Accounting & Bookkeeping Services for Restaurants
We handle the books for restaurants across Ontario. Daily POS reconciliation, food cost tracking, tip reporting, HST filing, payroll for kitchen and front-of-house, CRA audit defence. From $100/month. 1300+ five-star reviews.
Restaurant Accounting Is Not General Accounting
Restaurants have accounting requirements that a general bookkeeper cannot handle correctly. High-volume daily transactions from multiple POS terminals, cash and card revenue that must be reconciled to the penny every day, tip pooling and tip-out calculations that affect payroll, food cost percentages that determine profitability, liquor inventory that CRA cross-references against purchases, seasonal revenue fluctuations that require cash flow forecasting and a CRA audit risk profile that is among the highest of any industry in Canada.
We provide accounting and bookkeeping services specifically structured for restaurants. Every transaction categorized correctly. Every HST dollar tracked. Every tip reported. Every food cost percentage calculated. When CRA audits your restaurant (and cash-intensive restaurants are audited more frequently than almost any other business type), we handle the entire audit at no additional charge. We work with restaurants of every size: single-location independents, multi-location groups, fast-casual chains, fine dining, ghost kitchens, food trucks and catering operations.
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Why Restaurants Need a Specialized CPA
| Challenge | What Makes Restaurants Different | What We Do |
|---|---|---|
| Cash and card reconciliation | Restaurants process hundreds of transactions daily across multiple POS terminals, delivery apps, cash and card payments. A single day unreconciled creates cascading errors. | Daily POS-to-bank reconciliation. Every Clover, Square, Toast or Lightspeed transaction matched to the deposit. |
| Tip reporting and payroll | Tips are taxable income for employees. Controlled tips (auto-gratuity) vs. direct tips have different CPP/EI treatment. Tip pooling and tip-out percentages must be tracked and reported correctly. | Tip tracking by employee. Correct T4 reporting: controlled tips in Box 14, direct tips reported by the employee. CPP/EI calculated correctly on each type. |
| Food cost tracking | The #1 profitability metric. Industry target: 28% to 35%. Without weekly tracking, food waste, theft and portion creep erode margins invisibly. | Weekly food cost percentage calculated. Menu item costing. Variance reporting against benchmarks. Alert when food cost exceeds target. |
| Liquor inventory | CRA cross-references liquor purchases (LCBO, supplier invoices) against reported sales. A mismatch triggers an audit and assumed unreported revenue. | Monthly liquor inventory reconciliation. Purchase-to-sales ratio tracked. CRA-ready documentation maintained. |
| HST on food | Basic groceries: 0% HST (zero-rated). Prepared food and beverages: 13% HST (Ontario). Catering: 13%. The classification of each menu item must be correct. | Every menu category classified correctly. HST collected reconciled to POS. ITCs claimed on all eligible expenses. HST filed monthly, quarterly or annually. |
| Delivery app revenue | UberEats, DoorDash, SkipTheDishes deposit net amounts after commission. The gross revenue (before commission) must be reported. The commission is a separate expense. | Gross-up delivery revenue correctly. Commission separated as a marketing/delivery expense. HST on commissions tracked for ITC claims. |
| Seasonal cash flow | Restaurants experience significant revenue fluctuations: patio season, holidays, January slowdown. Without forecasting, cash shortages hit during slow months. | Monthly cash flow projections. Payroll cost managed against revenue forecasts. Tax instalment timing optimized. |
| CRA audit risk | Restaurants are classified as cash-intensive businesses. CRA uses the bank deposit method to reconstruct unreported revenue. Unexplained deposits are assessed as income. The audit risk for restaurants is among the highest of any industry. | CRA audit defence FREE for all clients. We respond to every CRA request, attend every meeting and negotiate every reassessment. Bank reconciliation documentation maintained audit-ready at all times. |
What Our Restaurant Bookkeeping Service Includes
| Service | What We Deliver | Frequency |
|---|---|---|
| Bank and POS reconciliation | Every transaction from your POS (Clover, Square, Toast, Lightspeed, TouchBistro) matched to bank deposits. Card processing fees isolated. Cash deposits verified against POS Z-reports. | Daily/weekly |
