The Uniform System Of s 655b2v

SITXFIN004A (S6523) Manage Finances within Budgets SITXFIN005A (S6524) Prepare & Monitor Budgets

The Uniform System of s What is the ‘uniform system of s’? The uniform system of s was developed in 1925 by the Hotels Association of New York. Since then, it has been adopted by many hospitality organisations, both in the United States and in other countries as well. The system sets out the categories to be used for various expenses (such as linen, glassware, and so on), and its great advantage is that it allows standards and comparisons among properties and the calculation of industry averages in areas such as payroll costs. The uniform system lists virtually all the different types of receipts and disbursements that come about in the course of operating a hospitality business. It then facilitates the compilation of summary reports—one such summary report being called a ‘balance sheet’ and another an ‘income statement’. The collection of all the different types of receipts and disbursements is referred to as the ‘chart of s’. These s can be either ‘debit’ or ‘credit’. We have been conditioned to believe that a ‘credit’ is a good thing, because a credit balance at our bank or shop means that we have funds in hand, whereas a ‘debit’ must be bad, because then we are ‘in the red’ and owe money. In fact, ‘debit’ simply refers to an entry on the left hand side of the ledger, or book of s, and a ‘credit’ is an entry on the right, and every transaction must have both a debit and a credit side. See Figure 8.1 (pages 212—15) for an example of a large restaurant’s chart of s that conforms to the uniform system. It is subdivided into categories, and indicates whether those categories are usually debit or credit. The uniform system of s

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Chart of s Element ASSETS 1XX numbers (usually debit balances except where noted)

Category current assets cash s receivable

inventories prepaid expenses non-current assets fixed assets

Other assets LIABILITIES 2XX numbers (usually credit balances except where noted) reserve

Current Liabilities

Long Term Liabilities OWNERS EQUITY 3XX numbers (usually credit balances

shareholding

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Name petty cash cash floats cash at bank customers employees other provision for doubtful debts (credit) food beverages other insurance licences other

Number 111 112 113 121 122 123 124

furniture and fittings F & F depreciation (credit) plant and equipment P & E depreciation (credit) leasehold improvements leasehold amortisation (credit) goodwill goodwill amortisation (credit)

151 152 153 154 155 1 56 161 162

s payable GST tax payable accrued wages accrued rent accrued interest accrued utilities deposits in advance current portion of long-term debt bank loan other

211 212 221 222 223 224 231 241

ordinary shares share retained earnings

311 312 313

131 132 1 33 141 142 143

251 252

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SALES 4XX numbers (always credit balances) COST OF SALES 5XX numbers (always debit balances) OTHER INCOME 6XX numbers (always credit balances) CONTROLLABLE COSTS 7XX numbers (usually debits

food beverages retained earnings cost of sales—food cost of sales—beverages cash discounts commissions miscellaneous wages (direct costs)

food-service wages food-preparation wages cleaning wages bartending wages

711 712 713 714

employee benefits and overheads

public holidays annual leave & leave loading superannuation employee meals employee beverages workers’ comp insurance other

721

other direct costs

tableware (<$200) kitchen utensils (<$200) other kitchen requisites linen paper supplies uniforms menus and beverage lists decorations laundry pest control delivery expenses licences

731 732 733 734 735 736 737 738 739 740 741 742

entertainment

musicians professional entertainers audio rental royalties agents’ fees

751 752 753 754 755

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722 724 725 726 727 728

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marketing

istrative costs

utilities

FIXED COSTS 8XX numbers (usually debits)

occupancy costs interest depreciation and amortisation other

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meals marketing salaries marketing wage overheads (incl. insurance) advertising public relations complimentary meals/beverages printing/preparation travel istrative wages salaries (non-management) istrative wage overheads (incl. workers’ comp. insurance) stationery/printing postage & courier telephone & email travel insurance bank charges cash short or over bad or doubtful debts general insurance repairs & maintenance (equipment) repairs & maintenance (other) electricity gas water garbage removal rent council service rates overdraft interest long-term loan interest furniture & fixtures plant & equipment leasehold goodwill management salaries management benefits legal fees & charges miscellaneous

756 761 762 763 764 765 766 767 771 772 773 774 775 776 777 778 780 781 782 783 784 791 792 793 794 811 812 821 822 831 832 833 834 841 842 843 844 Page 4 of 5

TAXES 850 numbers (usually debit or zero) CONTRA S 9XX numbers (debits or credits; must be zero at the end of the ing period)

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income taxes GST

850 851

customer contras employee contras general suspense

911 912 999

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