Restaurant Bookkeeping & Hospitality Accounting

Restaurant bookkeeping requires specialized knowledge of high-volume transaction processing, POS system integration, tip allocation and CRA reporting, perishable inventory management, food cost percentage analysis, and complex labor scheduling with multiple wage rates. Restaurants face unique challenges including managing daily cash reconciliation from multiple payment sources, tracking food costs and waste, allocating tips among staff, calculating prime costs, and complying with health department and liquor licensing requirements.

Our restaurant bookkeeping services are specifically designed to address these industry-specific challenges. We understand that restaurants need accurate food cost tracking to maintain profitability, efficient tip reporting to ensure CRA compliance, labor cost management to control prime costs, and inventory systems that minimize waste while preventing stock-outs. Unlike generic bookkeeping providers, our team has deep expertise in restaurant accounting including prime cost optimization, menu engineering, beverage cost control, and hospitality tax planning.

Restaurant businesses also deal with razor-thin margins where small cost increases or sales declines can quickly turn profits into losses. Our restaurant accounting expertise ensures that restaurants maintain accurate cash flow forecasts, manage prime costs effectively, optimize menu pricing based on actual food costs, and make informed decisions about menu changes, promotions, and operational improvements based on sound financial analysis.

POS integration and daily sales reconciliation represent the foundation of restaurant bookkeeping, requiring systematic processes to capture every transaction, reconcile multiple payment types, and identify discrepancies quickly. Our restaurant bookkeeping services implement comprehensive POS integration that automatically imports sales data, payment processor settlements, and tip information daily, ensuring accurate records while saving managers countless hours of manual data entry.

We integrate with all major restaurant POS systems including Micros, Toast, Square, Lightspeed, and custom systems. Our integration captures sales by category, payment type breakdown including cash, credit cards, debit cards, gift cards, and third-party delivery platforms like UberEats and SkipTheDishes. We track tips by payment method and employee, facilitating accurate tip allocation and CRA reporting. Daily reconciliation compares POS sales to bank deposits, credit card processor settlements, and cash on hand, identifying any discrepancies immediately.

Our daily sales reporting provides comprehensive insights including gross sales by category (food, alcohol, merchandise), net sales after comps and voids, average check size, sales by hour and day of week, payment method breakdowns, and third-party delivery sales versus in-house sales. This daily visibility enables restaurants to identify trends, optimize scheduling, and make data-driven operational decisions.

We also track and investigate variances including over/short cash positions, unidentified credit card charges, voids and comps requiring manager approval, and suspicious patterns that may indicate employee theft. Our variance tracking protects restaurant assets while identifying training opportunities to improve accuracy.

Food cost analysis and inventory control represent critical components of restaurant profitability, where even small improvements can significantly impact the bottom line. Our restaurant bookkeeping services implement comprehensive food cost tracking that calculates actual food cost percentages, identifies variance from theoretical costs, and reveals opportunities for cost reduction and profit improvement.

We track inventory purchases by category including meat, seafood, produce, dairy, dry goods, and beverages. Our inventory systems track beginning inventory, purchases, ending inventory, and calculate cost of goods sold for each period. We calculate food cost percentages by category and overall, comparing actual costs to target costs and identifying where variances occur. Our detailed tracking reveals which menu items have excessive food costs and which generate healthy margins.

Our food cost analysis includes recipe costing that calculates the exact cost of each menu item based on ingredient quantities and current purchase prices. We track ingredient price changes and their impact on menu item profitability. When supplier prices increase, we identify which menu items require price adjustments to maintain target margins. We also analyze plate waste, spoilage, and portion control issues that contribute to food cost variance.

Beverage cost control receives special attention given its high profit potential. Our bar accounting tracks liquor, beer, and wine costs by drink type, tracks pour costs, identifies variance from expected yields, and monitors bartender efficiency. We implement inventory tracking systems that prevent theft while ensuring popular items are always in stock.

Prime cost analysis combines food costs and labor costs into the two most critical restaurant expense categories. We track prime cost as a percentage of sales, benchmarking against industry standards of 60-65% for full-service restaurants. Our prime cost reporting helps restaurants understand their true cost structure and identify opportunities to reduce either food or labor costs to improve profitability.

Tip reporting and CRA compliance represent critical areas where restaurants face significant regulatory scrutiny and potential penalties for non-compliance. Our restaurant bookkeeping services implement comprehensive tip tracking and reporting systems that ensure complete CRA compliance while minimizing tax burden for both the restaurant and its employees.

