What are Non-Revenue Items?

Non-revenue items are transactions recorded in a POS system that do not count as actual revenue at the time of sale.

These typically include payments received in advance such as gift cards or customer deposits where the product or service has not yet been delivered.

In restaurant accounting, these transactions are recorded as liabilities until they are redeemed.

Common examples of non-revenue items include:

• Gift card purchases
• Event or catering deposits
• Prepaid orders not yet fulfilled

How Does It Work?

When a customer purchases a gift card or makes a deposit, the POS system records the amount as a liability (money the business owes to the customer), not as revenue.

Revenue is only recognized when the gift card is redeemed or the service is provided.

Sales tax is also typically applied at the time of redemption, not at the initial purchase.

For Example: If a customer buys a $100 gift card, the restaurant records it as a liability, not revenue.

When the customer later uses the gift card to pay for a meal, the transaction is recognized as revenue, and applicable taxes are applied at that time.