Profit & Loss
Your income is the sales you have made in your restaurant. This will be the income from food, drinks, products but should not include items such as tips.
Cost of Sale
Your cost of sale figure tells you how much it cost the business to make the actual dish or drink for sale. This should not include cutlery or any other items which are not for sale to the customer.
Income minus Cost of Sales = Gross Profit
Your gross profit is the profit you make after the sale of your food but before you business overheads.
Overheads are your business expenses which do not fall within cost of sales. Typical business overheads are, staff wages, utilities, rent, etc.
Profit Before Tax
Profit before tax is the profits the business has made after the deduction of your cost of sales and your business overheads
If you are a Limited Company, your business will pay corporation tax on its taxable profits. Your taxable profits are your profit before tax minus any tax reliefs available to you.
Profit After Tax
Your profit after tax also known as retained earnings is your net profit and the money available to you to withdraw from the business.
Fixed assets are the assets your business owns which cannot be easily converted into cash. Typical fixed assets will be your kitchen equipment, machinery or any computer equipment.
Your current assets are readily available cash or assets which can be converted immediately to cash within 12 months. Your current assets will be, cash in the bank, stock, money owed from customers.
Current liabilities is money that you business owes within 12 months. Examples of this are money owed to suppliers, taxes such as VAT owed to HMRC.
Net Assets is the total of your current assets minus your current liabilities. Your net assets tells you how much readily available cash there is in the business after paying of any immediate liabilities.
Long Term Liabilities
Your long term liabilities is money that your business owes which is longer than 12 months, For example, long term loans from banks.
Retained earnings is basically what your business is worth on paper. Your retained earnings are the accumulation of your net assets plus your fixed assets plus your accumulated profits plus capital invested minus any profits withdrawn from the business.
Additional Benefits of Cloud Accounting
Reports on how much money is owed to you, who owes you and how long they have owed you money.
Real time information comparing your actual income and expenses against your budgeted income and expenses.
Reports on how much money you owe, who you owe and how long you have owed them money for.
Financial records must be kept legally for 6 years for tax purposes. With cloud accounting, we attached a digital copy of the invoice to your transactions, saving you storage costs and of course the headache of keeping paper records for so long.