So You’re Selling More Than Just Plates—Let’s Talk Numbers
Running a restaurant already means juggling inventory, payroll, vendors, and the health inspector. But lately, more owners are looking beyond the dining room—and into e-commerce. Selling bottled sauces, spice blends, merch, or meal kits through drop shipping platforms can open new revenue streams without cramming your walk-in fridge.
Sounds brilliant, right?
And it is. But here’s what no one tells you: selling online brings a different kind of accounting headache. And if you don’t get your method right—especially with drop shipping—you’re setting yourself up for a mess come tax time. Or worse, you’ll have no idea whether your online shop is actually making you money.
Drop Shipping Isn’t Inventory-Free for Your Books
It’s easy to fall into the trap: “We don’t store the goods—we just take the orders.” That feels simple. But while drop shipping spares you the hassle of stocking shelves or packaging orders, the financials are anything but simple.
Why? Because you’re still responsible for recognizing revenue, tracking your costs, and making sure it all aligns—especially if your restaurant’s LLC is now pulling in sales from Shopify, Etsy, or your own website.
Let’s say you sell a $12 jar of your house-made chili crisp. The customer pays online, a fulfillment partner handles the packaging and shipping, and $12 lands in your Stripe account—minus some fees.
But what did it actually cost you to make the sale? And when do you recognize that income?
That’s where accounting methods come in.
Cash vs. Accrual — No, It’s Not Just a “Finance” Decision
Let’s break it down without the accounting jargon.
Cash Accounting
This method records income when you get paid and expenses when you spend. If that chili crisp sale clears your account on Tuesday, you mark it down then. Same goes for supplier costs—if the payment doesn’t post till Friday, it doesn’t count till then.
It’s simple. It’s easy. But it also hides the full picture.
Accrual Accounting
Here, you track income when the sale happens, not when the money hits the bank. Same for expenses—if you owe your fulfillment center on the day of the order, that’s when it counts. It’s a little more involved, but it shows your true profitability more accurately.
For a restaurant owner moving into e-commerce, that difference can mean the world—especially when you want to compare online margins to your in-house menu items. Accrual tells you what you actually earned, not just what cleared the bank.
Okay, But Why Should I Bother?
Here’s the truth: most restaurant owners expanding into online sales aren’t just looking to play around. They want consistent income beyond their dining room. Some even dream of turning their packaged goods into a national brand.
But if you’re not using accrual accounting, you’re flying blind. You won’t see if your margins are too thin, if you’re spending more than you think on fulfillment, or if returns and shipping fees are quietly chewing into your profits.
And you know what really complicates things? Taxes.
Let’s say your online shop sells across state lines. Did you know that you might owe sales tax in multiple states, even if you’re still just one restaurant with one kitchen? Platforms like Shopify won’t always handle that for you. If your books don’t clearly show what’s been sold, where, and when—it’s a nightmare for compliance.
Real Talk: What Tools Actually Help?
You’re probably already using Toast, Square, or Clover for your in-house POS. But e-commerce? That’s a whole new arena.
Here’s what restaurant owners stepping into drop shipping should look into:
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Xero or QuickBooks Online — great for managing accrual accounting with solid reporting tools
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A2X — auto-syncs Shopify or Amazon orders with your accounting software
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TaxJar or Avalara — helps keep you compliant with sales tax, especially across multiple states
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Gusto or Rippling — in case your e-commerce shop grows and you hire remote fulfillment help
You don’t need to adopt everything at once—but building a simple, connected tech stack now saves you hours (and dollars) later.
Side Note: Cost of Goods Sold Still Matters
A lot of restaurant owners overlook this with drop shipping—probably because you’re not buying ingredients or packaging yourself. But every jar of sauce or bag of custom coffee beans still costs something.
Whether it’s the product itself, packaging, or third-party logistics, those costs need to be tracked under COGS (Cost of Goods Sold). If you lump it all under “Supplies” or “Miscellaneous,” you’re not getting a clean read on profitability.
And look—we know you didn’t become a chef to analyze spreadsheets. But wouldn’t it be nice to know whether that online store is making money… or just breaking even?
Final Thought: Don’t Let Your Side Hustle Sink Your Core Business
You started your e-commerce line to grow, not to grind harder. But that only works if the numbers make sense—and that starts with choosing the right accounting method from the jump.
So ask yourself:
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Are your financials showing when sales actually happen?
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Can you tell the difference between profit and just cash in the bank?
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Do you know what it costs you to sell each item online?
If you’re unsure, that’s not failure—it’s just a sign you’ve outgrown the basics.
