406 Consulting Group
Restaurant and hospitality accounting — prime cost, POS reconciliation, tip reporting
Industry

Great Food. Profitable Business. Both Are Possible.

Restaurants and hospitality businesses run on thin margins, complex payroll, and daily cash management. Most accountants don't understand the industry. We do — and we build the financial systems that keep your doors open and your margins intact.

Why Hospitality & Food & Beverage need specialized accounting

Hospitality is one of the most financially complex industries in small business. The challenge isn't cooking great food or delivering great service — it's managing the financial systems underneath. Food cost should run 28–35% of revenue. Labor is typically 30–35%. Combined, "prime cost" determines whether a restaurant thrives or struggles. But most operators don't track it accurately.

Then there's payroll complexity. Tip reporting, FICA tip credits, tip pooling compliance, and service charge vs. tip distinctions are a minefield. Add seasonal cash flow into the mix — Montana restaurants face extreme seasonality. A Glacier-area restaurant might do 70% of its annual revenue in 12 weeks.

Most operators don't have the systems to answer simple questions: which revenue stream is actually profitable? Is the F&B department worth subsidizing? Can the business support a second location? We build the financial infrastructure that lets you answer those questions and run the business accordingly.

Common pain points we solve

Food cost & waste tracking: should run 28–35% of revenue, but most restaurants don't track it accurately
Labor cost management: typically 30–35% of revenue, can push to 45%+ without anyone noticing
Cash handling & POS reconciliation: one of the most error-prone processes in the industry
Tip reporting & payroll compliance: FICA tip credits, tip pooling rules, service charges vs. tips are a minefield
Multi-location complexity: a second location doubles your accounting complexity
Alcohol & excise tax compliance: TTB reporting and state liquor compliance that general accountants miss
Seasonal cash flow swings: peak summer/ski season followed by slow shoulder months
Vendor payments & AP timing: F&B vendors often require COD or net-7 terms

What we do for Hospitality & F&B

  • Monthly bookkeeping & bank reconciliation
  • POS system reconciliation & cash handling review
  • Food cost & labor cost reporting
  • Tip reporting & FICA tip credit optimization
  • Payroll processing & tip compliance
  • Excise tax tracking & TTB reporting (breweries/distilleries)
  • Inventory costing & recipe cost analysis
  • Seasonal cash flow forecasting
  • Multi-location accounting & consolidated reporting
  • Vendor AP management & payment timing
  • Year-end tax preparation & entity structure review

The metrics we track

  • Prime cost (food + labor) actively managed against target range
  • Weekly food cost report with variance analysis by category
  • Daily POS reconciliation with variance log
  • Tip reporting compliant with FICA tip credit claimed
  • 13-week cash flow forecast with seasonal reserve planning
  • Labor cost as percentage of revenue by department
  • Multi-location consolidated P&L with per-location visibility

Frequently asked questions

Related services

BookkeepingPayrollControllerCFOAdvisoryTax Preparation

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