Tax and bookkeeping built for restaurant owners

Food cost and prime cost

Food cost percentage (cost of food sold ÷ food revenue) and prime cost (food + labor) are the two most important profitability metrics in food service. Most restaurant owners know their revenue. Fewer know their prime cost.

Labor cost and tip reporting

Labor is typically the largest controllable cost in a restaurant. Tip reporting — FICA tip credit, tip pooling compliance, and accurate payroll — adds complexity that generic payroll services often handle incorrectly.

Sales tax on food and beverage

New York sales tax rules for food and beverage are detailed. Prepared food is generally taxable; grocery items are generally not. Catering, delivery, and alcohol have their own rules. Misclassification creates audit exposure.

Payment processor reconciliation

Credit card processors, delivery platforms (DoorDash, Grubhub, Uber Eats), and POS systems all deposit net amounts after fees. Reconciling gross sales to net deposits — and recording processor fees correctly — is a common bookkeeping failure point.

Cash flow management

A restaurant can be profitable on paper and cash-poor in practice. Food and labor are paid weekly. Revenue recognition and actual cash collection can diverge, especially with delivery platforms that pay on weekly or biweekly cycles.

Inventory tracking

Inventory shrinkage, waste, and theft directly affect food cost. Accurate inventory tracking — even a simple weekly count — is essential for understanding true food cost and identifying problems early.

When:

Net income exceeds $60,000

Evaluate S-corp election to reduce self-employment tax

When:

Adding a second location

Review entity structure — separate LLCs or one entity?

When:

Purchasing equipment or renovating

Time purchases for Section 179 and bonus depreciation

When:

Hiring tipped employees

Set up FICA tip credit tracking — this is a real tax credit

When:

Using delivery platforms

Confirm sales tax treatment for third-party delivery sales

When:

Profitable year with cash available

Maximize retirement contributions before year-end