Not necessarily, restaurants use what they call "comps" or free meals to keep track of losses from meals, items (drinks, single menu items, etc...) when no sale has taken place. Theses are set up in the accounting program as an expense account which helps them keep records of all comps and are therefore recorded as losses on the tax returns. "comps" can also be consider a form of marketing/advertising and considered an expense under such accounts. Since, raw materials are used to manufacture the product sold (or in this case comped) the value of the final product can be counted as a loss/expense in addition to the expense of the raw supplies/materials used.
edited to add:
Think of it another way, if a restaurant or bakery prepared items for sale using raw materials and supplies to product the product for sale and they receive no sales on the item(s). Do you think they are stuck with only deducting the cost of the material/supplies to manufacture the products being sold they didn't sale? No they are not, they deduct the raw materials/supplies which the cost was much lower than what they were selling for so therefore they also had to account for the lost of sales.
I'm not saying that just because you have no shows you can deduct the cost of what the cake order would have been...but there should be a value on the labor, raw materials, and supplies required to manufacture the goods sold in this case cake whether it be comped via tastings or a paid wedding order. For cake tastings a good amount would be around $25-$50. That doesn't mean start charging for tastings...but start accounting for exactly the labor,material cost, lost sale amount so that you can deduct the appropriate amount when tax time comes.
Some people charge a tasting fee they apply to the price of the cake (discount). Have people pay the tasting fee when they book the tasting, so if they no show it is NON REFUNDABLE. If they reschedule have a rescheduling fee.... IF they no showed. If they cancelled with reasonable time, then you don't charge the rescheduling fee. Just be upfront with your costs!
Not necessarily, restaurants use what they call "comps" or free meals to keep track of losses from meals, items (drinks, single menu items, etc...) when no sale has taken place. Theses are set up in the accounting program as an expense account which helps them keep records of all comps and are therefore recorded as losses on the tax returns. "comps" can also be consider a form of marketing/advertising and considered an expense under such accounts. Since, raw materials are used to manufacture the product sold (or in this case comped) the value of the final product can be counted as a loss/expense in addition to the expense of the raw supplies/materials used.
edited to add:
Think of it another way, if a restaurant or bakery prepared items for sale using raw materials and supplies to product the product for sale and they receive no sales on the item(s). Do you think they are stuck with only deducting the cost of the material/supplies to manufacture the products being sold they didn't sale? No they are not, they deduct the raw materials/supplies which the cost was much lower than what they were selling for so therefore they also had to account for the lost of sales.
I'm not saying that just because you have no shows you can deduct the cost of what the cake order would have been...but there should be a value on the labor, raw materials, and supplies required to manufacture the goods sold in this case cake whether it be comped via tastings or a paid wedding order. For cake tastings a good amount would be around $25-$50. That doesn't mean start charging for tastings...but start accounting for exactly the labor,material cost, lost sale amount so that you can deduct the appropriate amount when tax time comes.
I agree with this completely. What a great explanation on how to deduct a loss. I keep track of everything I throw out....it adds up at the end of the year and also keeps my eye on what I am wasting and what I can change to not have so much.
you have to account for all items in and all items out...including what you give away, comp and throw away.
What I comp is under my advert budget.
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