Bookkeeping for Restaurants in Ontario
Restaurant books are different from every other business. POS reconciliation, tip reporting, food cost tracking, daily cash handling, HST on prepared food, liquor inventory, payroll for tipped employees and COGS management. We handle it all so you can focus on your guests. Flat fee. Done by a licensed CPA.
What Is Included in Our Restaurant Bookkeeping Service
Everything your restaurant needs to stay organized, compliant and profitable. No hourly billing. No surprises.
| Included | What We Do |
|---|---|
| POS system reconciliation | We reconcile your POS reports (Square, Clover, Toast, Lightspeed, TouchBistro) against your bank deposits daily. Every dollar from dine-in, takeout, delivery and catering is accounted for. |
| Tip tracking and reporting | We track tips received through credit/debit, cash tips declared by staff and tip-outs to kitchen and support staff. All tips are recorded for T4 reporting and CRA compliance. |
| Food cost and COGS tracking | We categorize every food and beverage purchase by category (proteins, produce, dairy, dry goods, beverages, alcohol) and calculate your food cost percentage weekly or monthly. Target: 28% to 35% for full-service restaurants. |
| Liquor inventory and pour cost | We track liquor purchases against POS liquor sales to calculate your pour cost. Target: 18% to 24%. Variances above target indicate over-pouring, waste or theft. |
| HST filing (prepared food is taxable) | Prepared food and beverages are taxable at 13%. We file your HST returns, claim ITCs on all business purchases and reconcile delivery platform remittances (UberEats, DoorDash, SkipTheDishes). |
| Payroll processing for restaurant staff | Full payroll: servers, bartenders, cooks, dishwashers, managers. CPP, EI, income tax, tip reporting, ROEs, T4s. Bi-weekly or semi-monthly processing. From $125/month. |
| Delivery platform reconciliation | UberEats, DoorDash, SkipTheDishes and other platforms deposit net amounts after commissions, marketing fees and adjustments. We reconcile gross sales, commissions, taxes and net deposits for each platform. |
| Accounts payable management | We track invoices from food distributors (Sysco, GFS, Flanagan), beverage suppliers, linen services, cleaning and maintenance. Payment schedules managed to preserve cash flow. |
| Monthly financial statements | Income statement with food cost %, labour cost %, prime cost, occupancy cost and net profit. Balance sheet with current assets, liabilities and owner's equity. Delivered by the 15th of the following month. |
| Annual T2 corporate tax return | Filed FREE for every restaurant bookkeeping client. No additional charge. |
For our complete restaurant accounting, tax planning and advisory services, visit our dedicated restaurant accounting page.
How Restaurant Bookkeeping Works
Four steps. We integrate with your POS. You run your restaurant.
Connect POS
We connect your POS (Square, Clover, Toast, Lightspeed, TouchBistro) to QBO or Xero. Daily sales, tips and payment methods sync automatically.
Categorize and Reconcile
We reconcile POS reports to bank deposits, categorize food and beverage purchases by type and track delivery platform settlements.
Report Key Metrics
Food cost %, labour cost %, prime cost, pour cost, average ticket size and revenue per seat. Monthly financials delivered by the 15th.
File and Comply
HST filed quarterly or monthly. Payroll processed bi-weekly. T4s issued annually. T2 filed FREE. CRA-ready at all times.
Restaurant Bookkeeping from $150/Month
POS reconciliation, food cost tracking, HST filing, payroll and T2. All included. Flat fee.
Why Restaurant Bookkeeping Is Unlike Any Other Business
A typical small business has 50 to 200 transactions per month. A restaurant has 50 to 200 transactions per day. Add cash handling, tipped employees, perishable inventory, delivery platform settlements, liquor tracking and HST on every prepared item, and you have the most bookkeeping-intensive small business category in Canada.
