Pub waste

marine Registered Posts: 31 Regular contributor ⭐
Hi guys

Come across my first pub client and just wanted some advice as to where i account for the waste on both the p&l and balance sheet. Never come across this before so any help would be appreciated.




  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
    Please explain what you mean by waste?
  • claudialowe
    claudialowe Registered Posts: 275 Dedicated contributor 🦉
    Most pubs don't account for the "ullage".

    You buy a barrel of beer for say £100.00 - if you pulled the max number of pints with no wastage (say 100 pints) and sold it for £300. However, say 10 pints were spilled/wasted and you only got £270 then:

    Sales £270.00
    Less: C of S £100

    GP = £170.00

    If you had managed to pull the full 100 pints then your GP would be £200.

    As far as I am aware you don't have to account for the "other" £30.


    PS - Not a pint drinker so don't slate me for wildly inaccurate figures :confused1:
  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
    Hi Marine,

    My understanding is that you will have to account for the ullage as a cost and a separate record of this should be kept. The VAT man would want to see this in an inspection and if your client does not keep accurate records then they could become subject to a Mark-up assessment.

    Have a look here


    Edit: I have assumed VAT registration exists if not good practice
  • mark057
    mark057 Registered Posts: 354 Dedicated contributor 🦉

    Thats quite interesting from a bookkeeping point of view.

    If you set up a waste expenses account for the P&L then it's going to have to have a corresponding figure applied to credits to get the trial balance right.

    You can't show that expense as a payment through the cash book so where does the credit go?
  • mark057
    mark057 Registered Posts: 354 Dedicated contributor 🦉
    I suppose you could transfer the wastage expense out of the stock expense account into the wastage expense account.

    Both the stock account and wastage account balances would then reconcile with the payment going out of the cash book.
  • Sevren
    Sevren Registered Posts: 101 Dedicated contributor 🦉
    I find the whole concept of wastage in a pub hard to comprehend:001_rolleyes:
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
    In response to Sevren, but not the main question:
    I have carried out audits of bars to establish whether the cash taken matches the stock consumed.
    In this situation all ullage is needed as without it you might accuse the bar staff of theft when in fact the differences were caused by a broken bottle or by beer wasted because it frothed up more than was intended.
  • Hasan.Ahmet
    Hasan.Ahmet Registered Posts: 87 Regular contributor ⭐
    Pub Waste

    Originally Posted "Come across my first pub client and just wanted some advice as to where i account for the waste on both the p&l and balance sheet. Never come across this before so any help would be appreciated.

    In Controlling the revenu for food & beverage sales in catering it is the consumption figures that you want @ sales prices. You then compare these with the actual receipts or takings. The difference is referred to as surplus or deficit on the results produced. The wastage (Presumably you mean deficit) is a notional control figure because it is the actual receipts that you take into the p&l ]unless you were using standard accounting in which case you would treat the deficit as a deduction from sales revenues. If by wastage you mean cutlery, crockery & glass wastage, these will be in the purchases costs.
    I don't know how you account for the wastage in the BS.
    These are revenue items.
    Yet, Many years ago my senior told me there is always more ways then one to skin a cat.
  • slick
    slick Registered Posts: 15 New contributor 🐸
    In my experience of dealing with pub accounts, I've never seen a 'wastage account' & instead have kept an eye on the margins otherwise being reasonable. If not, a deeper review should highlight any material discrepancies which could be dealt with to satisfy any Revenue enquiries!Although from an internal management point of view it may well be worthwhile setting up a 'wastage account' to monitor the levels of wastage & action taken if necessary earlier rather than when drafting the annual accounts. Especially say in circumstances where you have a significant fall in the recorded number of beers pulled from a barrel which could be for a number of reasons...too many freebies, unrecorded sales etc! In which case, I believe, sales would be grossed up for the understatement and the other side of the entry to Drawings, entertainment or, 'wastage account' in the P&L if identified as wastage.:001_smile:
  • JodieR
    JodieR Registered Posts: 1,002 Beyond epic contributor 🧙‍♂️
    I do the books & accounts for one pub. They employ a professional stocktaker who does a monthly stock-take which provides the client with detailed wastage figures, but I don't include these figures anywhere in the books. I only use the reports to enter the value of stock at the end of the year. Last year the client had a VAT inspection and the inspectors had full access to the stock reports and they never asked for any adjustments to be made on the VAT returns in respect of wastage.
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