage-payroll-and-tips\"><strong>7. Manage payroll and tips<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Restaurant payroll is unique due to tips and hourly wages. It\u2019s essential to track tip distribution and ensure proper tax reporting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Best practices:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Track employee hours accurately.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Follow IRS tip reporting guidelines.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Use payroll software to automate calculations.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-which-financial-reports-are-crucial-for-restaurants\"><strong>Which financial reports are crucial for restaurants?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Regularly reviewing key financial reports is essential for maintaining your restaurant\u2019s financial health. These reports provide valuable insights into your business\u2019s performance and profitability, making them a key part of accounting for restaurant business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here are the most important reports to review:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-profit-and-loss-p-amp-l-statement\"><strong>1. Profit and loss (P&amp;L) statement<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The P&amp;L statement summarizes your restaurant\u2019s revenue, expenses, and profits over a specific period.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key sections:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenue<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cost of Goods Sold (COGS)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Operating expenses<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Monthly reviews are conducted to monitor financial performance and adjust as needed.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-balance-sheet\"><strong>2. Balance sheet<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A <a href=\"https:\/\/www.sage.com\/en-us\/blog\/restaurant-balance-sheet\/\" target=\"_blank\" rel=\"noreferrer noopener\">restaurant balance sheet<\/a> provides a snapshot of your financial position at a specific time, detailing assets, liabilities, and equity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key sections:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Assets: cash, inventory, equipment.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Liabilities: loans, accounts payable.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Equity: owner\u2019s equity.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-cash-flow-statement\"><strong>3. Cash flow statement<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cash-flow-statement-explained\/\" target=\"_blank\" rel=\"noreferrer noopener\">cash flow statement<\/a> tracks the cash coming in and out of your restaurant, helping you understand how well your business is managing its cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key sections:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Operating activities: <\/strong>cash generated from sales.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Investing activities: <\/strong>purchases of equipment or assets.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Financing activities:<\/strong> loans or capital investments.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-key-metrics-drive-restaurant-profitability\"><strong>What key metrics drive restaurant profitability?<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Tracking key financial metrics allows you to identify areas of improvement and make sure your restaurant remains profitable.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Here are the most important metrics to focus on:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-prime-cost\"><strong>1. Prime cost<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Prime cost is the total of your food and labor costs, making it a critical indicator of profitability. By exploring <a href=\"https:\/\/www.sage.com\/en-us\/blog\/off-premises-dining-strategies\/\" target=\"_blank\" rel=\"noreferrer noopener\">off-premises dining strategies<\/a>, such as takeout or delivery, you can potentially lower your prime cost by adjusting labor needs and overhead requirements, as these models often require fewer staff and lower on-site costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong>&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Prime cost = food cost + labor cost&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: 60-65% of revenue.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-food-cost\"><strong>2. Food cost<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Food cost percentage is vital for managing waste and controlling profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Food cost = food purchases\/food sales<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: 28-35% of revenue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-cogs-and-cogs-ratio\"><strong>3. COGS and COGS ratio<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">COGS represents the total cost of producing the food and drinks you sell. Monitoring your COGS ratio (the percentage of sales spent on goods) helps to make sure your pricing and portioning strategy are aligned with profitability goals.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula for COGS:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">COGS = opening inventory + purchases \u2013 closing inventory<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula for COGS ratio:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">COGS ratio = COGS \/ total sales<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range for COGS ratio: 25\u201335%, depending on your restaurant type.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-labor-cost\"><strong>4. Labor cost<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Labor costs are among restaurants&#8217; largest expenses. Controlling them is key to maintaining profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Labor cost = labor expense\/total sales<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: 25-30% revenue.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-overhead-rate\"><strong>5. Overhead rate<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Overhead rate measures the fixed costs required to operate your restaurant (like rent, utilities, and insurance) relative to sales. Monitoring this rate helps you keep non-variable expenses under control.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Overhead rate = total overhead expenses \/ total sales<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: varies, but typically 15\u201320% for well-managed operations<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-6-earnings-before-interest-taxes-depreciation-and-amortization-ebitda\"><strong>6. Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA)<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">EBITDA is a key indicator of your restaurant\u2019s operating performance and financial health. It shows how profitable your business is before accounting for external financial factors and non-cash expenses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">EBITDA = net income + interest + taxes + depreciation + amortization<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: 10\u201320% of revenue, depending on concept and size<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>7. Net profit margin<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net profit margin measures your restaurant\u2019s profitability after all expenses have been accounted for.