Restaurant accounting from POS to P&L.
Tip reporting, food cost tracking, and location-level margins for the operators who close covers every night.
Where restaurant margins leak.
Tip reporting
Complex tip credit rules, pooling regulations, and IRS-safe reporting.
High turnover
Constant onboarding, seasonal staff, and multi-location payroll, done cleanly.
Cash flow
Daily deposits, vendor payments, and seasonal fluctuations, planned in advance.
Food cost tracking
Inventory, waste, and margins in a high-volume environment.
Same business. Same twelve months. Different ending.
Where restaurant margins quietly die
- Prime cost drifting three points and nobody catches it until the bank balance says so.
- Tip credits and payroll filings handled loosely, one of the most audited corners of the industry.
- Vendor price creep buried in a general food-cost bucket, invisible until quarter end.
What control tastes like
- Prime cost tracked weekly against your own trailing months, so drift gets caught in days.
- Payroll, tips, and filings done right on schedule, with the FICA tip credit actually claimed.
- Location-level numbers that tell you which door earns and which door leaks.
The fourteen-day assessment costs nothing and you keep every deliverable either way. The only thing at risk is another year of the left column.
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The full restaurant stack.
Books, payroll, tips, food cost, and monthly location P&L.
- Daily sales reconciliation and deposit tracking
- Tip reporting and FICA tip credit calculations
- Weekly or bi-weekly payroll processing
- Food cost and inventory tracking
- Vendor payment management
- Multi-location consolidation
- Monthly P&L with industry KPIs
- Sales tax compliance (food vs. alcohol)
- Quarterly tax planning
- Year-end tax preparation
What you get, every plan
- Books closed on your plan's schedule, every month.
- All fifty states covered.
- Open seven days a week.
- 14 days. No card. Keep the deliverables.
Written for restaurants, not a brochure.
Nothing below is a summary. Each position names the section it rests on, so open only what applies to you.
01What quietly costs you money5 we find most↓
None of these are exotic. They are the ones we find most often when we open a new set of books.
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01
Booking the bank deposit as revenue instead of building a daily sales journal from the POS
Card settlements arrive net of merchant fees, and delivery platforms remit net of commission, marketing fees and driver costs. If the bookkeeper posts the deposit amount to sales, the fees never appear as an expense and revenue is understated by whatever the processors kept. Comps, voids, promos, gift card redemptions and sales tax collected also never get separated out.
Your food cost percentage is measured against the wrong denominator every period, so it looks better than it is. Merchant and delivery commission never appears as its own expense, so nobody ever renegotiates it. Gift cards sold get counted as income instead of a liability. And the mismatch usually does not surface until the return, or until a sales tax review compares your DR-15 gross sales to your 1099-K totals and the two do not agree.
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02
Running a mandatory tip pool that includes back of house while still taking the Florida tip credit
Under the FLSA as amended in 2018, an employer that takes a tip credit may only pool tips among employees who customarily and regularly receive tips. An employer that pays the full minimum wage in cash and takes no tip credit may include cooks and dishwashers in a mandatory pool. Managers and supervisors may never share in a tip pool under either arrangement. Florida operators claiming the $3.02 tip credit are in the first category, and some of them are sharing tips with the kitchen anyway. Note the wage step: the Florida tipped cash wage is $10.98 through September 29 2026 and $11.98 from September 30 2026, when the state minimum wage reaches $15.00. The $3.02 tip credit is unchanged.
The exposure sits in the tip credit rather than in the pool itself. If the credit is lost, the $3.02 per hour comes back as unpaid wages for every tipped hour in the lookback period, and liquidated damages can double it. The FLSA lookback is two years, or three where the violation is found to be willful. Worked example with assumptions stated, not a client result: 20 tipped employees averaging 25 hours a week, at $3.02 an hour over a two year lookback, is roughly $157,000 in back wages before liquidated damages. The fix costs nothing if you make it before a complaint is filed. Either restructure the pool, or pay the full minimum wage in cash and pool freely.
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03
Treating auto gratuity on large parties the same as a tip
A mandatory service charge is not a tip. It is your revenue first, and wages when you pay it out. The staff did not decide the amount, and voluntariness is the test. It does not go on the tip line of the W-2, it does not qualify for the section 45B FICA tip credit, and it must be folded into the regular rate of pay when you calculate overtime. Florida adds a sales tax layer: under Rule 12A-1.0115, a gratuity is exempt from sales tax only if it is separately stated and paid entirely to employees.
