The questions that tell you whether an accountant has actually run restaurant books

Restaurant accounting is not general accounting applied to a restaurant. The revenue arrives in hundreds of small pieces across three or four channels, the largest cost line is bought daily and counted by hand, payroll runs against a tip credit that changes at the state line, and the useful reporting period is a week rather than a month. An accountant who has only done professional services and retail can learn it, but you are paying for the learning.

The questions below are the ones that produce a real answer rather than a reassuring one. Ask them of any firm you are considering, including this one.

On the close

The close is the single best proxy for whether a firm is organized. A firm that cannot tell you its close date does not have a process; it has a backlog.

• What day of the month do you deliver a closed P&L and balance sheet? You want a specific number, not “as soon as we have everything.” If the answer depends on when you send things, ask what the deadline is for you and what happens when you miss it.
• Is the balance sheet closed too, or just the P&L? A P&L with an unreconciled balance sheet behind it is a guess. Ask to see the reconciliation schedules that support cash, credit cards, gift cards, sales tax and payroll liabilities.
• What do I get between closes? A period P&L thirty days after the period ended is history. Ask whether there is a weekly flash, what is on it, and what day it lands.
• Do you use a 4-4-5 or 13-period calendar, and can you run mine on one? Calendar months put a different number of weekend days in each period, which makes period-over-period comparison unreliable. A firm that has not met this question has not done multi-unit work.

On restaurant mechanics

These are the questions that separate a hospitality firm from a competent generalist. None of them are trick questions — they are daily work in a restaurant practice.

• How do you calculate and present prime cost? Prime cost is cost of goods plus total labor, and it is the number an operator actually manages. Ask whether it appears on the flash, whether it is shown against budget and last year, and whether labor includes taxes and benefits or only wages.
• How do you reconcile the POS to the bank? There should be a described route from daily sales through merchant settlement, deposits in transit, chargebacks and fees to the bank statement. “We book the deposits” is not a reconciliation.
• How do you handle third-party delivery? Delivery platforms remit net of commission, promotions, adjustments and their own marketing charges. Recording only the net remittance understates both sales and expenses and quietly ruins food cost percentage. Ask to see how gross sales and platform fees are separated.
• How do you treat gift cards and deposits? Both are liabilities until redeemed. Restaurants that book them as revenue on sale overstate a good month and understate the next one.
• How do you handle comps, voids and employee meals? These belong in defined contra-revenue or expense accounts, not netted into sales, or you lose the ability to see whether discounting is what moved the number.
• How do you count inventory, and how often? Food cost calculated from purchases alone is purchase cost, not food cost. Ask what inventory cadence they expect and what they do when a count is missed.

On payroll and tips

Payroll is where restaurant accounting gets expensive when it is done by someone learning on your books. The rules are federal, state and sometimes municipal at the same time.

• Do you take the tip credit, and how do you evidence it? The tip credit differs by state — several states do not permit one at all — and it requires notice, tracking and a top-up when tips fall short of the minimum. Ask how the shortfall is detected and corrected in the same pay period.
• Do you claim the FICA tip credit? This is a federal income tax credit on employer social security and Medicare taxes paid on tips above the minimum wage threshold. It is frequently missed, and it is money.
• Do you prepare Form 8027, and do you know whether I have to file one? Large food and beverage establishments have an annual tip reporting obligation and, where tips fall below the threshold, an allocation requirement.
• How do you distinguish a service charge from a tip? A mandatory service charge is generally wages, not a tip — which changes payroll tax treatment, overtime rate calculation and sales tax in some states. Getting this wrong is a common and costly error.
• Who handles a tip pool, and have you built one? Pool structure determines who may participate and whether a tip credit survives.

On who actually does the work

The person in the meeting is often not the person in your books. Ask directly.

• Who does my monthly work, and where are they? You are entitled to know whether the work is done in the United States and whether your data leaves the country.
• Who do I call when something is wrong on a Friday? Ask for a name and a response expectation, not a support address.
• How many restaurant clients do you currently have, and how many units across them? Unit count matters more than client count. A firm with twelve single-unit clients has not solved consolidation.
• What happens when my volume doubles? Ask what changes in the fee and what changes in the process. A firm that has never scaled a client will not have an answer.

On systems and ownership of your data

• Whose accounting file is it? The subscription should be in your name with the firm as a user. If the file lives in the firm's account, changing firms means negotiating for your own history.
• Which POS and payroll systems have you integrated before? Ask for the specific names. Integration work is where migrations overrun.
• If I leave, what do I get and how quickly? A firm that answers this cleanly is telling you it does not rely on switching costs to keep clients. We keep a full list of what to request in the accountant handover pack.

On price

Ask for a fixed monthly fee with a written scope, and ask specifically what is outside it. The common exclusions are the annual tax return, sales tax filings, payroll processing itself, cleanup of prior periods, and any month in which you add a location. None of those are unreasonable to exclude — they are unreasonable to discover in month four.

Be equally direct about cleanup. If your books are behind, a firm that quotes an ongoing monthly fee without scoping the catch-up work has either not looked or is planning to raise the subject later.

Answers that should end the conversation

• “We'll get you the P&L when it's ready.” There is no process behind this sentence.
• “Prime cost — is that the same as gross margin?” No, and the confusion is disqualifying for restaurant work.
• “We just book the net deposit from the delivery apps.” Your food cost percentage will be wrong every period.
• “You don't need to worry about the tip credit paperwork.” You do, and it is the employer who is liable.
• “We hold the QuickBooks subscription for our clients.” Ask what happens to your data if you leave. Listen carefully to the answer.

Frequently asked

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Related: Switching accountants · Restaurant accounting services · Restaurant bookkeeping · Prime cost · Tip credit by state