| Challenge | Why It Matters | How We Handle It |
|---|---|---|
| Transaction volume | A busy restaurant processes 3,000 to 6,000 transactions per month across dine-in, takeout, delivery, catering and bar. Each must be categorized, reconciled and matched to a bank deposit. | POS-to-QBO/Xero integration automates daily sales sync. We reconcile payment method totals (cash, credit, debit, delivery apps) to bank deposits every week. |
| Cash handling | Cash sales create the highest audit risk of any business type. CRA compares cash sales percentages to industry averages. A restaurant with 5% cash in an area where competitors report 15% will trigger a review. | Daily cash reconciliation: POS cash sales compared to cash register count, bank deposits and safe count. Overage and shortage tracked and documented. CRA-ready cash trail maintained. |
| Tipped employees | All tips (credit card and declared cash) are taxable income to the employee. The employer must report tips on T4 slips. Under-reported tips trigger CRA payroll audits for the restaurant. | Credit card tips tracked automatically from POS. Cash tip declarations collected from each employee per shift. Tip-outs to kitchen and support staff documented. All tips reported on T4s. |
| Perishable inventory | Food spoils. A restaurant cannot do a full inventory count monthly the way a retailer does. Waste, spoilage and theft reduce margins without appearing in purchase records. | Weekly food cost percentage calculated from purchases and sales. Variances flagged immediately. Waste logs reviewed monthly. Sudden cost spikes investigated. |
| Delivery platform settlements | UberEats, DoorDash and SkipTheDishes deposit net amounts after commissions (15% to 30%), marketing fees, error adjustments and tax remittances. The gross sales never appear in the bank. | Each platform reconciled separately: gross orders, commission deducted, marketing fees, tax adjustments and net deposit matched to the bank. Revenue recorded at gross, commissions as an expense. |
| Multi-location complexity | Multi-location restaurant groups need consolidated financials plus per-location P&Ls. Each location has its own POS, bank account, staff and inventory. | QBO or Xero configured with location tracking or class tracking. Consolidated and per-location financials delivered monthly. Inter-location transfers documented. |
Food Cost Management: The Number That Determines Your Profit
Food cost percentage is the single most important financial metric in a restaurant. It measures how much of every dollar of food revenue goes to purchasing the ingredients. The industry target for a full-service restaurant is 28% to 35%. Fast casual targets 25% to 30%. Fine dining can run 30% to 40% depending on the concept. A 2% food cost reduction on $800,000 in annual food revenue is $16,000 in additional profit.
| Restaurant Type | Target Food Cost % | Target Liquor Pour Cost % | Target Labour Cost % | Target Prime Cost % |
|---|---|---|---|---|
| Fast casual (chipotle-style, poke, pizza counter) | 25% | N/A | 25% | 50% |
| Casual dining (family restaurants, pubs) | 30% | 20% | 30% | 60% |
| Full-service dining | 32% | 22% | 32% | 64% |
| Fine dining | 35% | 18% | 35% | 70% |
| Quick-service / fast food | 28% | N/A | 22% | 50% |
| Bar / lounge (food secondary) | 28% | 20% | 28% | 56% |
We Calculate Your Food Cost Every Month: Most restaurant owners know their food cost is "around 30%." We calculate the exact number for every food category (proteins, produce, dairy, dry goods, beverages, alcohol) every month by reconciling your food purchases against your POS food sales. When your protein cost spikes from 38% to 44% in a single month, we flag it the same week, not at year-end. That early warning is the difference between a profitable quarter and a losing one.
Know Your Food Cost Every Month. Not Just at Year-End.
Weekly food cost tracking, pour cost analysis, COGS by category and variance alerts. All included in our bookkeeping.
HST Rules for Restaurants in Ontario
| Item Sold | HST Status | Key Rule |
|---|---|---|
| All prepared food and beverages served in the restaurant | Taxable at 13% | Every menu item (food and drink) served for consumption on premises is taxable. No exceptions. |
| Takeout food | Taxable at 13% | Prepared food sold for takeout is taxable. The method of consumption (dine-in or takeout) does not change the HST status for restaurants. |
| Delivery orders (UberEats, DoorDash, SkipTheDishes) | Taxable at 13% | Delivery orders are taxable. The delivery platform collects HST from the customer and remits it. The restaurant must still track gross sales and HST for reconciliation. |
| Catering | Taxable at 13% | All catering revenue is taxable. HST charged on the full catering invoice including food, service, delivery and setup fees. |
| Alcoholic beverages | Taxable at 13% | All liquor, beer, wine and cocktails are taxable. HST calculated on the menu price (which already includes the LCBO/Beer Store markup). |
| Gift cards sold | Not taxable at time of sale | Gift card sales are not taxable. HST is charged when the gift card is redeemed and the food or beverage is purchased. |
| Food purchases from suppliers (raw ingredients) | Most are zero-rated (0% HST) | Basic groceries (raw meat, produce, dairy, grains, flour, eggs) are zero-rated. You pay no HST to the supplier. However, snack foods, carbonated beverages and prepared ingredients from suppliers are taxable at 13%. |
| Equipment, furniture, kitchen supplies | Full ITC claimable | HST paid on ovens, refrigerators, dishwashers, tables, chairs, utensils, cleaning supplies and renovation costs is fully recoverable as an ITC. |
The Delivery Platform HST Trap: UberEats and DoorDash collect HST from the customer and remit it to CRA on the restaurant's behalf. But the commission they charge you (15% to 30%) also includes HST. That commission HST is an ITC you can claim back. Many restaurants miss this because the delivery platform settlement reports are confusing. We reconcile every platform to capture the commission ITCs. On $200,000 in annual delivery revenue at a 25% commission rate, the recoverable HST on commissions is approximately $6,500 per year.
