Restaurant bookkeeping
terminology can be confusing.
Our glossary demystifies terms and acronyms that you’ll commonly find when running your restaurant.
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3rd Party App
platforms where customers can order delivery or pickup from restaurants on their phones or computers. DoorDash, GrubHub and UberEats are our 3 biggest platforms, with Ezcater gaining steam. -
4-4-5
Financial calendar with 4-week, 4-week and 5-week blocks each accounting quarter, versus monthly or 4 13-week accounting quarters. -
Accrual Based/Basis
Financials are based on the dates you incurred revenue and expenses, not based on the dates you paid for or received those expenses. -
ACH
Automated clearing house is the process of paying a vendor directly into their bank account vs a check or virtual credit. -
A/P
Accounts payable -
AP Aging
List of invoices or bills in QBO that are yet to be paid. -
A/R
Accounts receivable -
BS
Balance sheet -
Cash Based/Basis
Financials track revenue and expenses based on the dates money enters or leaves your bank account. -
COGS
Cost of Goods Sold – Cost of food and beverages associated with sales. This can also include paper supplies depending on the client. -
Direct Operating Costs
All costs outside of COGs and payroll associated with the day to day operations of running the restaurant. -
ERP
Enterprise resource planning -
Expenses below the line
All expense between NOI and net income -
FEIN
Federal employer identification number (also known as EIN) -
GL
General ledger or PL detail (in QBO) -
Gross Revenue/Gross Sales
Revenue (less voids, sales taxes, tips and possible other service fees or deferred revenue such as gift card sales) before factoring in expenses. -
Gross Profit
Net revenue less COGs -
General & Admin (G&A) Costs
These are typically overhead costs, advertising, insurance, etc.,associated with running the restaurant. -
KPI
Key performance indicators -
Net Income
NOI less taxes, interest, depreciation, amortization and typical items such as R&D, royalties and management fees. These items are more closely tied to a corporate office rather than the restaurant. -
Net Operating Income (NOI)
Prime profit less direct operating costs and administrative and general costs -
Net Revenue/Income (in QBO)
Gross revenue less discounts and 3rd party commissions (although this can be customized). -
P&L
Profit & loss statement -
Prime Profit
Gross profit less payroll costs -
QBO
Quickbooks Online -
ROI
Return on investment -
State Tax ID #
The name for this changes from state to state, but is needed to set up any payroll processing.
