Insights / Reference
Hospitality chart of accounts
The structure we deploy, and the reasoning behind it. A general chart of accounts will produce a technically correct P&L that tells an operator nothing — the grouping is what makes the statement readable.
Three principles
Group to prime cost, not to GAAP order
Food, beverage and all labour categories sit adjacent so prime cost is a subtotal on the face of the statement, not something the reader calculates. Operators manage that one number weekly.
Separate controllable from non-controllable
A general manager can influence direct operating, marketing and repairs. They cannot influence rent, depreciation or interest. Splitting them lets you measure the manager on what they control and the deal on what they do not.
Sub-account by concept, not by vendor
Food cost splits into produce, protein, dairy, dry goods and paper — categories a chef can act on. Splitting by vendor produces a list that tracks purchasing habits rather than cost behaviour.
For lodging clients the same logic is applied within the USALI departmental structure, so brand and lender reporting requirements are met without a second set of books.
| Range | Account group |
|---|---|
| 4000 | Revenue — food, beverage, retail, delivery, catering, other, less comps and discounts |
| 5000 | Cost of sales — produce, protein, dairy, dry goods, paper, beer, wine, spirits, NA beverage |
| 6000 | Labour — hourly kitchen, hourly FOH, salaried management, payroll taxes, benefits, workers comp |
| — | Prime cost subtotal (5000 + 6000) |
| 7000 | Direct operating — smallwares, cleaning, uniforms, laundry, menus, kitchen supplies |
| 7200 | Marketing — digital, print, third-party delivery commission, loyalty, local minimum |
| 7400 | Utilities — electricity, gas, water, waste, telecom |
| 7600 | Repairs and maintenance — equipment, building, service contracts |
| 7800 | General and administrative — bank and card fees, POS, insurance, professional fees, licences |
| 8000 | Occupancy — base rent, percentage rent, CAM, property tax, property insurance |
| 8500 | Franchise — royalty, national ad fund, technology fee |
| 9000 | Non-operating — depreciation, amortisation, interest, pre-opening, non-recurring |
Percentage rent sits in occupancy, not in cost of sales — a common misposting that distorts prime cost and makes unit comparison meaningless.
Period structure
4-4-5 quarters
Thirteen weeks per quarter in a 4, 4, 5 pattern. Each quarter is directly comparable; months are not equal length but quarters are.
13 equal periods
Every period is exactly four weeks. The cleanest structure for week-over-week and period-over-period comparison, and the one most multi-unit operators prefer.
Calendar months
Simplest for tax and lender reporting, and the worst for operational comparison — a five-Saturday month looks like growth that is not there.
Whichever you use, the close calendar and the comparison basis have to be stated on the report. Most disputes about a bad period turn out to be disputes about the calendar.