Restaurant bookkeeping that starts with prime cost

Every restaurant has a gap between what the POS says it sold and what the bank says it received. Card settlements land late and net of fees, cash runs short or over, delivery pays weekly, and comps, voids and employee meals reduce revenue without reducing the food that left the kitchen. We close that gap daily rather than unpicking it at month end, and we track comps and voids in their own accounts instead of netting them against sales. A rising comp percentage is an early signal of a service or control problem, and it stays invisible if the number never appears. Vendor invoices are checked against agreed pricing, which routinely turns up unapplied credits and prices that have drifted off contract.

This is the most common error we find in restaurant books. When DoorDash, Uber Eats or Grubhub pays you, the deposit is net of commission, marketing charges, delivery fees, refunds, sales tax the platform collected, and tips passed through to staff. Recording it as revenue causes three problems: sales are understated by a third or more, which distorts every ratio including food cost percentage; the commission never appears as an expense; and your sales no longer agree with the 1099-K the platform files at year end. The fix is to book gross sales as revenue and post each fee to its own account.

Tip handling is where restaurant payroll stops resembling ordinary payroll. A tip is voluntary and the customer sets the amount, while an automatic 18% on a party of eight is wages. Your POS has to separate the two at the point of sale, because everything downstream depends on it. Employees must report cash tips of $20 or more in a month by the tenth of the following month, and large food or beverage establishments file Form 8027 annually.

Under section 45B, employers can claim a credit for the employer share of Social Security and Medicare tax paid on qualifying tips, on Form 8846. Accurate tip records are what make it claimable, and restaurants without disciplined tip tracking routinely fail to claim it. The 2025 tax law added more: the qualified tip deduction covers voluntary tips only, and from tax year 2026 employers must report qualified cash tips separately on Form W-2.

A general bookkeeper can reconcile your bank account and produce compliant statements. What that will not give you is kitchen labor separated from front-of-house, a weekly prime cost, a delivery channel broken back to gross, an actual against theoretical food cost variance, or a Form 8846 credit calculated at year end. With 42% of operators reporting no profit in 2025, compliant books on their own are not enough to run a restaurant on.