Restaurant Accounting in the GTA: The Numbers That Keep You Open

Restaurants rarely fail because the food was bad. They fail because nobody was watching the numbers. Great food and a full room can still lose money quietly, month after month, until the cash runs out and it’s a surprise. It shouldn’t be a surprise.

After 25 years working with GTA restaurants and food-service owners, here’s the accounting that actually keeps the doors open.

The three numbers to check every single month

You don’t need a finance degree. You need three numbers, checked monthly:

1. 1.Food and labour cost as a percentage of sales. These are your two biggest costs, and they move constantly with prices, portions, and scheduling. If you don’t know this ratio every month, you’re flying blind on the majority of your spending.
2. 2.HST collected versus HST set aside. The tax you collect isn’t your money, you’re holding it for the government. The healthiest restaurants move it into a separate account the moment it comes in, so a remittance is never a scramble.
3. 3.Cash on hand versus next month’s fixed costs. Rent and payroll don’t wait for a slow week. Knowing your runway is the difference between managing a downturn and being blindsided by one.

The HST detail that trips up owners

Sales tax in food service isn’t always intuitive. The treatment can differ between dine-in and certain takeout items, and getting it wrong is a slow leak on every order, either you’re overcharging customers or quietly eating the tax yourself. If you run a mixed model (dine-in, takeout, catering, delivery apps), it’s worth having a CPA confirm you’re charging and remitting correctly across all of them.

Tips and payroll

How you handle tips affects payroll, your staff’s pay, and your obligations as an employer. Controlled versus direct tips are treated differently, and the wrong approach can create both compliance headaches and unhappy staff. Clean this up before T4 season, not during it.

Year-end: inventory is money

Your year-end inventory count flows directly into your taxable profit, a real count, not an estimate. Restaurants that guess their inventory either overpay tax or invite questions they can’t answer. Combine an accurate count with organized records of equipment purchases (ovens, fridges, fit-outs are often significant deductions when timed and classified correctly), and year-end becomes a formality instead of a fire drill.

The common thread

Every one of these comes back to the same idea: know your numbers monthly, not annually. The owners who thrive aren’t necessarily the best cooks, they’re the ones who built a simple rhythm for watching the money and had someone in their corner who understood the industry.

General information only. Sales-tax treatment and payroll rules depend on your specific setup, confirm with a CPA.