How long should a restaurant month-end close take?

Of the firms on this site, Harmony Group publishes a 10-day hard close. Most others do not publish a deadline. The faster you count inventory and collect invoices, the sooner the close can finish.

What is a POS clearing account?

An account that holds what the POS says you sold until the deposits arrive. When fees, tips, tax, and payouts are booked, it should return to zero. What is left is what still needs explaining.

Do I need to count inventory every month?

Yes, if you want food cost to be usage. Without a count, the P&L shows what you bought, not what you used.

Who should sign off on the close?

An owner, an in-house controller, or the firm that keeps the books. Someone has to read the P&L and the reconciliations and accept them before the period is locked.

Restaurant month-end close checklist

Before the last night of the month

Fix the cutoff: the last business day and the hour it ends, for every location.
Schedule the inventory count for the same night at every location, after close. Counts on different days compare different periods.
Tell managers when invoices and credit memos are due.
Know which pay period crosses month-end.

Sales and tenders

Every POS business day in the month is present, for every location.
Post sales as a daily or period sales journal through a POS clearing account. See cash flow for why the deposit is not the sale.
Card deposits tie to the clearing account after processor fees, refunds, and chargebacks.
Cash deposits tie to the drawer counts. Record cash over or short.
Sales tax collected sits in a liability account, not in sales.
Gift card sales go to a liability. Redemptions reduce it.
The clearing account is at zero, or each remaining amount has a reason and a date.

Delivery platforms

Reconcile each platform’s payouts to its orders in the POS, per location.
Book gross sales, then commissions and marketing fees as expenses, so sales stay comparable across channels.
Accrue delivery sales earned in the month but paid out next month.

Inventory and cost of goods

Enter the count by location, split into food, beverage, and other.
Food cost is usage: beginning inventory, plus purchases, minus ending inventory. See food cost.
Compare each location’s food and beverage percentage to last month and to the other locations. Recount outliers before you book them.

Payables

Every invoice dated in the month is entered, even if you pay it next month.
Accrue deliveries received without an invoice.
Record vendor credits and returns.
Accrue recurring costs not yet billed, such as utilities and repairs.

Payroll and tips

The payroll register ties to the general ledger, by location, including employer taxes and benefits.
Accrue wages for days worked in the month and paid next month.
Tips collected through the POS tie to tips paid through payroll. Tips payable clears.
Labor cost is wages, taxes, and benefits. See labor cost.

The bank and the balance sheet

Every bank and credit card account is reconciled to the statement.
Loans and equipment financing tie to lender statements.
Prepaid expenses are amortized and depreciation is booked.
Shared costs, such as an area manager, land on each store by a written rule. See multi-unit reporting.
Intercompany balances between entities agree and eliminate on consolidation.

Review and sign-off

Run the P&L by location. Read sales, cost of goods, labor, and prime cost against last month, last year, and the plan.
Every variance that matters has a written reason.
A named person signs off. Then lock the period so nothing posts to it by accident.

Who does each step

Step	Usually done by
Cutoff and counts	Managers at each location
Sales, delivery, tips	Whoever keeps the books
Inventory valuation	Operations with the books
Payables and accruals	Whoever keeps the books
Bank and balance sheet	Whoever keeps the books
Review and sign-off	Owner, controller, or the firm

Software can import the POS and match the bank. It does not count the walk-in or sign the month. If you are comparing firms that do the close for you, see restaurant accounting services, which lists the close deadline each firm publishes.