Three problems at once. You overstate the section 45B credit and understate tax if examined. You underpay overtime, because the regular rate was computed without the service charge. And if the auto gratuity was not separately stated on the check, or the house kept a portion of it, Florida wants 6 percent state sales tax plus the county surtax on every dollar of it, back through the audit period.
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04
Reporting delivery platform sales as your own taxable sales in Florida
DoorDash, Uber Eats and Grubhub are marketplace providers in Florida and are required to collect and remit Florida sales tax on the orders they facilitate. The restaurant still has to report those gross sales on the DR-15, then back them out on the marketplace line. Bookkeepers who do not know the line exists either report the sales and pay the tax a second time, or leave the sales off entirely to avoid the double payment.
Paying twice bleeds cash every month with no line item that explains it. Leaving the sales off is worse, because your DR-15 gross sales will not tie to the 1099-K the platform files under your EIN, and that is the kind of discrepancy that invites questions from the Department of Revenue. Neither error is hard to fix. Both are common.
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05
Counting inventory once a year and calling the difference food cost
Without a period end count, cost of goods is just purchases, and purchases move with delivery timing rather than with what you sold. A large produce and protein drop on the last day of the period lands entirely in that period's cost even though most of it gets sold in the next one. Waste, spoilage, employee meals and comped food all disappear into the same number.
Your monthly food cost bounces five or six points with no operational cause, so you stop trusting it, and then you stop managing to it. Theft and portioning drift both hide inside that noise for months. Counting even the top twenty items weekly, with a full count at period end, is usually enough to make the number mean something again.
02The numbers your business actually runs on6 to know cold↓
Prime cost
Cost of goods sold, meaning food plus beverage, added to total labour including payroll taxes, workers compensation and benefits, expressed as a percentage of total sales.
It captures the two costs you actually control day to day, and it moves the fastest. Above the mid sixties, rent and utilities alone will take most of the rest, and a normally profitable room turns into a break even room without any single obvious cause.
Rule of thumb only, not a WAYG measurement or a guarantee. Operators and industry associations commonly work to roughly 60 to 65 percent of sales in full service, and closer to 60 percent or below in quick service. Your own concept, market and lease will move the right number.
Food cost percentage
Beginning inventory plus purchases minus ending inventory, divided by food sales, for a defined period.
It is where menu pricing, portion control, waste, vendor pricing and theft all show up. It is only meaningful if you count inventory at both ends of the period and if the sales denominator is gross sales from the POS rather than the net bank deposit.
Rule of thumb only. Commonly managed in the high twenties to mid thirties depending on concept, with steakhouses and seafood generally running higher and pizza and pasta generally running lower.
Occupancy cost
Base rent plus common area maintenance, property tax pass through, insurance and percentage rent, as a share of total sales.
It is the one major cost you cannot cut after you sign. That makes it the number that decides whether a lease renewal or a second location is survivable, and it is the first thing we model before you commit to either.
Rule of thumb only. Operators generally want this in the single digits as a percentage of sales, commonly cited around 6 to 10 percent. It is fixed in dollars, so the percentage only improves by selling more.
Reported tips as a percentage of gross receipts
Total tips your employees report to you, divided by gross receipts from food and beverage where tipping is customary.
Under reporting is common, and the establishment carries the consequence, not the server. Watching this number monthly rather than discovering it in February is the difference between a coaching conversation and an allocation landing on your whole staff's W-2s.
This one is not a rule of thumb. The IRS allocation threshold for large food and beverage establishments is 8 percent, set by regulation. Falling below it triggers allocated tips on Form 8027 unless the IRS has approved a lower rate for your establishment.
Delivery commission as a percentage of delivery sales
All platform fees taken out before remittance, including commission, marketing and promotion charges, and any delivery or service fees the platform keeps.
Delivery sales look like growth on the top line and often are not. Once commission sits beside the gross delivery revenue that produced it, you can compute a contribution margin per channel and decide honestly whether that channel earns the kitchen capacity it consumes.
There is no single correct number and we do not publish one. Effective take rates in the twenty percent range or higher are frequently reported by operators, and they depend heavily on the tier you signed. What matters is that the figure sits on its own line in your P&L so you can see your own rate.
Sales per labour hour
Total sales for a shift or a week divided by total hours worked in that same window, tracked by day part.
