The Complete Breakdown of Food Truck Operation Costs 2022 Update

The next step is to set up your chart of accounts to categorize the money flowing in and out of your business. A standard chart of accounts includes assets, liabilities, expenses, revenue, and owner’s equity. If you’re starting a coffee truck, you’ll need an espresso machine, coffee grinders, refridgerator and coffee maker onboard. food truck accounting If you want to open a French fry truck, you’ll need deep fryers. Write this down and add up the cost to get the most precise estimate of startup cost possible. Whether managing finances from the food truck or remotely, owners can conveniently access and update their accounting data, providing flexibility and convenience.

Because of this you may not need to use commercial kitchen space at the commissary. Consider this before you lock into a long term commissary contract. The cost of renting space at a food truck commissary can vary greatly depending on your location. Most shared use kitchens are fairly affordable, with most commissaries offering an hourly rate between $15 – $30 per hour.

Benefits of Accounting for a Restaurant

Your Point of Sale (POS) system typically keeps track of all credit card and cash sales, and all receipts should be filed and recorded in a Profit and Loss document (P&L). It is also essential to keep a close eye on your inventory counts. To further avoid overfilling accounts receivable, do not hold checks for clients. What this means is you shouldn’t hold on to a check (as opposed to depositing it at the bank right away) for a client until a future date. There is no guarantee any funds will be in the client’s bank account in the future. Let’s say that currently the accounts receivable account in your clinic has a balance of $0.

It helps you understand how much you’re spending to make the food. Based on the size of your restaurant, you can set up an inventory management system that optimizes food costs and reduces waste. The inventory also helps you avoid food shortages and surpluses. Once you receive invoices, update them on the accounting software. Paying your bills on time and keeping your vendors and suppliers happy is essential for the efficient functioning of a restaurant.

Understand your operating expenses

This will provide you with a snapshot on how your business did within a certain period of time. Finding out what permits you need for a food truck is an essential part of running a successful business. Use our list above to learn what to expect as you get your business off the ground. Keeping these books for your restaurant straight, current, and accurate is crucial to the financial success of your business. You can use restaurant accounting software to manage all your bookkeeping needs, such as creating professional invoices, managing cash flow, and tracking time. You set up a food truck business not because you’re good in accounting.

If your inventory turnover is less than seven days, this might indicate that you’re not buying enough inventory or you’re at risk of running out of supplies. On the other hand, if your inventory turnover is higher than seven days, this may mean you’re purchasing more inventory than you need. It could impact the quality of your food as you’re working with older ingredients. Variable expenses change over time, which means they can be scaled back should you need to increase cash flow or face a sudden slump in orders. COGS are often a variable expense as you would need fewer ingredients for fewer orders. You’ll need to keep a record of any invoices for tax purposes.

Daily sales reports

It allows real-time tracking of your financial performance and mitigates errors that occur with manual restaurant accounting. You can choose between cash and accrual accounting if your restaurant has less than $1 million in revenue. The most common accounting method of restaurants is cash accounting or cash basis. This method allows businesses to record their generated income when cash is received from services rendered or paid for expenses and costs. Since restaurants and bars deal with a lot of cash daily, this method is the preferred method.

The following are just a few examples of the state-specific permits and licenses food truck owners may encounter. Keeping track of your revenue is important to restaurant bookkeeping. Use the accounting records on hand to show how much you earn from food sales, merchandise sales, or catering jobs. Find out how much revenue you make each day and ideally break them further into food and beverage categories.