How do you do bookkeeping for a restaurant in QuickBooks Online?
Bookkeeping for restaurants in QuickBooks Online runs on 4 feeds. Post each day's POS summary through a clearing account split into food sales, liquor sales, sales tax, tips, and card fees; book delivery app payouts at gross with commissions as an expense; clear tip liability through payroll; and count inventory monthly to track prime cost.
Bookkeeping for restaurants breaks the first time someone clicks “Add” on a card processor deposit in the QuickBooks Online bank feed. That deposit is not a day’s sales. It includes the sales tax and card tips you collected, which belong to the state and your staff, and it arrives after processing fees have already come out.
Book deposits as sales and revenue is overstated by the tax and tips, card fees disappear from the P&L, the sales tax liability stops matching your return, and food cost percentages are calculated against the wrong number. Money reaches a restaurant through four feeds: the POS, delivery apps, tipped payroll, and vendor deliveries. Each one needs its own entry pattern, shown below with the accounts we use.
Feed 1: POS daily sales (Toast, Square, Clover)
A card batch deposit is the end of a day’s activity, not the start. A $6,227.00 deposit can contain food sales, liquor sales, meals tax, and card tips, minus the processor’s fees. Route every day through 1040 POS Settlement Clearing (Other Current Asset) so the deposit has something to match.
Record the daily sales summary
At close, pull the POS sales summary (the Z-report) and post it as a journal entry or sales receipt:
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 6 | 1040 POS Settlement Clearing | 6,227.00 | |
| Oct 6 | 1030 Cash in Register & Safe Till | 450.00 | |
| Oct 6 | 7010 POS Interchange & Card Processing Fees | 165.00 | |
| Oct 6 | 4010 Food Sales - Dine-In & Takeout | 4,200.00 | |
| Oct 6 | 4040 Distilled Spirits & Cocktail Sales | 1,400.00 | |
| Oct 6 | 2110 State & Local Meals Tax Payable | 392.00 | |
| Oct 6 | 2120 Direct Tip Liability (Credit Card Tips) | 850.00 |
Debits and credits both total $6,842.00. Sales land in food and liquor income, the 7% meals tax goes to a liability, card tips go to a liability until payroll pays them out, and the processor’s fee shows as an expense. The $6,227.00 is the card portion of the day ($6,392.00) less the $165.00 fee.
Match the deposit
When the processor deposits the $6,227.00 two days later, match the bank feed line to 1040:
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 8 | 1010 Operating Checking | 6,227.00 | |
| Oct 8 | 1040 POS Settlement Clearing | 6,227.00 |
1040 is back to $0.00, which proves every card dollar the POS recorded reached the bank. A balance left in 1040 at month-end is either a batch still in transit or a deposit that never arrived.
Account numbers come from our restaurant chart of accounts guide, and you can browse the full list in the restaurant chart of accounts explorer.
Feed 2: Delivery app payouts (DoorDash, Uber Eats, Grubhub)
Delivery platforms typically charge 15% to 30% commission depending on the plan, then deduct promotion and ad fees before paying out. When DoorDash pays $780.00 on $1,000.00 of orders, recording $780.00 as sales understates revenue by $220.00 and hides the $220.00 of commissions entirely.
Give each app its own clearing account: 1050 Delivery App Clearing - DoorDash, 1060 Delivery App Clearing - Uber Eats, and one more for any other app you use.
Record the weekly payout report
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 5 | 1050 Delivery App Clearing - DoorDash | 780.00 | |
| Oct 5 | 7020 Delivery Marketplace Commissions & Marketing | 220.00 | |
| Oct 5 | 4060 Third-Party Delivery Gross Ticket Sales | 1,000.00 |
Sales tax is left out of this example. In most states the delivery platform collects and remits tax on these orders as a marketplace facilitator, so it never reaches your books. Check the payout report: if tax is included in your payout, credit it to 2110 and remit it yourself.
Match the payout
When DoorDash deposits $780.00 into checking:
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 7 | 1010 Operating Checking | 780.00 | |
| Oct 7 | 1050 Delivery App Clearing - DoorDash | 780.00 |
Gross delivery sales and commissions now sit on separate P&L lines, so you can see what each app costs before renewing a plan.
Feed 3: Tip liability and payroll
Card tips belong to your staff. The daily entry credits them to 2120 Direct Tip Liability (Credit Card Tips), and payroll pays them out.
Service charges are different. An automatic gratuity on a large party is restaurant revenue that you choose how to distribute, not a tip, and it should not go to 2120.