Labour is scheduled a week in advance, so a bad number caught on Monday can be corrected on Tuesday. A bad food cost takes a menu change and a vendor conversation to move.
Set your own baseline from your best four weeks and schedule against it. The trend and the variance between day parts matter more than any national average.
03Where the tax work is6 positions↓
Each one names the section it rests on and who is allowed to perform it.
Section 45B FICA tip credit, claimed on Form 8846
IRC section 45B, Form 8846
You pay the employer share of Social Security and Medicare, 7.65 percent, on tips your employees report. Section 45B gives you a general business credit for that employer FICA on tips above the amount needed to bring the employee to $5.15 per hour, which is the federal minimum wage rate frozen into the statute as of January 1 2007.
Read the full position, 192 more wordsShow less↓
Florida operators paying a tipped cash wage of $10.98, rising to $11.98 on September 30 2026, are already well above $5.15, so in practice most or all reported tips qualify.
Illustration with assumptions stated, not a client result and not a promised outcome: on $600,000 of reported tips, employer FICA at 7.65 percent is about $45,900, which gives you the order of magnitude of the credit. Two things move the real figure.
The credit is computed employee by employee, and the 6.2 percent Social Security component stops once an employee crosses the annual wage base, so a high earning employee's later tips carry only the 1.45 percent Medicare piece.
Under IRC section 45B(c) you must also reduce your deduction for the FICA taxes taken into account in computing the credit, so the benefit is the credit net of the tax on that lost deduction rather than both. The credit flows through to owners on a pass through return and carries forward when it cannot be used. It is commonly missed on restaurant returns.
Prior years can often be picked up on an amended return, subject to the normal three year refund statute.
Who does it: In house. We compute the credit, prepare Form 8846 and prepare and sign the return it attaches to, under an IRS PTIN.
Form 8027 and allocated tips for large food and beverage establishments
IRC section 6053(c), Form 8027
If you operate a food or beverage establishment where tipping is customary and you normally employed more than 10 employees on a typical business day in the prior year, you file Form 8027 annually. It is due by the last day of February, or by March 31 if you file electronically.
Read the full position, 123 more wordsShow less↓
If total tips reported by your staff come to less than 8 percent of gross receipts, you must allocate the shortfall among tipped employees, and that allocation lands on their W-2s.
You or a majority of your directly tipped employees can petition the IRS to reduce the rate below 8 percent, down to a floor of 2 percent, where the establishment can show a lower rate reflects actual tipping. The 10 employee test is applied per establishment, so a multi location group can have some locations in and some out.
This is also where charged tips and charged receipts have to be tracked separately from cash, which is a bookkeeping design decision made in January, not a filing season decision made in February.
Who does it: In house. We track the inputs monthly, prepare and file Form 8027, and prepare the reduced rate petition where the numbers support one.
Employee shift meals stopped being deductible on January 1 2026
IRC section 274(o), with the customer sale exception at IRC section 274(e)(8) and the fishing carve out at IRC section 274(n)(2)(C)
Food you sell to customers in a bona fide transaction stays fully deductible as your cost of goods, and that has not changed. Staff meals are a different question.
Read the full position, 184 more wordsShow less↓
Under IRC section 274(o), added by the 2017 law and effective for amounts paid after December 31 2025, no deduction is allowed for the operation of an employer operated eating facility or for food and beverages associated with it, including food that would otherwise be a de minimis fringe. This is a full disallowance from 2026, not a reduction to 50 percent.
The One Big Beautiful Bill Act added a carve out for meals provided on fishing vessels and at fish processing facilities, which does not reach restaurant employers. So from tax year 2026 forward, family meal and staff meal costs are generally nondeductible, while food sold to guests remains fully deductible under the customer sale exception.
The practical consequence is that your chart of accounts and your POS mapping have to separate food consumed by staff from food sold to guests. Without that split you are either claiming a nondeductible expense or burying it inside cost of goods, and neither position survives examination.
Where meals are instead included in an employee's taxable wages, the treatment differs and is worth reviewing case by case.
Who does it: In house. We restructure the chart of accounts and the POS mapping so the split happens automatically, and we prepare and sign the return.
Section 179 and bonus depreciation on the build out, including the parts people miss
IRC sections 179 and 168(k), Rev. Proc. 2025-32 for the 2026 amounts, Form 4562
The section 179 expensing limit is $2,500,000 for tax year 2025 and $2,560,000 for tax year 2026, with the 2026 dollar for dollar phaseout beginning once section 179 property placed in service passes $4,090,000. Qualified improvement property, meaning interior improvements to nonresidential space you already occupy, is 15 year property and is eligible.
