GUIDE · BOOKKEEPING FOR RESTAURANTS
Bookkeeping for restaurants,
one month at a time.
Bookkeeping for restaurants means recording sales, food and drink purchases, labor and overhead every month so the profit and loss shows prime cost, while card tips and sales tax sit as liabilities because they belong to staff and the state. ZeraBooks bookkeeping services do this from your statements, or you can keep them yourself in the ZeraBooks AI bookkeeping ledger.
Free call · quoted for your restaurant’s accounts and volume · a read-only login to watch the work
CHART OF ACCOUNTS
What chart of accounts does a restaurant need?
A restaurant chart splits sales and costs the way the kitchen and the bar run, so food cost and beverage cost can each be measured. The numbers below follow the ZeraBooks ranges: liabilities from 20000, revenue from 40000, cost of revenue from 50000, operating expenses from 60000.
Sales (40000s)
40100 Food sales, 40200 Beverage sales (split liquor, beer and wine if the bar is a big part of the business), 40300 Delivery sales, 40400 Catering and private events. Keep delivery separate so you can see what the apps cost you.
Cost of food and drink (50000s)
50100 Food cost, 50200 Beverage cost, 50300 To-go packaging if you track it apart from paper goods. Only what goes on the plate or in the glass belongs here.
Labor (60000s)
60100 Kitchen wages, 60200 Front-of-house wages, 60300 Manager salaries, 60400 Payroll taxes and benefits. Labor sits in operating expenses on a ZeraBooks profit and loss, so prime cost is these lines added to cost of food and drink.
Other operating costs (60000s)
Rent, utilities, repairs and smallwares, paper and cleaning supplies, linen, marketing, insurance, card processing fees and delivery app commissions, each on its own line.
Liabilities (20000s)
20100 Tips payable, 20200 Sales tax payable, 20300 Gift cards outstanding, 20400 Payroll liabilities. These hold money that came in but isn’t yours yet, or isn’t yours at all.
Assets (10000s)
Each bank account, cash on hand, 12100 Food inventory and 12200 Beverage inventory. How many bank accounts to run and how to match the daily deposits is covered in our guide to restaurant bank accounts.
Tell us about your books. We’ll scope the work and quote it before anything starts.
PRIME COST
What is prime cost and how do you calculate it?
Prime cost is a restaurant’s cost of food and drink plus its total labor, including payroll taxes and benefits. Divide it by total sales to get prime cost as a percentage. It is the number most operators check first each month, because it covers the two costs a manager can change by next week: what gets ordered and who is on the schedule.
Food cost and beverage cost come from purchases adjusted for inventory, not from purchases alone. A month where the walk-in was stocked up on the 30th will look expensive on purchases and normal once the count is in. That is why the inventory count, below, comes before anyone reads the percentage.
Your own trend matters more than an industry figure. A concept with a big bar program and a wood-fired pizza place will run very different numbers. Compare each month with the same month last year and with the last three months, and look into any move of more than a point or two.
NOT YOUR REVENUE
Why aren’t tips and sales tax counted as revenue?
Some of the money in a restaurant’s deposits belongs to someone else. Booking it as sales overstates revenue and leaves nothing set aside when it has to be paid out.
Card tips are owed to staff
Tips added on cards arrive inside the card deposit. Credit them to Tips payable when the deposit is recorded and debit Tips payable when they go out through payroll. The balance should fall back close to zero every pay period. One that keeps growing means tips were recorded but not paid out, or recorded twice.
The tip credit is a wage rule, not a bookkeeping entry
Under federal law an employer can pay tipped staff a cash wage as low as $2.13 an hour and count up to $5.12 an hour of their tips toward the $7.25 minimum wage (U.S. Department of Labor, Fact Sheet #15). Several states do not allow it. The books record the wages actually paid. Your payroll provider applies the rule for your state.
The FICA tip credit is claimed at tax time
Employers can claim a federal income tax credit for part of the Social Security and Medicare tax they pay on employees’ tips, on IRS Form 8846. It is worked out on the tax return, not booked each month. Clean monthly tip and payroll records make it easy for your tax preparer to calculate.
Sales tax collected belongs to the state
If the POS daily total includes tax, split it when recording sales: credit food or beverage sales for the pre-tax amount and Sales tax payable for the tax. Paying the state then clears the liability. It is not an expense.
Gift cards are sales you haven’t made yet
A gift card sold is a liability, Gift cards outstanding, until a guest redeems it. The sale is recorded on the day the card pays for a meal.
DELIVERY APPS
How do you record delivery app payouts?
Delivery apps pay out the order total minus their commission and anything else they deducted. If the deposit alone is booked as sales, both sales and costs come out too low. Here is one fictional week’s payout report, read line by line.
| Line on the payout report | Amount | Where it goes |
|---|---|---|
| Order subtotals | 2,400.00 | Delivery sales |
| Sales tax on orders | 192.00 | Collected and paid to the state by the app in this example, so not in your payout |
| Commission at 25% | (600.00) | Delivery app commissions |
| Promotion you agreed to fund | (90.00) | Marketing |
| Refund for a missing item | (35.00) | Refunds against delivery sales |
| Net payout to your bank | 1,675.00 | The deposit on your checking statement |
Record the 1,675.00 deposit as delivery sales, then once a month post one journal entry from the payout reports: debit commissions 600.00, marketing 90.00 and refunds 35.00, credit delivery sales 725.00. Sales now show the full 2,400.00. Whether the app collects the tax depends on your state and the app, so check the payout report before you assume it did.
