How to Set Up a Proper Chart of Accounts in QuickBooks for Your Restaurant

When setting up your QuickBooks Online file for your restaurant, one of the most crucial steps is creating a proper chart of accounts. A well-organized chart of accounts helps you track your financial performance and make informed business decisions. In this article, we'll walk you through the process of modifying an existing chart of accounts in QuickBooks to suit your restaurant's needs.

Modifying the Existing Chart of Accounts

When you first set up your QuickBooks Online file, you're assigned a generic chart of accounts. This chart may not be tailored to your specific business needs. To modify it, start by grouping similar accounts together into categories. In our case, we've grouped our accounts into six main categories: Cost of Goods, Direct Costs, General Administrative Costs, Payroll Costs, Professional Fees, and Occupancy Costs.

Why a Solid Chart of Accounts Matters

A solid chart of accounts is essential for tracking your restaurant's finances effectively. A well-organized chart allows you to compare financial performance between different businesses and identify areas where you can improve. Additionally, it helps you to track significant costs such as point-of-sale subscriptions, delivery software, productivity apps, and other software that are essential for the daily operations of a restaurant.

Why Outdated Charts of Accounts Won't Cut It

Many charts of accounts out there are outdated or overly complicated. These charts may not consider the increasing role of software in the restaurant industry, such as software costs. A default chart of accounts provided by QuickBooks is also not well suited for the complexities of a restaurant.

Tips for Modifying Your Chart of Accounts

To modify your existing chart of accounts, follow these tips:

* Start with an empty chart and create categories based on your business needs.

* Group similar accounts together into sub-accounts.

* Keep your chart of accounts concise, aiming for around 100-125 accounts.

* Review your accounts regularly to ensure they're still relevant.

A proper chart of accounts is crucial for the success of your restaurant's QuickBooks file. By modifying an existing chart or creating a new one from scratch, you can ensure that your financial performance is accurately tracked and reported. With these tips, you'll be well on your way to setting up a solid chart of accounts in QuickBooks for your restaurant.

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