Tip Reporting and Payroll for Restaurant Staff
| Tip Component | CRA Requirement | How We Handle It |
|---|---|---|
| Credit/debit card tips | Fully traceable through POS. Must be reported as employee income on T4 slips. Employer must include in payroll records. | Extracted from POS reports automatically. Allocated to each server based on POS assignment. Included in payroll calculations. |
| Cash tips declared by employees | Employees are required to declare cash tips to the employer. The employer must include declared tips on the T4. Under-declaration is the employee's responsibility, but CRA can audit the restaurant's tip reporting. | Tip declaration forms collected per shift. Declarations logged and included in payroll. Documentation maintained for CRA review. |
| Tip-outs to kitchen and support staff | Tip-outs are taxable income to the receiving employee. The serving staff member who pays the tip-out reduces their reported tips by the amount tipped out. | Tip-out percentages configured per restaurant policy. Net tips calculated for each employee after tip-outs. Kitchen and support staff tip-out income reported on their T4s. |
| Controlled tips (employer-mandated gratuity) | Automatic gratuities (e.g., 18% on parties of 8+) are controlled tips. These are considered part of the employer's revenue and are subject to CPP and EI. Different from voluntary tips. | Auto-gratuities separated from voluntary tips in the POS. Controlled tips processed through payroll with CPP and EI deductions. Voluntary tips reported without employer CPP/EI. |
| Tip pooling | If the restaurant operates a tip pool, the pooled amount is distributed according to the pool formula. Each employee's share is their taxable tip income. | Pool formula configured in bookkeeping. Distribution calculated per shift or per pay period. Each employee's share documented and reported. |
CRA Payroll Audits Target Tip Reporting: Restaurants are one of the highest-audited industries for payroll compliance. CRA specifically examines whether all tips (credit card and cash) are being reported on T4 slips. If your POS shows $180,000 in credit card tips but only $120,000 appears on T4s, CRA will assess the $60,000 difference as unreported income, plus penalties and interest. We reconcile POS tip data against payroll records every pay period to ensure 100% of traceable tips are reported. This prevents the audit before it starts.
Restaurant Financial Metrics We Track Monthly
| Metric | What It Measures | Industry Target |
|---|---|---|
| Food cost % | Cost of food ingredients as a percentage of food revenue | 28% to 35% |
| Pour cost % (liquor) | Cost of liquor, beer and wine as a percentage of beverage revenue | 18% to 24% |
| Labour cost % | Total labour cost (wages, CPP, EI, benefits, WSIB) as a percentage of total revenue | 25% to 35% |
| Prime cost % | Food cost + labour cost as a percentage of total revenue. The single most important profitability indicator. | 55% to 65% |
| Occupancy cost % | Rent, property tax, insurance and CAM charges as a percentage of total revenue | 6% to 10% |
| Net profit margin | Net profit after all expenses as a percentage of total revenue | 5% to 15% |
| Average ticket size | Average revenue per customer transaction | Varies by concept. Tracked for trend analysis. |
| Revenue per seat | Total revenue divided by number of seats. Measures space utilization efficiency. | $40,000 to $80,000 per seat per year (full-service) |
| Break-even daily revenue | The daily revenue required to cover all fixed and variable costs with zero profit | Calculated per restaurant based on fixed costs and contribution margin. |
We deliver these metrics in your monthly financial package by the 15th. For tax planning, menu costing advice and restaurant-specific advisory beyond bookkeeping, visit our full restaurant accounting and tax services page.
