Restaurant Accounting Basics for Owners
Learn restaurant bookkeeping basics: what records to keep, how to reconcile cash and card takings, the monthly profit and loss and when to hire help.
Updated 6 min read
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Key takeaways
- Good bookkeeping means every sale and every cost is recorded, categorised and reconciled to the bank, every week.
- Keep sales, purchases, payroll, tax and bank records in a system that your accountant can read; most tax authorities require you to keep records for a set number of years.
- The monthly profit and loss turns records into decisions: compare it with your budget and with last year.
- Separate business and personal money, and ask a qualified accountant to set up your chart of accounts and tax filings.
In short: accounting for a restaurant means recording every sale and cost, reconciling them against the till and the bank, and producing a monthly profit and loss that you actually read. Keep the records weekly, use software your accountant can work with, and let a qualified accountant handle tax filings.
About 8 minutes to read. General information as of October 2026. This is not accounting or tax advice. Rules differ by country and business type; ask a qualified accountant.
Many restaurants are run by cooks and hosts, not accountants. That is fine, as long as the records exist and someone reads them. Messy books lead to missed tax deadlines, hidden losses and anxious conversations with the bank.
What the books do
- Show whether the restaurant made a profit this month.
- Support tax returns and payroll.
- Tell you your real food and labour cost. See food cost percentage and prime cost.
- Allow a lender or buyer to trust your numbers.
- Protect you if the tax authority checks.
The records to keep
| Record | What it shows | How often |
|---|---|---|
| Daily sales report | Sales by payment type, tax, refunds, voids and discounts | Every day |
| Cash count | Cash in the till against the report | Every day |
| Card settlements | What the provider paid into the bank, less fees | Each payout |
| Supplier invoices and credit notes | What you bought and owe | As received |
| Payroll records | Pay, tax, pension and tips | Each pay run |
| Bank statements | Every movement of money | Monthly |
| Tax returns and payments | VAT or sales tax and other taxes | By each deadline |
| Fixed asset list | Equipment bought and its cost | When you buy |
| Loans and leases | Balances and payments | Monthly |
For UK businesses, GOV.UK describes what records to keep for self employed people and companies, and for how long: see GOV.UK, record keeping for the self employed and GOV.UK, running a limited company. In other countries, ask your tax authority or accountant.
Close the day
At the end of each shift:
- Print or export the sales report.
- Count the cash and compare it with the report.
- Record any difference, with the reason and the names, and have a second person check.
- Bank the cash on a fixed schedule, with a deposit slip or a bank receipt.
- File the report.
Count with a second person present where you can, record every difference with a reason, and look for patterns rather than blaming one person.
Match the money weekly
Once a week, compare three sets of numbers.
- Sales in your system against the money received: cash banked plus card payouts plus online payouts, less fees.
- Supplier invoices against deliveries and statements.
- Payroll against the rota.
Any gap is a question. Small gaps often come from timing, such as a card payout arriving two days later, but repeated gaps are signs of leakage, error or fraud.
Organise your chart of accounts
A chart of accounts is the list of categories for sales and costs. Keep it simple and consistent with your budget.
- Sales: food, drink, takeaway, delivery, catering, other.
- Cost of sales: food, drink, packaging.
- Labour: wages, employer taxes, pension, agency, staff meals.
- Occupancy: rent, rates, service charge, insurance.
- Operating costs: utilities, repairs, cleaning, software, marketing, card fees, delivery commission.
- Other: professional fees, interest, depreciation.
Ask your accountant to set this up so it matches the tax return and your budget.
Read the monthly profit and loss
At the end of each month, get a profit and loss statement. Check:
- Sales against last month, last year and budget.
- Cost of sales as a percentage of sales.
- Labour as a percentage of sales.
- Prime cost (food plus labour).
- Occupancy and other costs against budget.
- Operating profit, and what is left after tax and loan repayments.
See weekly numbers for the weekly rhythm that keeps the monthly figure no surprise.
Profit is not cash
A profitable month can still leave you short. Equipment purchases, loan repayments, tax payments, stock building before a busy season and slow payouts affect cash but not profit. Keep a 13 week cash forecast. See cash flow.
Tax: general points
Restaurants often deal with sales taxes or VAT, payroll taxes, corporate or personal income tax, local property taxes and licences. Each has its own deadlines.
- See VAT and sales tax basics and the UK specific VAT on takeaway food.
- Keep payroll and tips records. See tips and service charges.
- Put the deadlines in a shared calendar.
- Set money aside for tax each week in a separate account if your accountant advises it.
Do not guess tax treatment. Ask a qualified accountant about your business.
Use software
Cloud accounting software that connects to your bank and imports daily sales cuts the typing and the errors. Pick one that your accountant already uses. With DineHarbor, reports give you sales by day and product from the till, which you can use to reconcile against the bank and your accounting package. Check the export options you need before you choose.
Separate business and personal money
Open a business bank account. Pay yourself on a regular schedule, whether as wages or drawings as your accountant advises, and never pay personal costs from the till. Mixed money makes accounts unreliable and can create tax problems.
When to hire help
- A bookkeeper can enter and reconcile weekly if you do not enjoy it.
- An accountant files taxes, advises on structure and prepares annual accounts.
- A finance review once a year, even if you do the rest yourself, catches mistakes early.
Ask what they know about restaurants, what software they use and how they charge. See tech checklist for connecting systems.
A simple weekly routine
- Close each day and bank the cash.
- Once a week, enter or check invoices and reconcile the bank.
- Review sales, food, labour and prime cost.
- Flag any gap and find the cause.
- Each month, read the profit and loss against the budget.
- Each quarter, meet your accountant.
Want your sales data in one clear place? Start the 30 day free trial with no card needed.
Questions and answers
Do I need an accountant for my restaurant?
Most owners do, especially for tax filings, payroll and annual accounts. A good accountant can set up your chart of accounts and review it each quarter, while you or a bookkeeper keep the records weekly.
How long must I keep restaurant records?
It depends on the country and the type of record. In the UK, HMRC expects business records to be kept for at least 5 years after the 31 January submission deadline of the relevant tax year for self assessment, and other periods apply to companies and VAT. Check your tax authority.
What is a profit and loss statement?
A summary of sales, costs and profit over a period, usually a month. It tells you whether the business made money, before looking at cash and loans.
What is the difference between profit and cash?
Profit counts income and costs when they are earned or incurred. Cash counts money when it moves. You can be profitable and short of cash, for example if you pay suppliers faster than customers pay you or if you buy equipment.
Should I use accounting software?
Yes, for most restaurants. Cloud accounting software that connects to the bank and imports daily sales saves time and errors. Choose one your accountant supports.
See it in DineHarbor
About the author
Editorial team
The DineHarbor team writes this blog for restaurant owners and managers. Every article is checked against the product before it is published, so what we describe is what the software does.
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