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Formula:<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net profit margin = net profit\/revenue<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Target range: 5-10%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-choose-between-in-house-and-outsourced-accounting\"><strong>How to choose between in-house and outsourced accounting<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Choosing between in-house and outsourced accounting depends on several factors specific to your restaurant\u2019s needs. Key factors to consider include your restaurant\u2019s size, the complexity of your financial needs, and your available budget and resources.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Here\u2019s a quick overview of the pros and cons of each method:<\/strong>&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Method<\/strong>&nbsp;<\/td><td><strong>In-house<\/strong>&nbsp;<\/td><td><strong>Outsourced<\/strong>&nbsp;<\/td><\/tr><tr><td><strong>Pros<\/strong>&nbsp;<\/td><td>Greater control, direct oversight&nbsp;<\/td><td>Expertise, saves time, cost-effective&nbsp;<\/td><\/tr><tr><td><strong>Cons<\/strong>&nbsp;<\/td><td>High overhead, more training required&nbsp;<\/td><td>Less control, potential communication issues&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-tips-to-avoid-common-mistakes-in-restaurant-accounting\"><strong>Tips to avoid common mistakes in restaurant accounting<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Avoid these common accounting mistakes to keep your restaurant\u2019s finances in check:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-inconsistent-inventory-tracking\"><strong>1. Inconsistent inventory tracking<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Inconsistent inventory tracking can lead to inaccurate food cost calculations. Using industry-specific accounting software automates tracking to ensure precision.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-inaccurate-tip-reporting\"><strong>2. Inaccurate tip reporting<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Failing to report tips accurately can result in legal issues. Make sure to follow IRS guidelines and track tips systematically.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-missing-regular-reconciliations\"><strong>3. Missing regular reconciliations<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Skipping regular reconciliations can create financial discrepancies. Regular <a href=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-account-reconciliation\/\" target=\"_blank\" rel=\"noreferrer noopener\">account reconciliation<\/a> ensures that your balance sheets match real-world transactions. Set a schedule for weekly or monthly reconciliations to maintain accuracy and keep your financial records in check.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-overlooking-pos-transactions-and-expenses\"><strong>4. Overlooking POS transactions and expenses<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Failing to record Point-of-Sale (POS) transactions and associated fees properly can distort your sales, expenses, and overall financial reporting. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Common mistakes include not separating sales tax and tips from gross sales, failing to break out discounts and comps, and incorrectly including gift card sales as revenue when sold rather than redeemed. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To avoid these issues, make sure your POS system integrates seamlessly with your accounting software. Regularly review transaction summaries, service fees, chargebacks, and reporting categories to ensure accurate data flows into your P&amp;L report.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-5-ignoring-third-party-delivery-sales\"><strong>5. Ignoring third-party delivery sales<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Failing to track third-party delivery sales (like Uber Eats, DoorDash, or Grubhub) accurately can lead to underreported revenue and missing fees. Record these sales separately, including commissions and service fees, to make sure your books reflect true profitability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-software-solutions-simplify-accounting-for-restaurants\"><strong>How software solutions simplify accounting for restaurants<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Restaurant accounting software streamlines essential tasks such as payroll management, inventory tracking, and financial reporting. By automating these processes, the right software helps you save time, reduce errors, and improve overall efficiency.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key features to look for include:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Automatic tax calculation: <\/strong>ensures accurate tax filing and compliance with minimal effort.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Integration with POS systems:<\/strong> seamlessly connects your point-of-sale data with accounting software, reducing manual data entry and enabling real-time sales tracking. Integrating with other tools creates a cohesive system that syncs all your data, streamlining operations.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Cloud-based solution: <\/strong>provides easy access to your financial data from anywhere, ensuring it\u2019s always up to date. Cloud solutions also offer scalability, allowing you to adapt as your restaurant grows.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Ease of use: <\/strong>offers an intuitive interface that\u2019s simple for you and your team to learn and operate\u2014ideal for small business owners without dedicated accounting staff. Reduces training time and encourages consistent, accurate use across your restaurant.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\"><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding the fundamentals of restaurant accounting enables you to make smarter financial decisions, increase profitability, and position your business for long-term success. With the right tools, you can streamline financial processes, reduce manual work, and gain valuable insights into your restaurant\u2019s performance\u2014all while delivering an outstanding dining experience to your customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ready to simplify your financial management? Explore our <a href=\"https:\/\/www.sage.com\/en-us\/industry\/hospitality\/restaurants\/\" target=\"_blank\" rel=\"noreferrer noopener\">restaurant accounting and management software<\/a>, designed to help you track costs, automate payroll, and make data-driven decisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-faqs-about-restaurant-accounting\"><strong>FAQs about restaurant accounting<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-how-can-i-handle-seasonal-fluctuations-in-my-restaurant-accounting\"><strong>1. How can I handle seasonal fluctuations in my restaurant accounting?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Adjust your budgeting, cash flow management, and labor planning to account for seasonal changes in revenue and demand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-what-is-the-best-way-to-manage-accounting-for-multiple-restaurant-locations\"><strong>2. What is the best way to manage accounting for multiple restaurant locations?