Streamline Your Restaurant Accounting with Oojeema

Oojeema is an easy-to-use, but powerful accounting software and works very well with various types of businesses. Start using Oojeema as your restaurant accounting software now.

Introduction

Running a successful restaurant requires not only delicious food but also efficient financial management. Oojeema, an easy-to-use cloud-based accounting software, simplifies accounting tasks for restaurants of all sizes. This guide walks you through setting up Oojeema for optimal restaurant accounting, including:

Chart of Accounts Customization for Restaurants

• Chart of Accounts Customization for Restaurants: Learn how to tailor your chart of accounts to include specific restaurant expense categories like inventory, payroll taxes, and credit card processing fees.
• Restaurant-Specific Income Statement: Understand the key income statement accounts for restaurants, including food and beverage sales, cost of goods sold (COGS), and credit card processing fees.
• Efficient Sales Recording: Explore how Oojeema’s Billing Module simplifies recording cash, credit card, and digital wallet transactions.
• Inventory Management with Oojeema: Discover how to leverage Oojeema’s Purchase Module and item tracking reports to effectively manage your restaurant’s inventory.
• Effortless COGS Calculation: Learn how to calculate COGS using Oojeema’s Journal Voucher module, ensuring accurate cost tracking.

Effortless Recording of Everyday Restaurant Transactions:

Oojeema simplifies the recording of everyday restaurant transactions like sales, purchases, and expenses. Its user-friendly interface makes daily bookkeeping tasks a breeze.

Managing Complex Transactions with Confidence:

While Oojeema handles most transactions seamlessly, some situations require more in-depth accounting knowledge. These include recording transactions like asset purchases, sales, and depreciation.

Ensuring Accuracy with Expert Guidance:

For these complex transactions, consulting a qualified accountant is highly recommended. Their expertise ensures you make the most accurate and compliant entries in your Oojeema system. This safeguards your financial records and provides valuable insights for informed decision-making.

Chart of Accounts Considerations

You need to make sure the accounts you need are properly set up. Consult your accountant to help you design your chart of accounts not just for compliance but also to help you analyze your business.

Balance Sheet

When setting up your balance sheet, there are three main things to consider:

1. Assets: These are what the restaurant owns, like cash, inventory, equipment, and furniture. You’ll further classify assets into current (convertible to cash within a year) and fixed (long-term use).

2. Liabilities: These are what the restaurant owes, like unpaid bills to vendors, outstanding loans, and accrued expenses. Current liabilities are due within a year, while long-term liabilities are due further out.

3. Equity: This represents the owner’s investment in the business and any retained earnings (profits not paid out as dividends).

Specificity: Use specific account names that clearly reflect what they represent. For example, instead of just “Inventory,” consider “Food Inventory” and “Beverage Inventory” for better tracking.

Industry Considerations: Restaurants have some unique aspects to consider when setting up accounts. Here are some examples:

• Inventory: Account for the cost of goods sold (COGS) to separate the value of food and beverage inventory from its purchase price.
• Prepaid Expenses: Capture prepaid insurance or rent.
• Liquor License: If applicable, this is an intangible asset.

Income Statement

Here are the income statement accounts to consider for a restaurant, including those relevant to credit card and digital wallet payments:

Revenue:

• Food Sales: Records revenue from all food items sold.
• Beverage Sales: Records revenue from all beverage items sold (alcoholic and non-alcoholic).
• Other Sales: Captures income from any additional sources like merchandise or delivery fees.

Cost of Goods Sold (COGS):

• Food Cost: Represents the direct cost of ingredients used in preparing food items.
• Beverage Cost: Represents the direct cost of beverages purchased for sale.

Operating Expenses: 

• Direct Labor: Wages and salaries of kitchen staff, servers, bartenders, and other personnel directly involved in food preparation and service.
• Payroll Taxes: Employer taxes associated with payroll.
• Credit Card Processing Fees: Fees charged by credit card companies for processing transactions. (May be listed as a separate expense or included in “Merchant Fees”)
• Payment Gateway Fees: Fees charged by third-party services for processing digital wallet payments (e.g., Gcash, Maya). (May be listed as a separate expense or included in “Merchant Fees”)
• Merchant Fees: Combines credit card processing and payment gateway fees, if applicable.
• Rent: Cost of leasing the restaurant space.
• Utilities: Electricity, water, gas, etc.
• Marketing and Advertising: Costs associated with promoting the restaurant.
• Repairs and Maintenance: Costs of upkeep for equipment and the facility.
• Supplies: Disposable items like napkins, takeout containers, cleaning supplies, etc.
• Insurance: Coverage for property, liability, etc.
• Other Operating Expenses: Any additional operational costs not listed above.

Other Income and Expenses:

• Interest Income: Earned interest on savings accounts or investments.
• Interest Expense: Interest paid on loans or other liabilities.

Recording Sales using Oojeema

Since restaurant sales are mainly considered sales of service, we use the Billing Module when recording sales.

1. Make sure you have setup the revenue accounts in your chart of accounts.

2. Setup your items using the right revenue accounts.

3. Record sales in the Billing module 

Recording Purchases using Oojeema

You can record your inventory purchases using the Purchase Module by following the instruction in this link

1. Make sure you have setup the inventory accounts in your chart of accounts

2. Setup your items using the right inventory account.

3. Record sales in the Purchase Module 

Keeping Track of Food Cost (Cost of Goods) using Oojeema

Consider scheduling when you do your inventory count to keep track of your beginning inventory, and ending inventory.

Using the Item Tracking Report

Keeping track of your item balances It is important for every business to keep accurate track of inventory balances at any given period. You should always know how much is your beginning and ending inventory. Once you have done your physical count, you can follow the following steps to always keep track of your inventory balances. 

1. Select Reports from the sidebar (refer to Navigating Oojeema)
2. Under the Tracking Reports section, go to Item Tracking You can download the CSV format of the report. 
3. Download a CSV format of the item tracking report. Make sure you select the appropriate date range 
4. Open your CSV file in your favorite spreadsheet 
5. Add a Beginning Balance column, an Ending Balance column, a Usage column, a Cost column, and a Total Cost column
6. In the Beginning Balance column, enter the beginning balance of each item 
7. In the Ending Balance column, enter the formula =[beginning balance]+[Net Quantity]. This will show how much inventory you have for each of your items. 
8. In the Usage Column, enter a formula, Beginning balance + Purchases – Ending Balance, this would give you the total usage of the item
9. Enter the cost of each item in the cost column
10. Multiply the Cost Column with the Usage column and you will get the Total Cost

Recording COGS using Oojeema

1. After calculating the usage costs of each item, you can also group the items and get their total.
2. Record your cogs by creating a journal voucher entry using the Journal Voucher module.

Create a Journal Entry:

 Date and Description:

• Enter the date for which you’re recording the COGS.
• In the “Description” field, write something clear like “Record Food Cost for [Week/Month]“.

Debiting COGS Account:

• Create a new account (if not already present) named “Cost of Goods Sold (COGS)“. This will be a debit account.
• In the first row of the journal entry, debit the “COGS” account with the total calculated food cost for the period.

Crediting Inventory Account:

• Since the restaurant consumes the inventory to generate food cost, credit the appropriate inventory account.
• You can create specific inventory sub-accounts based on your needs (e.g., Food Inventory, Beverage Inventory).
• In the same row, credit the chosen inventory account with the same total food cost amount.

This includes your cash in bank/s, sales, cost of goods, and expense accounts.

If you accept payments through credit card and digital payment facilities like Gcash and Maya, make sure you have those accounts set up as part of your general ledger accounts as well.