The first element is the question of when you account for costs. Accounting for costs at the time the stuff is delivered or when you pay it. Since a lot of restaurant food purchases typically are paid at the beginning of the next month, accounting for purchases at the month when they are delivered will give you more accurate accounting reports.

For example, on a pure cash basis, many costs will be accounted in month after goods have been purchased because that is when you pay for it. If there is little fluctuation with the purchases, this will not distort the profit and loss for a particular month. But if the purchase amount fluctuates, there can be a high cost of goods sold month and a low cost of goods sold month on the profit and loss statement. This will not give you an accurate picture of the monthly business results.

Accounting by cash method is quite simple. The usage may depend on how accurate you want the monthly profit and loss statement to be and also the fluctuation in the purchase on a monthly basis.