Profit & Loss

Income

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.

Minus

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.

Equals

Gross Profit

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.

Minus

Overheads

Overheads are your business expenses which do not fall within cost of sales. Typical business overheads are, staff wages, utilities, rent, etc. 

Equals

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

Multiply

Corporation Tax

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.

Equals

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.

Balance Sheet

Fixed Assets

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.

Current Assets

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

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

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

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of your net assets plus your fixed assets plus your accumulated profits plus capital invested minus any profits withdrawn from the business.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

A/R Report

Reports on how much money is owed to you, who owes you and how long they have owed you money.

Budget

Real time information comparing your actual income and expenses against your budgeted income and expenses.

A/P Report

Reports on how much money you owe, who you owe and how long you have owed them money for.

Compliance

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.