We track all tips from cash tips, credit card tips, and tip-outs from service charges. Our tip allocation systems calculate tip distributions according to restaurant policies, ensuring front-of-house and back-of-house staff receive their fair share. We maintain detailed employee tip journals that track daily tip income, supporting accurate year-end T4 reporting and CRA documentation requirements.

Our CRA tip compliance includes proper allocation of tips among employees, accurate reporting of all tip income on T4 slips, and documentation to support CRA audits. We understand the difference between controlled tips (direct tips) and indirect tips (tip pools), ensuring proper reporting for each type. We also manage special situations including banquet service charges, automatic gratuities for large parties, and tip arrangements for delivery drivers.

Tip-out calculations track amounts shared from front-of-house to back-of-house staff, ensuring fair allocation while maintaining proper documentation. Our systems handle complex tip-out arrangements including percentage-based tip-outs by role, special event tip-outs, and tip-outs for bar support staff. We ensure all tip-outs are properly recorded and reported to CRA.

For restaurants with service charges that may be considered tips versus service charges, we help navigate CRA guidelines to ensure proper classification and reporting. Our expertise helps restaurants avoid common tip reporting errors that can trigger CRA audits and penalties.

Restaurant payroll presents unique challenges including multiple job roles with different wage rates, tip income affecting payroll calculations, overtime tracking for split shifts, and provincial employment standards compliance. Our restaurant payroll services implement comprehensive systems that manage all these complexities while ensuring accurate, timely payroll processing and labor cost optimization.

We track employee hours by role including servers, bartenders, cooks, dishwashers, hosts, and management. Our payroll systems handle different wage rates for different positions, calculating overtime correctly for employees who work multiple roles at different rates. We manage split shifts where employees work double shifts with breaks, ensuring accurate hour calculation and compliance with provincial employment standards.

Our labor cost reporting tracks labor cost as a percentage of sales, broken down by role and department. We calculate sales per labor hour to measure productivity, identifying overstaffing and understaffing patterns. Our scheduling analysis helps managers optimize labor deployment, reducing labor costs during slow periods while ensuring adequate coverage during peak times.

We also manage specialized payroll situations including student employees with different tax treatment, temporary foreign workers with specific documentation requirements, and commissioned employees like banquet servers whose compensation includes both wages and tips. Our comprehensive payroll processing includes CPP, EI, and income tax deductions, workers compensation coverage, and accurate Records of Employment.

Labor cost control strategies include analyzing which shifts and days generate the highest sales per labor hour, identifying employees with exceptional productivity, and optimizing scheduling based on forecasted sales volume. Restaurants that implement our labor cost recommendations typically reduce labor costs by 5-10% without reducing service quality.

Professional restaurant bookkeeping provides the financial intelligence needed to significantly improve profitability through better cost control, menu optimization, operational efficiency, and strategic decision-making. Many restaurants rely on rough estimates or industry averages, but our detailed financial analysis enables data-driven decisions that materially improve restaurant performance.

Food cost optimization typically reduces food costs by 3-5% through better inventory management, reduced waste, improved portion control, and strategic purchasing. Our detailed food cost analysis identifies exactly where costs exceed targets, enabling focused improvement efforts. We've seen restaurants save thousands of dollars monthly simply by addressing top sources of food cost variance.

Menu engineering analyzes each menu item's profitability and popularity, categorizing items into stars (high profit, high popularity), plowhorses (low profit, high popularity), puzzles (high profit, low popularity), and dogs (low profit, low popularity). This analysis informs menu pricing adjustments, promotion decisions, and menu item elimination. Strategic menu changes based on this analysis typically increase overall restaurant margins by 2-4%.

Prime cost management combines food and labor cost control to target the ideal 60-65% range. Our prime cost analysis shows where restaurants exceed targets and identifies improvement opportunities. Restaurants that optimize prime costs see dramatic profit improvements, often increasing net profit margins from 3-4% to 8-10% of sales.

Beverage program optimization focuses on high-margin beverage items including specialty cocktails, craft beer, and wine by the glass. Our beverage cost analysis identifies opportunities to improve bar profitability through better pour control, strategic pricing, and menu engineering. Successful beverage programs can contribute 20-25% of total restaurant profit while comprising only 15-20% of sales.