What gets checked before the numbers leave.
Producing the month is the bookkeeper's job, and a good one is worth keeping. This is the layer that goes on top of it — the structure, the judgment calls and the sign-off that decide whether what comes out is worth deciding anything from.
Below is a month for a restaurant group that doesn't exist — a holding company and two operating entities across six locations. The numbers are made up; no client data appears here. The entity columns foot across to Combined, and the management fee nets to zero at the group level. Both are worth checking.
Harbor & Vine Group
A holding company and two operating entities running six restaurants between them. The holding company charges each operating entity a management fee; that fee is real to each entity and must vanish at the group level.
| HV Holdings | Harbor Group | Vine Group | Combined | Eliminations | Consolidated | |
|---|---|---|---|---|---|---|
| Revenue | 45,000 | 712,000 | 528,000 | 1,285,000 | (45,000) | 1,240,000 |
| Cost of goods sold | — | 214,000 | 158,000 | 372,000 | — | 372,000 |
| Gross profit | 45,000 | 498,000 | 370,000 | 913,000 | (45,000) | 868,000 |
| Management fee — intercompany | — | 25,000 | 20,000 | 45,000 | (45,000) | — |
| Labor | 18,000 | 221,000 | 158,000 | 397,000 | — | 397,000 |
| Occupancy | 4,000 | 63,000 | 45,000 | 112,000 | — | 112,000 |
| Other operating expense | 12,000 | 98,000 | 76,000 | 186,000 | — | 186,000 |
| Total operating expense | 34,000 | 407,000 | 299,000 | 740,000 | (45,000) | 695,000 |
| Operating income | 11,000 | 91,000 | 71,000 | 173,000 | — | 173,000 |
Operating income is 173,000 both combined and consolidated. This elimination takes 45,000 out of revenue and 45,000 out of expense, so it changes the top line and not the result. That is specific to a management fee. An unrealized-profit elimination — inventory sold between entities and still on hand at period end — does move consolidated income, and should. Worth knowing which kind you're looking at before reading anything into a consolidated number.
Eight business days from period end.
This one ran clean. A month with a late vendor bill or a disputed count runs longer, and the owner hears about it on day three rather than day eight.
| Step | By | What that means |
|---|---|---|
| Bank and credit card accounts reconciled | Day 3 | Across the three entities |
| POS revenue tied to the general ledger | Day 4 | Toast daily summary to deposits, by location; comps and voids reviewed separately |
| Inventory counted, COGS recognized on sale | Day 5 | Purchases land in inventory on receipt and relieve to COGS as items sell. The failure that turns up most is expensing deliveries straight to COGS, which makes a heavy buying month look like a bad one |
| Payroll accrued through period end | Day 5 | March 31 falls mid-period, so five days are accrued |
| Intercompany balances agreed between entities | Day 6 | Both sides matched before anything eliminates |
| Eliminations posted, consolidated statements built | Day 7 | Each entry balances Dr = Cr and carries its support |
| Balance sheet reviewed account by account | Day 8 | Every balance traced to a reconciliation or a schedule |
| Owner package delivered | Day 8 | Statements, the KPI page, and the open items below |
Open items.
Estimates are labelled as estimates. Anything that couldn't be verified gets named here rather than absorbed into a number.
- Vine District: $4,180 of Q1 repair invoices arrived after close. Accrued on an estimate from the vendor quote; will true up in April. Estimate is disclosed here rather than buried in the number.
- Harbor Street: one vendor is still billing the old entity post-restructure. Reclassified this month; the vendor record is being corrected at source so it stops recurring.
- Group: the March management fee was charged at the budgeted rate, not actual cost. Worth a conversation about whether the rate still reflects the work — it has not been revisited in four quarters.
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