Read the full position, 103 more wordsShow less↓
Section 179 also reaches roofs, heating and air conditioning, fire protection and alarm systems on nonresidential real property, which is exactly where restaurant build out money goes. One hundred percent bonus depreciation was restored for qualifying property acquired after January 19 2025.
Section 179 is limited by your taxable income from the active business and bonus depreciation is not, so on a loss year the ordering matters and getting it backwards wastes the deduction. Separately, the clean vehicle credits terminated for vehicles acquired after September 30 2025, so a delivery van bought in 2026 is a depreciation question rather than a credit question.
Who does it: In house for the analysis and the return. A formal cost segregation study on a larger build out is coordinated through our vetted partner network under a signed engagement letter.
The tips and overtime deductions, and what they now require from you as the employer
One Big Beautiful Bill Act, IRS Notice 2025-69, Form W-2
For tax years 2025 through 2028, employees can deduct up to $25,000 of qualified tips and up to $12,500 of qualified overtime compensation, $25,000 on a joint return, whether or not they itemize. Both phase out above $150,000 of modified adjusted gross income, $300,000 joint, at $100 of deduction for every $1,000 above the threshold. Two points operators get wrong.
Read the full position, 121 more wordsShow less↓
First, only the premium portion of overtime qualifies, meaning the half in time and a half, not the whole overtime hour. Second, these are employee deductions but they create an employer reporting job: cash tips and the employee's occupation have to be reported on the W-2.
The IRS gave transition relief for 2025, so W-2 reporting did not have to change for that year, but the relief does not carry forward. For 2026 the reporting uses new W-2 codes for qualified tips and qualified overtime along with a Treasury Tipped Occupation Code, which means your payroll setup has to capture occupation and separate the overtime premium now, not next January.
Neither deduction reduces Social Security or Medicare tax on those amounts.
Who does it: In house. We set the payroll coding up so the data exists, and we prepare the business and personal returns.
Florida sales tax, the collection allowance, and the marketplace deduction
Florida Form DR-15 and DR-15DSS, Rule 12A-1.0115, Florida Form RT-6
Florida charges 6 percent state sales tax on prepared food and beverage, plus the discretionary sales surtax for the county where you operate. Miami-Dade is 1 percent. County rates differ and are republished each November on Form DR-15DSS, so a group operating across county lines cannot use one rate.
Read the full position, 186 more wordsShow less↓
You file on the DR-15, at a frequency the Department assigns based on your collections, and the return is due on the 1st and late after the 20th of the following month. If you pay electronically you have to initiate the payment and get a confirmation number by 5 p.m.
Eastern on the business day before the 20th, which is the deadline that actually catches people. File and pay electronically and on time and Florida gives you a collection allowance of 2.5 percent of the first $1,200 of tax due, capped at $30 per return. It is small, but it is free and routinely left on the table.
Separately, sales made through a marketplace provider such as a third party delivery app are reported as gross sales and then deducted, because the platform already collected and remitted the tax.
On the payroll side, Florida reemployment tax is filed quarterly on Form RT-6 against a $7,000 per employee wage base, at a 2.7 percent initial rate for new employers and an experience rate after that, which in a high turnover business is worth managing rather than accepting.
Who does it: In house. Sales and use tax and state reemployment tax are state law matters, so no federal preparer credential applies. If a Florida audit escalates to a formal protest or appeal that requires a licensed representative, that piece is coordinated through our vetted partner network under a signed engagement letter while we prepare the records behind it.
Restaurant accounting questions.
How do you handle tip reporting for restaurants?
We reconcile POS tip data with payroll, calculate FICA tip credits, ensure accurate W-2 reporting, and handle tip pooling allocations. Our systems integrate with Square, Toast, Clover, and other restaurant POS platforms.
Can you help with food cost tracking?
Yes. We help implement inventory tracking, calculate food cost percentages, identify variances, and provide monthly reports comparing your costs to industry benchmarks so you can identify waste and hold margins.
Do you work with multi-location restaurants?
Absolutely. We consolidate financials across locations, track performance by location, manage multi-state payroll, and provide comparative reporting so you can see which locations drive real profit.
When are you growing?
Two weeks. Real books, real food cost, real tip compliance. You keep the deliverables.
Curious how we stack up? See how we compare to Bench →