Why Food and Beverage Accounting is Important

What is Food and Beverage Accounting?

Along with labor, any restaurant’s largest expenses are food and beverages. Because these items account for such a high percentage of business-related expenses, accounting for the inventory, cost expenditures and revenue made from food and beverage sales is crucial to any restaurant’s success. According to John Nessel of the Restaurant Resource Group, food and beverage costs are a restaurant owner’s “most controllable expense, and are often the difference between your success and failure as a business.” Therefore, accurate and strategic food and beverage accounting is a restaurant owner/operator’s best asset and measure for success.

An Expanding Field

Food and beverage accounting isn’t only for restaurant owners, however. Accountants who specialize in this field serve a variety of food and beverage clients, including bottlers, distributors, growers, producers, manufacturers and franchise operators. They also offer a wide array of services to businesses of all sizes, including accounting, financial statement reporting, strategic tax planning and consultation.

Furthermore, food and beverage accountants can advise and guide food industry professionals at any step of the game, whether they’re thinking of franchising, or starting a small, local restaurant. Whatever the enterprise, it’s important for any industry professional to work closely with an accountant who knows the ins-and-outs of the business.

A Competitive Market

The food industry is one of the most difficult industries to maintain consistent success, as food and beverage accounting prices are consistently in flux with changing market demands and regulations. Furthermore, the food industry is highly competitive, at any stage of business growth, and requires consistent attention to market trends and customer demands.

To maintain a competitive edge and steady profitability, many restaurant and food professionals hire accounting firms to help them with tax compliancy, business planning, supply management and internal processes. After all, having a professional accountant as part of your business team is just a smart way to do business. While it’s possible to do your own food and beverage accounting, many business owners find that they are simply too busy to manage their books in addition to the day-to-day operations of running a business.

Do It Yourself (With Help)

That said, some business orders will decide to hire a food and beverage accountant to merely consult on the books, rather than manage them. This is also an effective way to plan for success, as even quarterly consultation can help restaurant owners and food professionals strategically plan for taxes, inventory supply, etc. Accountants trained in food and beverage services are able to advise on business plans and help restaurant owners and food industry professionals plan for market changes and long or short term investments.

While basic food and beverage accounting isn’t difficult on a small scale, it can become very complicated very quickly, especially when there are many parties involved. It’s important to not only keep track of all expenses and incoming revenue – “food costs” and “food purchases” – on a monthly basis but to project monthly and yearly costs associated with food and beverage.

Miller Kaplan Arase LLP, a full-service public accounting firm in Los Angeles, dedicated to providing accounting, auditing, business management, tax and advisory services for food and beverage, entertainment, retail, real estate businesses, tax-exempt organizations, and individuals across the US.