Key Expenses to Manage With Food Truck Bookkeeping

You should evaluate the true cost of each dish at least once a month if not once a week. The golden rule in merchant processing is to make sure it integrates with your POS system. If you get roped into some external merchant processing device (that doesn’t work with your POS system) you are losing money no matter what the rate is.

In a massachusetts state income tax chart of accounts, the COGS section will include the same accounts as the revenue section. That way you can eyeball the COGS and revenue for specific item types. Bar and restaurant equity accounts are based on how your business is legally structured.

Food Truck Business Kit – Sign up for my 20 page guide that explains what you’ll need to get started. Download this spreadsheet and plug-in your own numbers to get an overall estimate of what it will cost to get the business up and rolling. Regardless of which file you import, you can modify the sub account assignments after importing to suit your preferences.

If done properly it can actually be a tool that you can use to run an incredibly profitable food truck. A properly designed bookkeeping system can be efficient and easy to maintain once set up. You should be analyzing the reports that your bookkeeping system produces. A 3rd party payroll provider will handle all of your payroll tax filings, W-2’s, direct deposits, etc and they will do it extremely cheap. If a payroll tax filing is late or incorrect that is your payroll providers problem, not yours.

Managing weekly payables is challenging enough before worrying about making all the correct weekly, monthly, and quarterly tax payments to the correct departments. However, there is a vast difference between being frugal and being cheap. In the service of frugality, I recommend using a full-service payroll provider like Gusto. One of the few businesses that manufacture raw materials and sells them in the same facility, restaurants are truly one of a kind. Based on a rough profit margin of 33% profit-margin based on sales would be $1,650. Conduct your own back of the napkin analysis to estimate whether or not you’ll be able to cover your monthly expenditures.

Expense accounts

Along with his work here at Restaurant Accounting, Zachary has been featured in Business News Daily, Readers Digest, Apartment Therapy, and Yahoo Finance. He enjoys helping restaurants better understand their finances and accounting. Yes, being a frugal business owner is important—wasteful spending results in income statements that show negative numbers. If you liked this story, sign up for our newsletter that includes our food business startup kit and most popular interviews sent straight to your inbox. This is a case study with Anthony Salvagno that takes you through the full-process of starting a food truck in real time.

Loans should be tracked separately as a liability, short-term for less than a year, and long-term for more than a year. And that’s very useful when compared to the incoming money in the revenue section. You’ll see at a glance all your recurring expenses and where you can cut spending or try renegotiating a contract.

Some ingredients will be absolutely necessary and so will certain vendors. You might want to look into the regulations you have to comply with locally by looking into the permit to operate a food truck. There may be other large expenses you have not thought about such as a fire suppression system. Personally, the best POS system I have seen for food trucks is Square.

A breakdown of the main account types

Most food truck operations do not have in-house staff of accountants available to do their accounting leg-work. Because of this many use computer programs to help record their financial information. The best software includes a Point of Sale system, financial software, and the software to integrate the two.

Let’s dive into some key expenses to manage as a food truck owner. Though, ultimately, the power of the restaurant chart of accounts is in its brevity. Too many subaccounts may prevent it from being a useful one-page financial barometer. More complex businesses will break their revenue accounts up into subaccounts. If, for example, you have multiple revenue centers (a setup that’s easy to track with software like BinWise Pro), you may want to list them as multiple subaccounts. That allows for more granularity in tracking and analyzing your finances.

Assign account numbers to business accounts

A platform like BinWise Pro puts real-time inventory, sales, and purchasing data at your fingertips. It allows you to gather, in seconds, valuable data for a restaurant chart of accounts. It gives you great insight into the restaurant KPI that drive your profits. Then they itemize it in the correct section—choosing to create subaccounts if further specificity for recording is needed. An organized restaurant environment starts with restaurant and bar inventory software like BinWise Pro.

