I have a restaurant and I use Quickbooks for my accounting. What I am wondering is how to account for food that is thrown away? We have specials every day for lunch and dinner and I need to account for the food that is not sold and is thrown away. Could someone please help me with this? Thank you.
Cindy, you shouldn't have any entry to make. When you purchase the food you should charge a CGS type account called Purchases or Food Purchases. Small businesses don't normally keep a formal inventory in the food service industry. When you charged the Purchases account, you already wrote off the entire cost of the food whether it is eaten or thrown away or it spoils. So you can't write if off again.
Cindy- I did the books for a restuarant for over 10 years, and we did have inventory that we physically counted at the end of every month- our books were set up so that when I entered an invoice from a vendor, the purchases automatically dumped into COGS-Food, then at the end of the month I would adjust the account for the difference in inventory- and had a Spoilage/Waste account that I used for food that we threw away or owner meals, ect- I used to keep up with it in actual cost, but over time I was able to determine a pretty accurate monthly percentage amount and would just include that in the monthly journal entries that I made- so if you keep inventory records, that would be my suggestions, but if you expense everything when it arrives, then Joey is correct, you have already 'gotten rid' of everything- but every restuarant owner that I know keeps inventory records-
