Restaurant accounting brings sales, stock, payroll, supplier bills and taxes into a reliable set of financial records. A busy dining room or a healthy bank balance does not show whether the restaurant is making a sustainable profit.
Start by reconciling what was sold, what was collected and what the business spent. Smartbook's main service is ongoing accounting and financial management, which helps owners turn those records into decisions about costs, staffing and cash rather than waiting for the tax deadline.
Reconcile sales across every channel
A restaurant may collect cash, card payments, vouchers and delivery-platform payouts. The amount reaching the bank can differ from recorded sales because of platform charges, card fees, refunds and settlement timing. Record gross sales and the relevant deductions rather than treating each payout as the entire sale.
Keep point-of-sale reports, card settlement reports and delivery statements. Match them to the bank and investigate differences. If the same sales are imported through the till system and a payment integration, prevent duplicate entries.
Document voids, refunds, discounts and complimentary meals. Those transactions affect revenue and may reveal training or control problems. Staff should know who can authorise adjustments and what supporting information must be kept.
Understand the cost of food and drinks
Purchases alone do not tell you the cost of what was sold. Stock on hand, wastage, staff meals and transfers between locations all affect the picture. Use consistent stock records and compare physical counts with what the system expects.
Recipe costing helps explain how ingredients relate to menu prices, but keep it connected to actual supplier invoices. Price changes, portion sizes and waste can turn a profitable-looking dish into a weak contributor. Do not set a menu using an industry margin claim that does not reflect your own costs.
Separate food, beverages and other stock categories where that helps decisions. Look at costs alongside sales mix rather than only the overall total. A change in the mix can explain a margin change even when the restaurant's turnover looks stable.
Put payroll and tips on a clear footing
Keep reliable records of shifts, approved hours, leave and employee changes. Restaurant payroll can become difficult when rosters, payslips and bank payments do not agree. Separate employees from genuine contractors using the actual working arrangement, not a convenient label.
Tips and service charges need a documented process showing what was collected, who is entitled to it and how it is paid. Their payroll and tax treatment depends on the facts. Do not assume that every tip should be company revenue or that every payment to staff is tax free.
The SARS EMP201 guidance describes employer declarations and allocation of payments. Employment requirements and any applicable bargaining arrangements must also be assessed separately.
Check VAT by transaction, not by habit
Where the restaurant is VAT registered, identify the VAT treatment of its sales and purchases correctly. Food-service transactions, supplier invoices, assets and platform charges may need different consideration. A standard tax code attached to every bank line can hide mistakes.
The standard VAT rate is 15%. Qualifying input deductions still need the appropriate evidence. The usual entertainment exclusion does not mean a restaurant can never deduct VAT on inputs used in its taxable catering trade; equally, operating a restaurant does not make every personal meal deductible.
The SARS VAT guide for vendors explains those distinctions and exceptions. Have your accountant review private use, staff benefits and unusual purchases rather than relying on the description printed on the receipt.
Watch cash separately from profit
A profit report includes transactions that may not yet have been paid. Cash may be tied up in stock, deposits and customer balances, while wages and supplier payments are already due. Loans and owner contributions can make the bank look healthier without creating profit.
Maintain a cash forecast using expected receipts and planned payments. Include rent, payroll, suppliers, loan repayments and tax commitments. Mark uncertain amounts clearly and update the forecast when trading or payment terms change.
Do not spend tax money simply because it remains in the bank between filing periods. Owners should understand which part of the available cash is needed for upcoming obligations. A cash forecast is useful only when it connects to the actual books and known commitments.
Ask for reports you can act on
The monthly accounts should explain sales, cost of sales, payroll and operating expenses. A balance sheet helps show loans, supplier balances and taxes payable. Review unusual movements rather than looking only at the final profit figure.
If you have several locations, decide how shared costs will be allocated and keep the method consistent. A branch can appear profitable if head-office costs disappear into an unreviewed account. Compare like periods and explain closures, seasonal trading or menu changes.
Useful discussions end in specific actions. That might mean investigating stock losses, changing a purchasing process or adjusting staff scheduling. Avoid inventing a target food-cost or wage percentage without first understanding the restaurant's business model.
Keep operating compliance separate but connected
Company registration is not the same as permission to operate food premises. Municipal business licensing, food-premises requirements and liquor rules may apply depending on activities and location. These matters need their own evidence and responsible person.
The City of Cape Town's food-premises guidance distinguishes a Certificate of Acceptability from the business licence. Confirm the requirements with your municipality rather than treating another city's checklist as nationally identical.
Keep approvals and renewal instructions with the restaurant's records. Accounting support can help budget and organise information, but it does not replace a health inspection, legal licence or sector-specific professional.
Frequently asked questions
Can I record delivery-platform payouts as sales?
Not without reconciling the statement. The payout may be net of charges, refunds and timing differences that need separate entries.
Why does the restaurant show profit but little cash?
Stock, unpaid balances, debt repayments and timing differences can use cash without matching the current profit figure.
Are all tips handled the same way?
No. Document the collection and distribution arrangement, then review its payroll and tax treatment.
Does my accountant issue a food licence?
No. Licensing and food-premises approvals come from the relevant authorities. Accounting support helps maintain the financial records around the business.
Need an accountant?
Smartbook supports bookkeeping, payroll, VAT, tax and financial reporting for South African businesses. We help organise the numbers so you can see what your restaurant earns, owes and can afford. See how our accounting service works.