| Delivery app reconciliation | UberEats, DoorDash, SkipTheDishes statements reconciled. Gross revenue, commissions, adjustments and tips separated and categorized correctly. | Weekly |
| Accounts payable management | Supplier invoices (Sysco, GFS, local suppliers) entered and categorized. Payment tracking. Aging reports to manage cash flow and supplier relationships. | Weekly |
| Food cost calculation | Cost of goods sold (COGS) calculated as a percentage of revenue. Weekly food cost % compared against your 28% to 35% target. Variance analysis when food cost exceeds benchmark. | Weekly |
| Labour cost tracking | Total labour (wages + benefits + employer CPP/EI) as a percentage of revenue. Target: 25% to 35%. Combined with food cost for prime cost tracking (target: under 65%). | Per pay period |
| Tip tracking and reporting | Tips by employee, by type (controlled vs. direct), tip pool distribution. Correct T4 reporting at year-end. CPP/EI treatment applied correctly. | Per pay period |
| HST filing | HST collected on prepared food reconciled to POS reports. ITCs claimed on all eligible expenses (rent, supplies, equipment, professional fees). Return filed and remitted on time. | Monthly/quarterly/annual |
| Payroll processing | Pay stubs, CPP/EI/tax calculations, remittances, ROEs for staff turnover. Restaurant-specific: split shifts, overtime, statutory holiday pay, tip reporting. | Bi-weekly/semi-monthly |
| Monthly financial statements | Income statement, balance sheet, cash flow. Restaurant-specific: food cost %, labour cost %, prime cost %, beverage cost %, occupancy cost %. Benchmark comparison. | Monthly |
| T2 corporate tax return | From $400. Salary-dividend optimization. CCA on kitchen equipment, leasehold improvements and furniture. Immediate Expensing on qualifying assets. | Annual |
| CRA audit defence | FREE for all clients. We respond to every audit letter, prepare documentation, attend CRA meetings, negotiate reassessments and file objections. Bank deposit analysis prepared proactively. | As needed (FREE) |
Restaurant KPIs We Track Every Month
| KPI | Target Range | Why It Matters |
|---|---|---|
| Food cost % | 28% to 35% | Every 1% above target on $500,000 revenue costs $5,000/year. We catch food cost drift within a week. |
| Beverage cost % | 18% to 24% | Liquor margins are higher than food. A high beverage cost signals over-pouring, waste or theft. CRA cross-references against LCBO purchases. |
| Labour cost % | 25% to 35% | Includes wages, employer CPP/EI, benefits. Fine dining: higher end. Fast-casual: lower end. Overstaffing erodes margins faster than any other cost. |
| Prime cost % (food + labour) | Under 65% | The single most important metric. Above 65%: the restaurant is not sustainably profitable. We calculate this every pay period. |
| Occupancy cost % | 6% to 10% | Rent, property tax, insurance, maintenance. Above 10%: the lease may be too expensive for the revenue level. |
| Net profit margin | 5% to 15% | After all expenses including owner salary. Below 5%: operating risk. Above 10%: strong operation. We model the impact of menu price changes and cost reductions. |
| Revenue per square foot | Varies by concept | Benchmarks against similar restaurants. Identifies underperforming locations in multi-unit operations. |
| Cash-to-card ratio | Track weekly | CRA monitors the cash ratio. A sudden shift in cash percentage without explanation triggers audit scrutiny. We track and document the trend. |
We Report These KPIs Every Month. Your monthly financial package includes all 8 KPIs benchmarked against industry targets and your own historical performance. When food cost spikes or labour cost drifts above target, you see it in the financials before it damages profitability. This is what separates restaurant-specific accounting and bookkeeping from generic bookkeeping. Restaurant Services →
Restaurant Client Results
Italian Restaurant, Toronto
A single-location Italian restaurant with $680,000 in annual revenue and 14 staff had been using a general bookkeeper who was not reconciling POS to bank deposits and was reporting delivery app revenue net of commissions. We took over bookkeeping, reconciled 8 months of unreconciled transactions, corrected the delivery app reporting (recovering $4,200 in missed ITC claims on commissions), implemented weekly food cost tracking (identified 4.2% food cost overrun from portion creep), and prepared the restaurant for a CRA desk review that had already been initiated. CRA proposed $38,000 in unreported income based on bank deposits. We demonstrated that the deposits included inter-account transfers and personal loan repayments. Reassessment reduced to $4,800. Client saved $33,200.
