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Accounting Software & Chart of Accounts for Food Truck Business

Managing Your Food Truck Business with Accounting Software

In our final blog post of the food truck series, we will discuss the importance of using accounting software to track your business’s financial performance. Accurate accounting is essential for understanding how your business is doing, managing assets and liabilities, and making informed decisions. We recommend using Xero or QuickBooks Online, which are both suitable for food truck businesses. Additionally, we’ll explore the creation of a customized chart of accounts tailored for your food truck business, specifically using the example of “Campus Tacos.”

Importance of Accounting Software

Track Profit and Loss:

  • Revenue Tracking: Keep track of daily sales and other income sources.
  • Expense Management: Record and categorize expenses to understand your cost structure.
  • Profit Margins: Calculate gross and net profit margins to assess profitability.

Manage Assets and Liabilities:

  • Asset Tracking: Monitor the value of your food truck, equipment, and inventory.
  • Liability Management: Keep track of loans, credit lines, and other obligations.

Monitor Payables and Receivables:

  • Payables: Manage bills from suppliers and ensure timely payments to maintain good relationships.
  • Receivables: Track outstanding customer invoices to ensure timely collection of payments.

Financial Reporting:

  • Performance Reports: Generate financial reports such as profit and loss statements, balance sheets, and cash flow statements.
  • Tax Compliance: Maintain accurate records for tax filing and compliance purposes.

Recommended Accounting Software

Xero:

  • Features: Xero offers features such as invoicing, bank reconciliation, expense tracking, and financial reporting.
  • Benefits: User-friendly interface, integration with numerous third-party apps, and strong customer support.

QuickBooks Online:

  • Features: QuickBooks Online provides comprehensive features including invoicing, payroll, expense tracking, inventory management, and financial reporting.
  • Benefits: Extensive functionality, easy-to-use interface, and strong integration capabilities with other business tools.

Creating a Customized Chart of Accounts

A customized chart of accounts (COA) is essential for accurately categorizing your financial transactions and generating meaningful reports. The COA is a listing of all the accounts used in the general ledger of your business. Each account in the chart of accounts is typically assigned a unique number to facilitate organization and reporting.

Structure of a Chart of Accounts:

  1. Assets (1000-1999): Resources owned by the business
    • Buildings and Land
    • Equipment and Vehicles
    • Inventory
    • Bank Accounts
    • Accounts Receivables
  2. Liabilities (2000-2999): Obligations owed by the business
    • Accounts Payables
    • Payroll Taxes
    • Bank Loans
    • Credit Card Balances
    • Deferred Tax Liabilities
  3. Equity (3000-3999): Owner’s interest in the business
    • Capital Contributions
    • Owner’s Withdrawals
    • Retained Earnings
  4. Income (4000-4999): Revenue generated by the business
    • Sales
    • Other Income
  5. Expenses (6000-7999): Costs incurred by the business
    • Advertising Expense
    • Interest Expense
    • Depreciation Expense
    • Salaries or Wages

Detailed Example of a Chart of Accounts for Campus Tacos:

  1. Assets (1000-1999):
    • 1000 – Cash
      • 1001 – Cash – Checking Account
      • 1002 – Cash – Savings Account
    • 1100 – Accounts Receivable
    • 1200 – Inventory
    • 1300 – Prepaid Expenses
    • 1400 – Fixed Assets
      • 1410 – Food Truck
      • 1420 – Kitchen Equipment
      • 1430 – Office Equipment
    • 1500 – Accumulated Depreciation
      • 1510 – Accumulated Depreciation – Food Truck
      • 1520 – Accumulated Depreciation – Kitchen Equipment
  2. Liabilities (2000-2999):
    • 2000 – Accounts Payable
    • 2100 – Credit Card Payable
    • 2200 – Loans Payable
      • 2210 – Bank Loan
    • 2300 – Payroll Liabilities
    • 2400 – Deferred Tax Liabilities
  3. Equity (3000-3999):
    • 3000 – Owner’s Equity
    • 3100 – Retained Earnings
    • 3200 – Owner’s Draw
  4. Income (4000-4999):
    • 4000 – Sales
      • 4001 – Sales – Credit Card
      • 4002 – Sales – Cash
    • 4100 – Catering Income
  5. Expenses (6000-7999):
    • 6000 – Cost of Goods Sold
      • 6001 – Food Supplies
      • 6002 – Beverage Supplies
    • 6100 – Wages and Salaries
    • 6200 – Rent Expense
    • 6300 – Vehicle Expense
      • 6301 – Fuel
      • 6302 – Maintenance and Repairs
    • 6400 – Utilities
    • 6500 – Marketing and Advertising
    • 6600 – Insurance
      • 6601 – Workman’s Comp Insurance
      • 6602 – Liability Insurance
      • 6603 – Vehicle Insurance
    • 6700 – Office Supplies
    • 6800 – Depreciation Expense
    • 6900 – Miscellaneous Expenses

Using Sub-accounts for Detailed Tracking: By using sub-accounts, you can break down major categories into more specific accounts. For example:

  • 4000 – Sales
    • 4001 – Sales – Credit Card
    • 4002 – Sales – Cash

This allows you to track different types of sales separately and gain better insights into your revenue streams.

Importance of a Detailed Chart of Accounts:

  • Cash Flow Management: Helps you understand how cash flows into and out of your business.
  • Cost Analysis: Provides detailed insights into various expense categories, allowing you to identify areas for cost savings.
  • Forecasting: Facilitates accurate financial forecasting and budgeting.
  • Decision Making: Informs strategic decisions, such as whether to invest in a new food truck based on maintenance costs of the existing vehicle.

Downloadable Chart of Accounts Files: Here are the sample files for both Xero and QuickBooks Online that you can download and import into your accounting software:

Why Choose Jason Arsenault CPA, LLC?

You didn’t start your business to be bogged down by bookkeeping and payroll. If you find yourself buried in numbers and want to get back to running your business, we’re here to help. Leave the number crunching to our experienced and trusted accountants. We can manage your books and handle your invoicing, inventory, payroll, accounts payable, reconciliations, and accounts receivable. You’ll have quick and easy access to all your financial information with Xero Accounting Software or QuickBooks Online and more time to focus on growing your business and increasing your profits.

Tax & Accounting Services for Businesses

Start Up

  • Starting at $150 PER MONTH
  • Bookkeeping
  • Gross Receipts Filing
  • Annual Financial Statements
  • Xero or QuickBooks Account
  • Secure Email Account
  • Get Started

Growth

  • Pricing Varies – Contact Us for Details
  • Everything in Start Up
  • Payroll Support
  • Semi-Annual Financial Statements
  • Dedicated Email Support
  • Get Started

Performance

  • Pricing Varies – Contact Us for Details
  • Everything in Growth
  • Custom Chart of Accounts
  • Payroll
  • Monthly Financial Statements
  • Tax Planning
  • Technology Review
  • Annual Corporate Tax Return
  • Get Started

Contact us for assistance with your business setup:

Jason Arsenault CPA, LLC

Let us help you achieve success with our comprehensive accounting and tax services, tailored to meet the unique needs of your food truck business.

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Accounting Software & Chart of Accounts for Food Truck Business