A restaurant is a high-volume, thin-margin business with a lot of moving money: sales, tips, tax, deposits, vendors, and payroll. Generic bookkeeping misses the details that matter. For the how-to view, see our restaurant accounting guide. This article covers what to ask of a bookkeeping service.
Daily sales and deposits
The point-of-sale report should be recorded as gross sales by category, with sales tax collected, card tips, tenders, and fees shown separately, then tied to the bank deposit. Booking only the net deposit hides processing costs and liabilities.
Tips and tipped payroll
- Card tips are owed to employees, so they are liabilities until paid out.
- Reported tips are wages for payroll tax purposes.
- Food and beverage establishments may qualify for a credit for employer FICA paid on tips. The credit is limited to those establishments.
- Larger food and beverage establishments may have additional tip reporting requirements. Ask your accountant whether they apply to you.
- Minimum wage and tip credit rules differ by state.
Food and beverage cost
Cost of goods sold requires tracking purchases and inventory. A monthly count, even a simple one, lets the books show real food cost. Combine it with labor to see prime cost, the figure most restaurant operators watch closely.
Delivery apps and third-party platforms
Delivery platforms pay out net of commissions and fees. Record the gross sale and the fees separately so your revenue and cost percentages are not distorted, and watch how each platform handles sales tax collection in your state.
Other restaurant-specific items
- Gift cards are liabilities until redeemed.
- Vendor invoices should be matched and coded to food, beverage, or supplies.
- Cash handling controls and voids need review.
- Sales tax filings, which may be frequent and have varying rules for prepared food.
- Liquor license and local fee renewals.
Questions to ask a provider
- 1Do you reconcile the POS to bank deposits daily or weekly?
- 2How are tips and gift cards recorded?
- 3Will I receive monthly prime cost and food cost reports?
- 4Can you handle tipped payroll and sales tax filings?
- 5Do you coordinate with my tax preparer so year-end is smooth?
Our bookkeeping service and payroll service can be combined for restaurant owners. See also local business sales tax. To discuss your bookkeeping needs, bring a recent POS report and bank statement.
