Universal Chart of Accounts for Restaurants: Best Practices

Running a restaurant is equal parts art and numbers. Between juggling food costs, payroll, and those never-ending delivery app fees, your books can get messy—fast.

So how do you keep everything straight? By maintaining a clear, well-structured universal chart of accounts (COA) for restaurants.

If this is new territory, fear not. We’ll explain what it is, why it matters, and how you can set yours up to make smarter financial decisions.

What Is a Chart of Accounts For Restaurants?

A chart of accounts is basically your restaurant’s master list of financial categories—the buckets you use to record every dollar that comes in or goes out. Sales, rent, payroll, food costs, utilities, marketing—they all live here.

Most restaurants track the same kinds of expenses: food, labor, rent, and on the list goes. But they don’t always categorize them the same way, which makes it difficult to compare your restaurant’s performance against industry benchmarks.

For example, one restaurant might record “beer and wine” under Food Costs, while another puts them under Beverage Costs. These small differences make it hard to see how your numbers stack up—or even to spot trends within your own business.

That’s why accountants developed the universal chart of accounts: a standardized framework for organizing restaurant financial data. It brings consistency, clarity, and comparability. So when you review your numbers, you’re actually comparing apples to apples.

If you’ve never seen an example of a restaurant’s chart of accounts, imagine a simple list of categories: Food Sales, Labor Costs, Operating Expenses, and so on, all organized in the same way across every restaurant.

Putting Your Universal Chart of Accounts for Restaurants Into Practice

Now that you understand what a universal chart of accounts is and why it’s useful, let’s talk about how to build one that works for your restaurant—without reinventing the wheel.

To start, let’s look at the core account categories every restaurant should include and how to organize them.

Key Accounts Every Restaurant Should Track

Every restaurant’s chart of accounts looks a little different, but most successful operators track the same core categories. These are the big ones:

• Food & Beverage Costs: Break this out into subcategories—food, alcohol, and non-alcoholic beverages. This helps you see your real margins and spot where costs may be creeping up.
• Labor Costs: Track front-of-house and back-of-house separately, including wages, taxes, and benefits. Labor is one of your largest expenses, and this breakdown helps you monitor productivity and efficiency.
• Operating Expenses: Capture all the day-to-day essentials—cleaning services, linens, small wares, repairs, and utilities. These restaurant costs may seem negligible, but they add up quickly.
• Marketing & Delivery Commissions: Keep these separate from overhead. Delivery app fees, digital ads, and third-party commissions can quietly shrink your margins if you’re not tracking them on their own.

Best Practices for a Clean, Useful COA

Once your categories are set, these best practices will help your accounting for restaurants and chart of accounts stay consistent and useful:

Use Subaccounts for Clarity

Within each major category, add subaccounts for more precision. For example: “Food – Produce,” “Food – Meat,” or “Beverage – Alcohol.” Detailed tracking helps you analyze costs more effectively.

Separate COGS from Overhead

Cost of Goods Sold (COGS) refers to direct costs—ingredients, kitchen supplies, and packaging. Overhead includes rent, insurance, and admin expenses. Keeping them separate lets you calculate your prime cost (COGS + Labor), a key measure of profitability.

Align with Industry Benchmarks

Following a universal chart of accounts makes it easier to compare your data to restaurant industry averages. If your labor or food cost percentages are off, you’ll see it fast—and can act before it hurts your bottom line.

Review Regularly

Menus evolve, staffing changes, and costs fluctuate. Revisit your chart of accounts a few times a year to make sure it still reflects how your restaurant operates today.

We Transform Financial Data Into Insight

Setting up a universal chart of accounts for restaurants is relatively straightforward—but we know from experience that tasks like this can feel overwhelming when you’re busy keeping a restaurant running.

That’s why Prosperity ABCS exists.

We help restaurant owners get out of the office and back to what they do best—running their business. Whether you need help with day-to-day bookkeeping, long-term financial planning, or ensuring you have a complete picture of your financial health, we’re here to help. Contact us today!