Start with the daily sales report
Your point of sale system produces an end-of-day report with gross sales, discounts, comps, sales tax collected, tips, and totals by payment type. Record that summary, not each ticket. Many owners post one journal entry or sales receipt per day, or use an app connection that summarizes it for them.
The entry should split sales into food, beverages and alcohol if your menu mix matters, show sales tax as a liability, and show card tips as a liability because the money belongs to staff. Compare the deposit that lands in your bank a day or two later against the report. The gap is processor fees and timing.
Tips and payroll
Credit card tips collected for employees are not your revenue. They sit in a liability account until they are paid out through payroll or in cash with proper records. Tip pooling, tip credits and reporting rules are specific, so confirm the current federal and state rules with your payroll provider or a CPA. Never run tips through the checking account without a clear paper trail.
Food cost and inventory
Food cost percentage is cost of food sold divided by food sales. To calculate it, you need beginning inventory, purchases, and ending inventory. Many small restaurants count the walk-in and dry storage at month end and record the change. Even a rough count beats none. Track beverage cost separately, since liquor and beer run on different margins than kitchen items.
Code vendor invoices to the right cost line when they arrive. A single produce invoice and a single paper goods invoice should land in different accounts.
Prime cost and the monthly review
Prime cost is food and beverage cost plus total labor cost, including payroll taxes. It is the figure most operators watch first, because rent and prime cost together decide whether the place survives. Build a monthly page with sales, prime cost and its percentage of sales, and compare it to the prior month. A sudden jump usually points to waste, theft, price changes from a supplier or overscheduling.
Pitfalls to avoid
Do not pay vendors out of the cash drawer without logging it. Do not mix owner meals with food cost. Keep gift card sales as a liability until redeemed. Third-party delivery apps pay you net of their commission, so record gross sales and the commission separately, or your sales will look smaller than reality. Keep a calendar for sales tax and payroll deposits, because late tax payments can bring penalties and personal liability in some cases.
A weekly routine that keeps you ahead
Pick one day each week to look at the numbers. Pull sales by day, the labor report from your scheduling tool, and the week's vendor invoices. Compare labor against sales for each shift, since an overstaffed Tuesday lunch hides inside a good weekly total. Pay vendors by invoice date and terms, not by whoever calls first.
Keep a short list of cash handling rules: count the drawer at open and close, have a second person verify the deposit, and deposit on a regular schedule. Over and short amounts belong in their own account, and a pattern in that account is worth a conversation.
Common questions
How often should a restaurant close its books?
Monthly at minimum, with a weekly look at sales, labor and cash. Prime cost is hard to manage if you only see it once a quarter.
Is it fine to record only the deposits from my bank?
No. Deposits are net of fees, tips and timing, so they understate sales and hide your real costs.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.