Restaurant accountant in Hamilton

Food cost, counted rather than assumed

Food and beverage cost is the number that decides whether a restaurant year works. It is also the number most often guessed. Purchases from suppliers are not food cost; food cost is opening stock plus purchases less closing stock, and without a count the closing stock is a guess. A month-end count of the walk-in, the dry storage and the bar, even a rough one, turns food cost into a figure you can act on. It shows whether a menu price rise has kept up with suppliers, whether portioning has drifted, and whether something is walking out the back door. We build the count into the monthly close and report food and beverage cost as a percentage of sales that you can compare month to month.

Tips, tip-outs and the payroll

Tips are where restaurant payroll goes wrong quietly. The question is who controls them. Tips the employer collects and allocates, through a pool, a formula or card tips paid out on the cheque, are controlled tips: they run through payroll with income tax, CPP and EI deducted. Tips a customer hands straight to a server, with no employer involvement, are direct tips that the employee reports on their own return. Most Hamilton dining rooms have both, and a POS that pools card tips can turn what staff think of as direct tips into controlled ones. Ontario’s employment standards also limit what an employer can take out of tips. We set the tip flow up once, match it to payroll, and keep the records that show how it works. Restaurant tip reporting sets out the distinction.

The POS, the cash and the bank

A restaurant’s sales arrive in pieces: card batches settling a day or two late, cash in the drawer, delivery app payouts net of commission, gift cards sold today and redeemed next month. The POS report is the record of sales; the bank is the record of money. Reconciling one to the other each week is how you find a missing batch, a till that is short, or a delivery platform deducting more than the contract allows. Delivery payouts in particular need to be booked gross, with the commission as an expense, or both sales and HST are understated. We reconcile the POS to the bank weekly and chase the gaps while they are still easy to explain.

Gift cards deserve their own line. A card sold in December is not December revenue; it is a liability until someone eats the meal, and the HST is generally accounted for when the card is redeemed rather than when it is sold. Busy holiday sales that are booked as revenue on the day can overstate a year’s profit and the HST owing at the same time. GST/HST filing covers how the return is prepared.

HST on meals, takeout and delivery

Restaurant meals in Ontario carry 13% HST, whether eaten in or taken away, and the POS has to be set up to charge it correctly. A few items and situations are treated differently, including some low-priced prepared food and drink where Ontario rebates its provincial part at the till, so the menu set-up matters. On the other side, HST paid on supplies, equipment, rent and delivery app commissions comes back as input tax credits. A restaurant that files annually can still find itself owing a large balance at once, which is why we look at the HST account every month. Input tax credits covers what can be recovered.

Patio season, renovations and equipment

Hamilton restaurants have a real season: patios fill from spring to fall, and January is quiet. Cash planning has to carry the kitchen through the slow months, and staff levels swing with it, which means more records of employment and more payroll changes than a steady business. Renovations and equipment add another layer. A new hood, a walk-in cooler or a bar build-out is capital rather than an expense, and leasehold improvements are recovered over the lease through capital cost allowance rather than written off at once. We sort repairs from improvements at the time, so the year end does not reclassify a whole renovation. Cash flow for a seasonal business covers the slow-month plan.

What EverStone handles for you

One CPA, one fixed fee agreed up front:

• T2 corporate return and year-end financial statements
• Food and beverage cost tracked from a monthly count
• Payroll including tip treatment, remittances and year-end slips
• POS reconciled to the bank weekly, delivery apps booked gross
• HST set up correctly across dine-in, takeout and delivery
• Equipment and leasehold improvement schedules

Fixed fees, fully online

EverStone is an Abbotsford CPA firm working with Hamilton operators entirely online — video, phone and secure upload. We are three hours behind you, so something sent after close is usually answered before service the next day. Monthly bookkeeping starts at $300 a month with GST/HST filing included, and the fee is fixed and agreed before work starts. See what it costs.

Remote restaurant accounting from Abbotsford

EverStone is a sole practitioner CPA firm in Abbotsford, British Columbia, working with Hamilton clients entirely online. There is no Hamilton office and no local staff. Meetings are held by video or phone, documents are exchanged by secure upload link and e-signature, and no visit is required at any point. Daily sales, tips and food cost tracking are handled from the systems you already run, not from a filing cabinet.