Restaurant accounting services, run on prime cost.
Tip credits, sales and mixed beverage tax, COGS and inventory, weekly food and labor percentages — monthly bookkeeping and tax work for operators who need the numbers before the month closes, not after. Serving Houston, Katy, Sugar Land and Fort Bend County.
What restaurant accounting services include
Restaurants are the most operationally demanding small business most people will ever run, and the accounting has to keep the same hours. Food cost moves weekly. Labor moves daily. The two together — prime cost — decide whether the year works, and by the time an annual P&L shows it, the year is over.
A restaurant accounting engagement here covers:
- Weekly close — POS to bank deposit, so discrepancies surface in days rather than quarters
- Food and labor cost percentages reported weekly against target, not annually against hope
- Inventory and COGS counted and valued properly, rather than treating purchases as cost of sales
- Payroll, tips and service charges classified correctly, with the FICA tip credit actually claimed
- Sales and mixed beverage tax filed across the jurisdictions each location touches
- The returns — 1120-S, 1065 or 1120, plus multi-entity consolidation for operators running more than one room
Return fees follow the published fee schedule. Monthly restaurant bookkeeping runs above the standard band because weekly close and inventory work take real time.
The FICA tip credit, and why most restaurants underclaim it
The section 45B credit refunds the employer’s share of FICA paid on tips above the federal minimum wage. It is one of the largest credits available to a tipped-wage business and it is routinely left on the table — not because operators do not know it exists, but because claiming it requires tip reporting to be clean all year.
For a restaurant with $500,000 of reported tips, the credit commonly runs into the tens of thousands annually. The prerequisites are unglamorous: employees reporting tips properly, allocated tips handled correctly where reporting falls short, and payroll records that tie to the returns. Get the reporting right and the credit follows; get it wrong and there is nothing to claim.
Tips versus service charges — the classification that creates exposure
The IRS treats a tip and a mandatory service charge as different things, and restaurants misclassify them constantly. A voluntary tip is a tip. An automatic 18% on a party of eight is a service charge, which is wages — subject to payroll tax, included in the regular rate for overtime, and not eligible for the tip credit.
Tip pools have their own reporting rules, and the tip credit calculation depends on both being handled correctly. Misclassification is the single most common source of payroll tax exposure we see in restaurant files, and it compounds quietly because nothing flags it until an examination does.
Sales tax and mixed beverage tax
Texas sales tax runs 6.25% at the state level with local rates layered on top, and the combined rate depends on the location of the restaurant rather than the customer. Dine-in, take-out and delivery are not always treated identically, and third-party delivery platforms have shifted who is responsible for collecting on which orders.
Bars and restaurants serving alcohol add mixed beverage gross receipts tax and mixed beverage sales tax — two separate taxes on the same pour, calculated differently. Catering that crosses jurisdiction lines raises its own sourcing question. None of this is difficult, but all of it accrues, and a misapplied rate found three years later comes with interest.
COGS, inventory and prime cost
Most restaurants compute cost of goods sold as purchases, which is wrong in a way that costs money in both directions. Without a real inventory count and valuation at period end, COGS moves with buying patterns rather than consumption, and taxable income moves with it.
Done properly, the monthly close produces food cost and beverage cost as percentages of their own revenue lines, labor cost including the burden, and prime cost as the sum. Operators who watch prime cost weekly make different decisions than operators who see it in March — and the accounting is what makes it available.
Equipment, build-outs and depreciation
Restaurants are equipment-heavy: walk-ins, ranges, hoods, dishwashers, POS systems, furniture and the build-out itself. Most of it qualifies for accelerated depreciation, and the leasehold improvement rules for a build-out are worth planning before the work starts rather than after.
A new opening or a major renovation can generate a large first-year deduction if it is structured deliberately. The mechanics are in the bonus depreciation guide; where prior-year assets were never depreciated correctly, Form 3115 catches it up without amending.
Outsourced restaurant accounting, or a bookkeeper you manage
Independent operators generally arrive at one of two arrangements. Either they hire someone in-house and manage them, or they outsource the function — weekly close, payroll, sales tax filings, monthly reporting — and get the output without the management overhead.
Outsourced restaurant accounting tends to make sense below roughly four locations, where the volume does not justify a full-time controller but the complexity is well past what a general bookkeeper handles. Above that, operators usually want someone in the building, and the useful engagement becomes CFO-level work alongside them: forecasting, unit economics by location, and lender or franchisor reporting.
Who we work with
- Single-location independents — full service, fast casual, food trucks and ghost kitchens
- Multi-location operators — two to ten rooms, including franchisees
- Bars and cocktail concepts — with TABC and mixed beverage tax considerations
- Catering companies — contracts, deposits and event-based revenue
- Restaurant investors and silent partners receiving K-1s
- Operators preparing to buy or sell a concept
Houston and Fort Bend coverage
Based in Richmond and working with operators across Houston, Katy, Sugar Land, Rosenberg, Fulshear, Missouri City, Pearland and Cypress. Most of the work happens remotely and on a weekly rhythm; when a walkthrough of the operation is useful, it happens at the restaurant, before service.
Common questions
What does a restaurant CPA do that a general accountant does not?
Claims the FICA tip credit correctly, classifies tips against service charges, values inventory rather than treating purchases as COGS, handles mixed beverage tax alongside sales tax, and reports prime cost weekly instead of annually. A generalist will file an accurate return without any of that happening.
How much do restaurant accounting services cost?
Return work follows the published fee schedule — from $1,200 for an 1120-S, from $1,400 for a 1065. Monthly restaurant bookkeeping with weekly close, inventory and sales tax filings generally runs $800 to $1,800 a month per location, depending on volume and whether alcohol is served.
What is the FICA tip credit worth?
It refunds the employer’s share of FICA on tips above the federal minimum wage. For a restaurant with $500,000 in reported tips it commonly runs into the tens of thousands a year. Claiming it depends entirely on tip reporting being clean, which is why it is worth fixing the reporting before the return.
Are service charges taxed the same as tips?
No. A mandatory service charge is wages: subject to payroll tax, counted in the regular rate for overtime, and not eligible for the tip credit. A voluntary tip is a tip. Treating an automatic gratuity as a tip is the most common classification error in the industry.
Do you work with multi-location operators?
Yes — two to ten locations, including consolidation across entities and reporting by unit. Beyond that the engagement usually needs CFO-level involvement rather than accounting alone.