This includes all your accounts payable to suppliers, along with company credit cards, taxes owed, and more. Your food truck must periodically report sales and payroll amounts to various state, local and federal governments, and pay taxes on these amounts. Food truck sales are classified as retail sales, which are subject to local and state sales taxes in most states.

Additionally, they should be able to make recommendations on the accounting system design to take advantage of technology to automate much of the process. And once you have their email address, now you’re able to market to customers who have already bought your food. Mobile ordering and processing has become part of the norm through the pandemic. So many restaurants have adapted to this technology, and there are more than one benefit of the use of this system. One of the best ways to increase your revenue is to retain the customers that you’ve already served.

• All you are doing is causing you or your accountant a ton of work that costs money.
• Soon you may even feel equipped to tackle your own business’s accounting .
• You may learn some things that you were not aware of that can save you a lot of headaches, time, and money.
• Expense accounts allow you to keep track of money that you no longer have.
• Most accounting software comes preloaded with a few different chart of account templates.
• Conduct your own back of the napkin analysis to estimate whether or not you’ll be able to cover your monthly expenditures.

Want to invest some money into a certain marketing activity? Add that to your forecast along with the impact you expect it to have on your sales and bottom line. Then measure your actual performance against expectations to see if you are satisfied with the return on investment. But I highly recommend QBO Plus because of the ability to create budgets (I’ll discuss this more later). They will know the various POS system and how to integrate them with QuickBooks Online.

All of the time wasted in handling money, going to the bank, etc is easily offset by a simple merchant fee. Additionally, you will earn more customers with electronic payments. If I were a food truck owner I would only accept credit cards…period. Do not use personal bank accounts and credit cards unless absolutely necessary. All you are doing is causing you or your accountant a ton of work that costs money.

Organizational Chart & Structure for a Food Truck Business

These advantages are true, but that doesn’t mean there won’t be overhead as I’ve demonstrated below. After you determine how to fund your business, I also suggest figuring out how many meals you’ll need to sell per month to cover the ongoing expenses and loan payments. Here’s a simple way to think about how much revenue you’ll need to make to cover your expenses. Comparing your “Current Assets” minus “Current Liabilities” on an annual basis will show you your food truck’s annual growth and expenses, which may need to be improved.

You should always consider your inventory as cash in a different form, and count it consistently and thoroughly. Like many other business owners, food truck owners can get stuck in the weeds in the business. Head down in way too many minor details to see the big picture. The reality is that you have to find the time to focus on your bookkeeping and profitability or you will find yourself either broke or burnt out. And a big part of that process is using reliable bar inventory management software.

These costs will differ depending on where you live and plan to operate the business. Here are some items to understand when trying to figure out how much it will cost to open your business. There is a lot more to your food truck balance sheet, but for this article. This basic explanation is to help food truck owners who no nothing about balance sheets and want to learn a bit more about them.

We highly recommend them to entrepreneurs and small business owners looking for targeted evaluation and feedback. You can rest assured that we will work closely with you to create actionable business plans and accurate financial reporting. We offer our toolkit of financial intelligence that will be your greatest asset for business growth. However, make sure to look at a profit and loss that lists each line item as a percentage of income. This is a simple report to produce in QuickBooks Online and it can be very powerful.

• If, for example, you have multiple revenue centers (a setup that’s easy to track with software like BinWise Pro), you may want to list them as multiple subaccounts.
• If you intend to stay small then stick with this method.
• Everything has its proper place, everything is located conveniently, and it will add value to your restaurant if set up properly.
• With either of these options, you don’t get an engine so that really cuts down the total cost.
• A balance sheet is how you can make sure that all your financial records are in check.

In the second file, the inventory and expense accounts use sub accounts, so things like “Meat Inventory” and “Produce Inventory” are sub accounts of “Food Inventory” . A balance sheet is how you can make sure that all your financial records are in check. There are essentially 3 accounting categories used to keep track of your food truck finances. You will need to provide your food truck balance sheet when applying for loans or grants, submitting taxes, or seeking investors.