Bookkeeping for Restaurants and Food Service

Three reasons, and usually all three at once. The card processor settles net of its fees, so the deposit is smaller than the sale. Settlement runs on the processor's cut-off rather than your closing time, so a late Friday lands on Monday and a month end can split a night in two. And cash, tips paid out in cash, and refunds all move separately from the card batch. None of that is a problem once sales are recorded gross and each batch is matched to its deposit. It is only a problem when the deposit is recorded as the sale, because then the fees vanish and the timing differences look like missing money.

Start from the fact that tips are not your revenue, they are money you are holding for staff, so they sit as a liability rather than in sales. Beyond that it splits by country. In Canada the CRA distinguishes controlled tips, where the employer decides how they are distributed, from direct tips that go straight from the customer to the server. Controlled tips are treated as employment income and are pensionable and insurable, so they run through payroll with CPP and EI; direct tips generally do not. Which one you have is decided by how your tip-out actually works rather than by what it is called, and a mandatory service charge you set is not a tip at all. In the United States, tips are federally reportable employee income, employees report tips to the employer, and a large food or beverage establishment additionally files Form 8027 to report receipts and tips. There is also a federal credit available to employers for social security and Medicare paid on tips. State and local rules on tip pooling and wage credits vary too much for us to state here. We do not file US payroll or information returns; what we do is record and reconcile the result.

When the card is redeemed, not when it is sold. Until then it is cash you have taken for a meal you still owe, which makes it a liability. It matters because gift card sales cluster into a few weeks of the year and redemption spreads over the following months, so a December that books all of it as revenue reports a month that did not happen and leaves the following spring serving meals with no income against them.

We would rather give you your own number than somebody else's benchmark. Targets vary enormously between a quick service counter, a bar and a full kitchen, and a figure lifted from a different format is a target that will mislead. What is useful is your own percentage calculated the same way every month against actual purchases, so a two point move is a real signal rather than a difference in how it was worked out.

No. Your point of sale stays yours: your staff ring the sales and the platform settles the batch, and none of that moves to us. What the bookkeeping needs from it is two things, a daily sales report broken down by category, and a settlement report showing what was batched and what was deposited. Nearly every system produces both, under one name or another. Send us a month of each at the start and we will tell you plainly whether they are enough to reconcile from, before you commit to anything.