EXPERIENCE IN RESTAURANT AND HOTEL ACCOUNTING

This article shares experiences in restaurant and hotel accounting, handling input material costs without invoices, and determining the reasonable waste of input material costs in the product cost.

Issue 1: Input material factors for items without invoices, such as vegetables, fruits, meat, fish, etc.

• In reality, invoices can still be obtained for these items, but the price is often higher than the market price (such as at markets or from local vendors), typically from major retailers like Coopmart, Metro, Big C supermarkets.

• When purchasing goods with invoices from these large retailers, there are several binding factors: deposit and fund requirements, purchasing must follow procedures, prices are higher than those in local markets, and issues such as outstanding debts and return procedures may complicate matters according to their rules. Therefore, although it can seem complicated, a chief accountant often seeks invoices from these suppliers to ensure smooth tax procedures, avoiding tax officials' scrutiny later. This cautious approach is a characteristic of experienced chief accountants in large, reputable companies where a small mistake could tarnish their reputation for life.

• Goods purchased without invoices are typically for those not afraid of tax issues or government scrutiny, as they haven't faced the consequences yet.

Reference: Decree No. 218/2013/ND-CP Hanoi, December 26, 2013.

Article 9: Deductible and non-deductible expenses when determining taxable income:

b) Expenses with proper invoices and documents as required by law.

For cases such as:

• Purchase of agricultural, forestry, and aquatic products directly from producers, fishing, or handcrafts made from natural materials sold by individuals.

• Purchase of raw materials from individuals who directly harvest or gather for sale.

• Purchases must have proof of payment and a receipt from the seller, and the itemized listing of purchased goods must be signed and confirmed by the legal representative of the business.

Additional documents:

• Sales contract (if available), identification card of the seller is useful.

• Proof of payment (cash or bank transfer).

• Delivery confirmation or receipt of goods.

• The itemized list of goods or services purchased without invoices (form 01/TNDN).

Reference: Circular No. 78/2014/TT-BTC Hanoi, June 18, 2014.

Article 6: Deductible and non-deductible expenses when determining taxable income:

2.4/ Expenses for goods or services purchased without invoices can still be deducted, but only if an itemized list is prepared with payment documentation. The tax agency may adjust the deductible cost based on the market price if the purchase price exceeds the market rate.

Note: This approach carries risks.

• Individuals may refuse cooperation, fearing their identity being linked to tax issues.

• Tax officials might not accept reasons for regular, large purchases by individuals, suspecting false declarations of purchase quantities and values.

• Such transactions may have less scrutiny regarding product quality, which could mean accepting lower-quality products at a cheaper price.

Issue 2:

PURCHASE OF GOODS: Controlling Input Material Factors

Based on monthly consumption needs, the accounting department (Inventory Accountant + Chief Accountant) estimates the necessary quantities and types of goods, requesting approval from the Director to proceed with purchasing and inventory (using the company’s requisition form).

• Sales department receives bills, contracts, bookings… The front desk and sales report the number of guests, the banquet to the kitchen for the chef to adjust the menu and portion size, leading to an itemized list for purchasing.

• The chef prepares recipes for each dish, including ingredient quantities and cost estimates for all menu items (Set Menu, À La Carte, Buffet, etc.).

• The input material ratio is capped at 30% of the revenue from sales.

• The purchasing department monitors input material costs and informs the director if prices rise, proposing methods to reduce input costs.

Each department, including purchasing, prepares an itemized list of ingredients: meat, fish, vegetables, fruits, etc., and forwards it to the purchasing team for timely procurement.

Purchasing Officer’s Role:

• Prepare an itemized list of quantities, types, quality, and total cost, based on estimations.

• Prepare a request for advances and purchase orders, which the chief accountant must approve before proceeding with the purchase.

• The purchasing officer finds the best prices, including contacting markets, supermarkets, local vendors, etc.

• Record outstanding debts and ensure timely payments according to the company’s internal accounting controls.

Supplier Management:

• Contact organizations, individuals, and vendors to find the best prices for materials while ensuring quality.

• Keep a separate list for market and supermarket purchases to streamline contact and procurement activities.

Goods Received:

• Daily purchasing for materials such as meat, fish, vegetables, etc.

• For direct purchases, create purchase orders, financial invoices, payment slips, or bank transfers, along with inventory receipts.