Ratios Bar Cash Receipts and Credit Card Receipts

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  • Gretel
    Senior Member
    • Jun 2005
    • 4008

    #1

    Ratios Bar Cash Receipts and Credit Card Receipts

    Where can I find info on typical ratios for bar income - cash, credit card and checks?
  • TaxGuyBill
    Senior Member
    • Oct 2013
    • 2321

    #2
    Originally posted by Gretel
    Where can I find info on typical ratios for bar income - cash, credit card and checks?

    I suspect that ratio would vary tremendously depending on the area the business is located.

    Out of curiosity, why do you want that information?

    Comment

    • Lion
      Senior Member
      • Jun 2005
      • 4699

      #3
      Probably a hospitality professional organization. Or, the IRS's Audit Technique Guide for that industry or for Cash Intensive Businesses. Or, the appropriate Market Segment Specialization Program, such as https://www.unclefed.com/SurviveIRS/..._atg_final.pdf

      Comment

      • Gretel
        Senior Member
        • Jun 2005
        • 4008

        #4
        Originally posted by TaxGuyBill


        I suspect that ratio would vary tremendously depending on the area the business is located.

        Out of curiosity, why do you want that information?
        Well, I was somewhat na?ve. Since 20 years I am doing the books for a real small bar and I thought we had the understanding that he deposits all of his income and writes checks for all expenses. While the later is probably true, he never deposited cash, only checks and credit card receipts. Became obvious since he issues two checks to the gaming co. in high amounts. Thing is that the income reported goes by his bank deposits. I just tried to get a better feel for how much cash was skimmed. I am certain he still would not have any taxable income from his bar with the current standard deduction but only SE income. I feel so stupid and of course, I fired him.

        Comment

        • Gretel
          Senior Member
          • Jun 2005
          • 4008

          #5
          Originally posted by Lion
          Probably a hospitality professional organization. Or, the IRS's Audit Technique Guide for that industry or for Cash Intensive Businesses. Or, the appropriate Market Segment Specialization Program, such as https://www.unclefed.com/SurviveIRS/..._atg_final.pdf
          Thanks Lion, I looked through the IRS Audit Technique Guide but didn't see any reference to this. The MSSP seems to be easier to work with.

          Comment

          • TaxGuyBill
            Senior Member
            • Oct 2013
            • 2321

            #6
            Originally posted by Gretel

            I thought we had the understanding that he deposits all of his income

            Yeah, I've learned to ask clients EVERY year if there is any other income not deposited into the bank or on a 1099. Often I ask it via email so I have a written response from them.

            But you fired him, so try to get it off your mind. :-)

            Comment

            • spanel
              Senior Member
              • Oct 2008
              • 845

              #7
              Another way of getting close is to look at how much alcohol is being purchased. Cost of goods sold should be under 50% of sales or so. In IL, they have to report how much is purchased on their sales tax returns as a way to try to keep them honest.

              Chris

              Comment

              • Gretel
                Senior Member
                • Jun 2005
                • 4008

                #8
                Originally posted by TaxGuyBill


                Yeah, I've learned to ask clients EVERY year if there is any other income not deposited into the bank or on a 1099. Often I ask it via email so I have a written response from them.

                But you fired him, so try to get it off your mind. :-)
                The funny thing is that I do that with my questionnaire but I could swear that he would have said "no" since in his mind the cash on hand is mainly used for poker payouts, just not that much. When I asked him yesterday how much cash he has set aside for these payouts (other than what is in the till or should be in the till) he opened his vest and showed me 3 stacks of $20ties in different place amounting to $3,000. I almost felt like I was in a movie.

                Comment

                • Gretel
                  Senior Member
                  • Jun 2005
                  • 4008

                  #9
                  Thanks Chris, this is good information.

                  Comment

                  • ATSMAN
                    Senior Member
                    • Jul 2013
                    • 2415

                    #10


                    You may find this helpful.
                    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

                    Comment

                    • Uncle Sam
                      Senior Member
                      • Jul 2006
                      • 1462

                      #11
                      Try this source - https://www.unclefed.com/SurviveIRS/..._atg_final.pdf
                      Uncle Sam, CPA, EA. ARA, NTPI Fellow

                      Comment

                      • Gretel
                        Senior Member
                        • Jun 2005
                        • 4008

                        #12
                        Thanks everyone, every bit is appreciated.

                        Comment

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