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However, the money will actually get collected in October (reflected in your CFS statement of October). It shows how much your restaurant owes, how much it owns, and how much equity you have in your business. Equity represents the owner’s investment in the restaurant – any money put into the business, plus any profits that have been reinvested. Elana Kroon used to work in restaurants before becoming a journalist and expert restaurant industry content creator at Eat App. If the cash payments are greater than the cash receipts, then there is a negative cash flow or a cash outflow, which means that your restaurant has spent more cash than it has earned.

As with his hosing out the stable of mutual fund practices, Spitzer’s drive against the insurance brokers has to do with the potential for abuse of client trust. The brokers have worked their way into the depths of their clients’ insurance requirements on the basis of superior industry expertise. Thoroughly review the General Ledger Register to see all activity in each GL for the period. You can use this to quickly see if there are any vendors or expenses miscoded, or if any large expenses need to be capitalized versus expensed, etc. Another way to review activity on your Balance Sheet is to simply drill down into the values to produce a trial balance. This also shows you the activity for that period so you can quickly verify proper recording.

Do you need a profit and loss statement and a balance sheet?

With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there’s continuity from sales to services to support. To make the concept of a restaurant balance a little easier to understand, let’s walk through a simple example. Use this customizable restaurant P&L template for Excel to analyze your operations, budget, and growth.

You can receive the cash up front when you sell the gift card and only incur the food cost and labor cost when the gift card is redeemed (if it is redeemed at all). Gift cards create a bit of a complication with your restaurant accounting though! The dollar amount of any unused gift cards should be tracked and recorded as a liability on your balance sheet. Another key metric recorded in your cash flow statement is your debt and financing, as taking on debt or financing assets will change cash flow.

What is a restaurant balance sheet?

By now, we hope you’re familiar with what assets, liabilities, and equity are. According to the formula/equation above, equity is what’s left to you after subtracting liabilities from assets. This single sheet gives you insight into your restaurant’s financial health, guidance on how to increase revenue, and bookkeeping for restaurant insight into your restaurant profit margin, the most important restaurant KPI. A statement of cash flow provides a summary of 3 types of cash flow movements during a specific period. If so, consider using the Restaurant Financial model which comes with our ready-made Restaurant business plan template.

This cash is used for daily business expenses, such as paying employees, buying supplies, and covering unexpected costs. After you’ve input all your assets and liabilities, the balance sheet template will help you subtract your total assets from your total liabilities. Of course, this number is simply a static snapshot of your restaurant’s current financial status. You’ll want to update this free balance sheet template in Excel or Google Sheets regularly to monitor the financial health of your business. A restaurant balance sheet is a key financial statement that lists your restaurant’s assets, liabilities, and equity at a given point in time. In other words, it’s a snapshot of what your business owns and owes, as well as the amount invested.

Tips to understand a restaurant’s financial performance

To start filling out our sample sheet for The Spotted Pig, we would begin by pulling data from the venue’s POS system and accounting software. Having a structure to follow can help you build reports that reflect your company’s net worth at any time. Plus, an easy-to-use-form with pre-populated categories should make it easier to fill out. Just make sure you create a clear and accurate balance sheet that shows the right figures.

• However, if your restaurant has any of these liabilities, be sure to list them within this subcategory on your balance sheet.
• All of the restaurant’s assets are listed in the left column and all liabilities in the right column, along with their respective totals.
• You can easily track your restaurant or bar’s assets, liabilities, and equity using this free downloadable sample restaurant balance sheet.
• Suppose you supply soda cans worth $1,500 in September to an establishment but receive the payment in October.
• Plus, you have to keep track of finances to ensure that your business is successful.
• Thoroughly review the General Ledger Register to see all activity in each GL for the period.