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The best approach for restaurant franchises is to use centralized accounting, which ensures consistency across all locations. For example, a <a href=\"https:\/\/www.sage.com\/en-us\/blog\/starcorp-a-fast-food-franchisee-sizzles-up-fast-financials\/\" target=\"_blank\" rel=\"noreferrer noopener\">fast-food franchisee<\/a> can eliminate the headache of managing multiple sets of books by adopting a more advanced, centralized accounting system. Alternatively, you can choose decentralized accounting if you prefer more autonomy for each location, while still maintaining standardized financial tracking and reporting procedures.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-how-do-i-integrate-my-point-of-sale-system-with-my-accounting-software\"><strong>3. How do I integrate my point-of-sale system with my accounting software?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Integrate your POS system with accounting software through direct API connections, middleware, or manual data transfer, depending on your system setup and preferences.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-what-is-the-best-way-to-track-and-account-for-limited-time-promotions\"><strong>4. What is the best way to track and account for limited-time promotions?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Set up dedicated tracking codes or accounts to monitor the financial impact of limited-time promotions and ensure they\u2019re properly accounted for in your financial reports.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/accounting-101\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting 101\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-29452 post type-post status-publish format-standard has-post-thumbnail hentry category-accountants category-money-matters category-strategy-legal-operations category-trends-insights tag-accounting-101 tag-automation tag-cash-flow tag-small-business business_type-small-business business_type-accountants card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1215\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1327235816-1215x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1327235816-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1327235816-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1327235816-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T09:38:19-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">10 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/accounts-payable-asset-or-liability\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tIs accounts payable an asset or a liability?\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tIs accounts payable an asset or a liability? Accounts payable is a current liability because it represents money your business owes to suppliers. Learn where it appears on the balance sheet and why this classification matters.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-27920 post type-post status-publish format-standard has-post-thumbnail hentry category-accountants category-money-matters tag-accountants tag-accounting-101 tag-cash-flow tag-cfo business_type-accountants business_type-growing-business industry-nonprofit\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-a-trial-balance\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1451456915-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1451456915-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1451456915-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1451456915-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T09:13:03-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">9 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is a trial balance?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-29572 post type-post status-publish format-standard has-post-thumbnail hentry category-accountants category-money-matters category-strategy-legal-operations tag-accountants tag-accounting-101 tag-business-intelligence tag-compliance tag-grow-your-accounting-practice business_type-small-business business_type-accountants business_type-growing-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/franchise-accounting\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-530281091-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-530281091-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-530281091-768x432.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-530281091-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T08:58:34-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">10 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tFranchise accounting: An in-depth guide\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-27796 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-accounting-101 tag-cash-flow tag-cfo tag-sage-accounting business_type-small-business business_type-growing-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/accrual-basis-accounting\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0581-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0581-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0581-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0581-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T08:57:24-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">15 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tAccrual basis accounting: What it is, benefits, and examples\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-23456 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-accounting-101 tag-boss-your-business tag-small-business tag-staying-competitive business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/how-to-write-an-invoice\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-642394299-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-642394299-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-642394299-768x432.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-642394299-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-31T07:18:42-04:00\">July 31, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">15 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tHow to write an invoice and what to include\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Are you a restaurant owner or manager looking to simplify your finances? Learn how mastering restaurant accounting and choosing the right tools can take your business to the next level.<\/p>\n","protected":false},"author":1847,"featured_media":20151,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[43],"tags":[110],"business_type":[40,41],"lilypad":[],"context":[],"industry":[452],"persona":[],"imagine_tag":[],"coauthors":[592],"class_list":["post-31890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","business_type-small-business","business_type-growing-business","industry-hospitality"],"sage_meta":{"region":"en-us","author_name":"Joe Church Woods","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1162911786.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/31890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1847"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=31890"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/31890\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/20151"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=31890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=31890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=31890"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=31890"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=31890"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=31890"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=31890"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=31890"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=31890"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=31890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}