Clear tips through payroll
On a biweekly payroll with $4,250.00 of card tips, $6,800.00 of kitchen wages, and $3,100.00 of front-of-house wages, $2,350.00 is withheld from employees and $11,800.00 of net pay leaves payroll checking:
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 15 | 2120 Direct Tip Liability (Credit Card Tips) | 4,250.00 | |
| Oct 15 | 6010 Kitchen Labor - Back of House Hourly | 6,800.00 | |
| Oct 15 | 6020 Service Staff Labor - Front of House Hourly | 3,100.00 | |
| Oct 15 | 2210 Payroll Tax Liabilities | 2,350.00 | |
| Oct 15 | 1020 Payroll Checking | 11,800.00 |
Employer payroll taxes post in a separate line pair to 6040 Employer Payroll Taxes (FICA, FUTA, SUTA) and 2210. If 2120 carries a balance month after month, tips collected at the register are not matching tips paid through payroll.
Tip records and taxes
Two tax rules depend on clean tip records:
- FICA tip credit (Form 8846): food and beverage businesses where tipping is customary can take a credit for the employer’s Social Security and Medicare tax on tips (IRC §45B). Tips needed to bring an employee up to the federal minimum wage as of January 1, 2007 ($5.15 an hour) do not count. C corporations and sole proprietors claim it directly; for S corporations and partnerships it passes to owners on the K-1. The credit is computed from tips employees report to you, so payroll tip totals need to agree with 2120.
- Qualified tips on Form W-2: for 2025 through 2028, tipped employees can deduct up to $25,000 of qualified tips (IRC §224, added by the One Big Beautiful Bill Act), phased out above $150,000 of modified AGI ($300,000 joint). Starting with 2026 wages, employers report qualified tips in Box 12 (code TP) and the employee’s occupation in Box 14b. Automatic gratuities are not qualified tips, which is one more reason to keep service charges out of 2120.
Feed 4: Vendor invoices, inventory, and prime cost
Food distributors such as Sysco and US Foods deliver weekly, and their invoices are the fourth feed. Posting those invoices straight to Cost of Goods Sold records what you bought, not what you used. A month-end physical count turns purchases into usage.
Monthly inventory adjustment
Cost of Goods Sold = Beginning inventory + Purchases − Ending inventory
Beginning food inventory is $12,000.00, the month’s food invoices total $24,000.00, and the month-end count is $14,500.00. Food used was $21,500.00 ($12,000.00 + $24,000.00 − $14,500.00). The invoices already put $24,000.00 in Cost of Goods Sold, so move the $2,500.00 increase in inventory back to the balance sheet:
| Date | Account | Debit | Credit |
|---|---|---|---|
| Oct 31 | 1210 Food Inventory Stock | 2,500.00 | |
| Oct 31 | 5010 Food Cost - Meats, Seafood & Dairy | 2,500.00 |
This example posts the whole adjustment to one food cost account. If you count by category, split it across 5010 to 5030 the same way. Bar inventory gets its own count and adjustment in 1220. Our journal entry for inventory guide covers the mechanics in more detail.
Prime cost
Prime cost = Cost of Goods Sold + Total labor cost
Prime cost % = Prime cost ÷ Total sales × 100
Total labor includes wages, employer payroll taxes, and benefits. A common operator benchmark is prime cost at or below 60% of sales, with food and beverage cost often near 28% to 32% and total labor near 25% to 30%, though the mix varies by concept. As prime cost moves past 65%, little is left for rent, utilities, and loan payments. Prime cost is only as accurate as the inventory count behind it, which is why the count happens every month.
Monthly close checklist for restaurants
Run these 5 steps by the 5th business day of each month:
- Clear the clearing accounts: 1040 and each delivery app account (1050, 1060) should be $0.00 or equal to deposits still in transit.
- Tie out meals tax: agree 2110 to the amount on the state sales and meals tax return.
- Reconcile tip liability: agree 2120 to the payroll summary of tips paid.
- Post inventory adjustments: count food and bar inventory and post the adjustments to 1210 and 1220.
- Reconcile bank and card accounts: complete bank reconciliations for operating checking, payroll checking, and credit cards.
If a bank account will not reconcile, start with our guide to a bank balance that won’t reconcile. The full sequence is in our month-end close checklist, and our restaurant bookkeeping services page covers what we handle on restaurant files.
When restaurant books need a cleanup first
If months of POS deposits were added as sales, delivery commissions never made it onto the P&L, or 2120 has gone negative, reconciling this month will not fix the months behind it. That takes a QuickBooks cleanup:
$99per month of backlog20% off 6+ monthsWe rebuild POS batches into daily sales entries, restore delivery app commissions at gross, and reconcile tip liability to payroll. To see how far back the problems go, send your file for a free review. Accounting firms with restaurant clients can use our white-label services for CPAs. Once the file is clean, our monthly bookkeeping service closes POS, delivery app, and inventory feeds by the 5th business day of each month.
Published October 7, 2026