Multi-Location Shawarma Chain, GTA
A 3-location fast-casual chain with $1,400,000 combined revenue had inconsistent bookkeeping across locations. Each location used a different POS. No consolidated reporting. No food cost tracking. Labour cost was 38% and climbing. We consolidated all 3 locations into QBO, standardized POS reconciliation across Clover and Square terminals, implemented per-location P&L reporting, tracked food cost weekly (reduced from 36% to 31% within 3 months through portion standardization and supplier renegotiation), and restructured the payroll to reduce labour cost from 38% to 33%. Annual profit improvement: $70,000 across 3 locations.
Fine Dining Restaurant, Yorkville
A fine dining restaurant with $920,000 in revenue, a high beverage program and 18 staff was paying $8,000/year to a general accounting firm that was not tracking beverage cost, not reconciling tips and not filing HST monthly (quarterly filing was causing cash flow issues due to large quarterly remittances). We switched to monthly HST filing (smoothing cash flow), implemented weekly beverage cost tracking (identified $14,000/year in liquor shrinkage from over-pouring), corrected tip reporting for 18 staff (previously unreported controlled tips created a T4 amendment for the prior year), and optimized the salary-dividend split for the owner. Annual savings: $22,400 in recovered liquor cost and tax optimization. Restaurant Services →
Ghost Kitchen, Mississauga
A ghost kitchen operating 3 virtual brands on UberEats and DoorDash with $320,000 in combined revenue had been reporting net deposits as revenue, losing $6,800/year in ITC claims on delivery commissions. No food cost tracking across the 3 brands. We separated revenue and expenses by brand, implemented per-brand P&L reporting, corrected HST to claim ITCs on all delivery commissions ($6,800 recovered), tracked food cost by brand (Brand A: 29%, Brand B: 34%, Brand C: 41%). Brand C was losing money. The owner adjusted the menu and reduced Brand C food cost to 33% within 8 weeks. We incorporated the operation (previously sole proprietor at $320,000): annual tax savings of $28,400.
CRA Audit Risk for Restaurants
Restaurants are one of CRA's highest-priority audit targets. The combination of cash revenue, high employee turnover, tip income and complex HST obligations makes restaurants a frequent selection for desk reviews, field audits and trust examination programs. The most common CRA audit method for restaurants is the bank deposit analysis, where CRA reconstructs revenue by analyzing every bank deposit and treating unexplained deposits as unreported income.