The 10 Bookkeeping Errors We Prevent for Restaurant Clients
| # | Error | What It Costs | How We Prevent It |
|---|---|---|---|
| 1 | Not reconciling POS daily sales to bank deposits | Undetected cash shortages, double charges, refund errors and delivery platform discrepancies accumulate. $5,000 to $20,000 per year in undetected variances. | Weekly POS-to-bank reconciliation. Every payment method (cash, credit, debit, delivery apps) matched to deposits. |
| 2 | Not tracking food cost by category | Cannot identify which menu items are profitable. Overall food cost may be "30%" but proteins are at 42% (destroying margin) while produce is at 18% (subsidizing). | Food purchases categorized by type (proteins, produce, dairy, dry goods, beverages, alcohol). Per-category food cost calculated monthly. |
| 3 | Not claiming delivery platform commission ITCs | $3,000 to $8,000 per year in lost HST credits on UberEats, DoorDash and SkipTheDishes commissions. | Every delivery platform statement reconciled. Commission HST identified and claimed as ITCs every filing period. |
| 4 | Under-reporting employee tips on T4s | CRA payroll audit. Reassessment of unreported tips as employer income. Penalties and interest. Reputation damage. | POS tip data reconciled to payroll records every pay period. 100% of credit card tips and declared cash tips reported on T4s. |
| 5 | Not separating controlled tips (auto-gratuity) from voluntary tips | CPP and EI not deducted on controlled tips. CRA assesses retroactive employer CPP/EI with penalties. | Auto-gratuities identified in POS. Processed through payroll with full CPP and EI deductions. Voluntary tips handled separately. |
| 6 | No cash reconciliation process | CRA compares your cash sales percentage to industry averages. A restaurant reporting 3% cash sales in a neighbourhood averaging 12% triggers an audit. | Daily cash count documented. POS cash sales matched to cash register count and bank deposits. Overage/shortage log maintained. |
| 7 | Not tracking waste and spoilage | 2% to 5% of food purchases lost to waste without documentation. $4,000 to $20,000 per year at a $400,000 food cost. | Waste log provided at onboarding. Spoilage tracked monthly. Variances above 2% flagged for investigation. |
| 8 | Mixing personal and restaurant bank accounts | CRA pierces the corporate veil. All personal expenses reclassified as shareholder benefits. HST ITCs denied on personal transactions. | Dedicated corporate bank account and credit card. Owner draws processed as salary or dividends only. No personal purchases through the restaurant account. |
| 9 | Not filing HST on time | 5% immediate penalty + 1% per month on HST owing. On $30,000 HST balance: $1,500 penalty on day one. | HST filing deadlines tracked. Returns filed 5 business days before the deadline. ITCs maximized every period. |
| 10 | Using a general bookkeeper who does not understand restaurant operations | POS not reconciled. Tips not tracked. Food cost not calculated. Delivery platforms not reconciled. Year-end cleanup costs $5,000 to $10,000. | Our bookkeeping team handles restaurant clients exclusively in a dedicated workflow. POS integration, tip tracking, food cost and delivery platform reconciliation are standard, not custom setups. |
Transparent Flat-Fee Pricing for Restaurant Bookkeeping
No hourly billing. No hidden fees. No year-end surprises.
| Service | Fee | Includes |
|---|---|---|
| Monthly bookkeeping (single location) | From $150/month | POS reconciliation, food cost tracking, delivery platform reconciliation, bank reconciliation, expense categorization, monthly P&L with restaurant metrics, HST filing |
| Monthly bookkeeping (multi-location) | From $250/month per location | Same as single location, plus consolidated financials, inter-location transfers, per-location P&L, central purchasing tracking |
| Payroll processing (restaurant staff) | From $125/month | Bi-weekly or semi-monthly payroll, CPP, EI, income tax, tip reporting, tip-out calculation, ROEs, T4s. WSIB reporting included. |
| GST/HST filing | From $150/filing | Quarterly or monthly HST return, delivery platform ITCs, equipment ITCs, renovation ITCs. Filed on time every period. |
| Annual T2 corporate tax return | FREE | Included for every restaurant bookkeeping client at no additional charge. |
| Incorporation (new restaurant) | $35 | Federal incorporation, Articles, minute book, CRA registration (BN, RC, RP, RT). Incorporate for $35 → |
For restaurant tax planning, menu costing, franchise accounting and CRA audit defence, visit our restaurant accounting and tax services page.
Know Your Exact Fee Before We Start
Flat fee, fixed in advance. 30-Day Money-Back Guarantee. 60-Day Fees-Matching Policy.
Restaurant Bookkeeping: Cities We Serve
We handle restaurant bookkeeping across every Ontario city and Canada. No distance limits, no extra fees.
Frequently Asked Questions: Restaurant Bookkeeping
Restaurant Bookkeeping from $150/Month. T2 Filed FREE.
Gondaliya CPA handles restaurant bookkeeping for single-location and multi-location restaurants across Ontario. POS reconciliation, food cost, tips, HST, payroll. All included. 900+ five-star reviews.