INVENTORY AND FOOD COST
How do restaurants count inventory and work out food cost?
Food cost for the month is opening inventory, plus purchases, minus closing inventory. Purchases come from your statements and distributor invoices. The count is the one number no statement shows.
- 1
Count on the last night of the month
Count the walk-in, dry storage and bar after close on the same day every month, valued at what you paid, not the menu price. Food and beverage are counted apart.
- 2
Book purchases to cost as they happen
Distributor invoices go to food cost or beverage cost when they are recorded. On terms, enter them as bills so the invoice and its later payment are matched instead of counted twice.
- 3
Work out the month’s cost
In the worked month below: food opening inventory 8,400 plus purchases 24,050 minus closing 7,900 gives food cost of 24,550. Beverage: 6,200 plus 5,900 minus 6,000 gives 6,100.
- 4
Post the change in inventory
Food inventory fell by 500, so debit food cost 500 and credit food inventory 500. Beverage fell by 200, the same entry for 200. If a count goes up, the entry runs the other way and lowers cost.
WORKED EXAMPLE
Example: a restaurant’s month on the profit and loss
A fictional 45-seat bistro, April, after the delivery gross-up and the inventory entries. How to read each block of a report like this is in our guide to the profit and loss statement.
| Line | Amount | % of sales |
|---|---|---|
| Food sales | 74,200 | 70.4% |
| Beverage sales | 21,800 | 20.7% |
| Delivery sales | 9,400 | 8.9% |
| Total sales | 105,400 | 100.0% |
| Food cost | 24,550 | 23.3% |
| Beverage cost | 6,100 | 5.8% |
| Cost of food and drink | 30,650 | 29.1% |
| Kitchen wages | 14,300 | 13.6% |
| Front-of-house wages | 11,100 | 10.5% |
| Manager salary | 4,200 | 4.0% |
| Payroll taxes and benefits | 4,350 | 4.1% |
| Total labor | 33,950 | 32.2% |
| Prime cost | 64,600 | 61.3% |
| Rent | 9,800 | 9.3% |
| Utilities | 3,400 | 3.2% |
| Card processing fees | 2,480 | 2.4% |
| Delivery app commissions | 2,350 | 2.2% |
| Paper, cleaning and supplies | 2,100 | 2.0% |
| Repairs and smallwares | 1,450 | 1.4% |
| Marketing | 1,200 | 1.1% |
| Insurance | 1,100 | 1.0% |
| Linen and laundry | 900 | 0.9% |
| Software and accounting | 650 | 0.6% |
| Other operating costs | 25,430 | 24.1% |
| Operating profit | 15,370 | 14.6% |
Not on this report: 11,200 of card tips, which went through Tips payable and out in payroll, and 8,150 of sales tax collected, held in Sales tax payable until it is filed. Food cost against food and delivery sales together is 29.4%, beverage cost against beverage sales 28.0%. Operating profit is before depreciation, loan interest, owner draws and income tax.
IN ZERABOOKS
How does ZeraBooks do a restaurant’s books each month?
ZeraBooks works from statements and documents you send. It has no POS, delivery app, payroll or bank connection, so the month starts with uploads.
- 1
Send the month’s documents
Drop every bank and card statement and distributor invoice into your upload portal, with the POS month-end sales summary (it shows tips and sales tax) and the inventory count totals. Our team tells you what is missing.
- 2
Each account is proven to its statement
Every statement has to add up, follow on from the previous month and agree with the ledger before the month is signed off. That is how ZeraBooks proves a statement. Transfers between your own accounts are paired, not counted as sales.
- 3
Sales, costs and liabilities are categorized
Card deposits, distributor payments, payroll withdrawals and sales tax payments each go to the right account from the chart above, with questions sent to you only for what a document can’t answer.
- 4
You get the month’s reports
Profit and loss, balance sheet and cash flow on the schedule you set, visible in your read-only login as soon as they’re done. Click any number to see the transactions behind it.
How often should a restaurant count inventory?
At least once a month, on the last night, so the month’s food cost is real. Many kitchens also count their highest-cost items weekly to catch waste and over-ordering early. The books only need the month-end count.
Is a delivery app commission part of food cost?
No. It is a cost of selling, not of the food, so most restaurants put it in operating expenses on its own line. Keeping it apart from food cost lets you compare what a delivery order earns with a dine-in order.
Should tips go through the restaurant’s books at all?
Card tips do, because the money passes through your bank account before it reaches staff. Recording them in Tips payable shows they were received and paid out. Cash tips handed straight to staff never touch the books, though payroll still needs them reported.
Does ZeraBooks connect to my POS, delivery apps or payroll?
No. ZeraBooks has no POS, delivery app, payroll or bank feed connection. Statements, invoices and payout reports are uploaded, and payroll stays with your payroll provider. Its withdrawals come in on your bank statements and are categorized with everything else.
My restaurant’s books are already months behind. Where do I start?
With every bank and card statement since the last month you trust. Fixing books that were kept badly, and filling in months that were never kept, is the work described in our guide to bookkeeping cleanup.
How much does restaurant bookkeeping cost with ZeraBooks?
The done-for-you service is quoted after a free call, based on your accounts, transaction volume and any months that need catching up. Keeping the books yourself in the software is $79 a month billed annually or $149 monthly, after a 7-day trial. See ZeraBooks pricing.
WE DO YOUR BOOKS
Hand over the statements.
Get your prime cost every month.
Tell us how many accounts the restaurant runs and how far the books are behind. We’ll quote the work before anything starts.
Last updated October 14, 2026 · Written by Damin Mutti, founder of ZeraBooks