| CRA Audit Trigger | What CRA Looks For | How We Protect You |
|---|---|---|
| Unexplained bank deposits | CRA totals all bank deposits and compares to reported revenue. Personal transfers, loans and inter-account movements must be documented. Unexplained deposits = unreported income. | Every deposit categorized and documented from day one. Personal transfers flagged and supported with documentation. Audit-ready bank reconciliation at all times. |
| Cash-to-card ratio shift | CRA monitors the percentage of cash revenue over time. A sudden decrease in cash % without explanation (renovations reducing capacity, menu price increases, delivery shift) triggers scrutiny. | Cash ratio tracked weekly. Trend documented. Business explanations recorded contemporaneously. |
| Liquor purchase vs. sales mismatch | CRA obtains LCBO and supplier records and calculates expected liquor revenue based on standard pour costs. If your reported liquor sales are significantly below the calculated amount, CRA assesses the difference as unreported income. | Monthly liquor inventory reconciliation. Pour cost calculated and documented. Waste and breakage recorded. CRA-ready documentation maintained. |
| Tip underreporting | CRA compares tip income to industry averages. If your employees report significantly less tip income than comparable restaurants, CRA may reassess. | All tips tracked by employee. Controlled tips reported on T4. Direct tip reporting guidance provided to employees. Tip pool calculations documented. |
| HST/revenue mismatch | CRA cross-references HST returns with T2 revenue. If the numbers do not match, CRA opens an audit on both. | HST reconciled to POS revenue every filing period. T2 revenue reconciled to HST returns. Mismatches identified and corrected before filing. |
| Late payroll remittances | CRA treats payroll deductions as trust funds. Late remittance triggers penalties and can escalate to a trust examination of the entire payroll operation. Directors personally liable. | Payroll remitted on time every period. Remittance confirmations retained. Director liability exposure monitored. |
CRA Audit Defence Is FREE for All Restaurant Clients. When CRA selects your restaurant for a desk review, field audit or trust examination, we handle everything at no additional charge. We respond to every CRA letter, prepare every document, attend every meeting, negotiate every proposed adjustment and file objections when the reassessment is incorrect. This is included with every bookkeeping plan at no extra cost. CRA Audit Services →
Restaurant Bookkeeping Pricing
| Service | Monthly Fee | What Is Included |
|---|---|---|
| Monthly bookkeeping (base) | From $100/month | Bank and POS reconciliation, expense categorization, HST filing, monthly financial statements, food cost %, labour cost %, prime cost %. CRA audit defence FREE. |
| Payroll (first employee) | $125/month | Pay stubs, CPP/EI/tax calculations, remittances, tip tracking, T4 preparation, ROE filing. Includes all statutory calculations. |
| Payroll (each additional employee) | $75/month | Same as above for each additional staff member. Restaurant with 10 employees: $125 + (9 x $75) = $800/month. |
| Incorporation (for new restaurants) | From $35 (one-time) | Articles, share structure, minute book, BN, HST, payroll. Government fee additional. FREE for bookkeeping clients (government fee only). |
| T2 corporate tax return | From $400 | Complete T2 preparation and filing. Salary-dividend optimization. CCA on kitchen equipment and leasehold improvements. |
| CRA audit defence | FREE (for all clients) | Full audit representation: letter review, document preparation, CRA meetings, negotiation, objections. Every audit, every year. |
Example: Single-Location Restaurant, 10 Staff. Bookkeeping $100/month + payroll $800/month (1 first + 9 additional) = $900/month. CRA audit defence FREE. HST filing included. Monthly financial statements with food cost, labour cost and prime cost tracking included. Compare to the typical restaurant accounting firm charging $2,000 to $3,000/month. Know Your Exact Fee →
How We Onboard a Restaurant
Connect
We connect your POS (Clover, Square, Toast, Lightspeed, TouchBistro), bank feeds and delivery app accounts to QBO or Xero. One-time setup.
Reconcile
We reconcile all existing unreconciled months. Clean up historical categorization. Correct any HST or payroll errors from the prior bookkeeper.
Track
Weekly food cost, labour cost and prime cost tracking begins. KPI dashboard configured. Monthly financial statements delivered within 15 days of month-end.
Protect
Bank reconciliation maintained audit-ready. Liquor inventory documented. Tip reporting verified. CRA audit defence active from day one.
Restaurant Types We Serve
Frequently Asked Questions: Restaurant Accounting
Meet Your Experts
Sharad Gondaliya, CPA
Founder & Managing Director
Gondaliya CPA Professional Corporation
Sharad leads restaurant accounting strategy: incorporation structuring, salary-dividend optimization, CRA audit defence, multi-location consolidation and tax planning for restaurant owners.
Vandana, CPA
Senior Accountant
Gondaliya CPA Professional Corporation
Vandana manages day-to-day restaurant bookkeeping: POS reconciliation, food cost tracking, tip reporting, HST filing, payroll for kitchen and front-of-house staff and CRA correspondence.
What Our Clients Say
1300+ five-star reviews from business owners across Ontario and Canada.
Restaurant Bookkeeping from $100/Month.
POS reconciliation, food cost tracking, tip reporting, HST filing, payroll, CRA audit defence. Everything your restaurant needs. 1300+ five-star reviews.