Separate a location from a legal entity
A corporation running three Toronto outlets has three locations, but that does not automatically mean three separate legal businesses. Conversely, related corporations may need separate books even when the same owner manages them. Start the close with a list of legal entities, bank accounts, outlets and responsible managers.
Use the same core account categories and period end. A delivery charge coded to food purchases at one restaurant and administration at another weakens the comparison. Document the coding decision once and apply it to comparable transactions.
Give each manager a short closing checklist
Set a deadline for local records and a later date for the consolidated review. The bookkeeper can then identify missing information before the owner relies on the location reports.
- Provide sales, refunds, gift-card and processor reports through the cut-off.
- Submit supplier invoices and credits for deliveries received in the period.
- Approve location hours and identify staff working at other sites.
- Record stock transfers with both the sending and receiving location.
- Explain unsettled cash, deposits and unusual local expenses.
Illustrative example: a central kitchen supplies two cafes
A Toronto group purchases ingredients through its central kitchen and sends prepared goods to two cafes. Coding all purchases to the kitchen would make the cafes appear unusually profitable. The group chooses a documented allocation based on quantities dispatched, then checks that the sending and receiving records agree.
That allocation is a reporting policy, not an invitation to create arbitrary sales between departments. If separate corporations are involved, the accountant should confirm the intercompany treatment and applicable tax questions. Keep changes to the policy visible when comparing periods.
Review the group obligations as well as site margins
Ontario EHT association rules are a reason to review payroll across related employers. An outlet-by-outlet threshold assumption can miss the group position. The monthly close can maintain a combined payroll schedule for the person responsible for that assessment.
Finish with four questions: do clearing accounts reconcile, do intercompany balances agree, are shared costs allocated consistently, and which unresolved items could change a location’s result? Keep an answer owner and target date beside every material exception. This makes the meeting a decision point, rather than another request to gather records.
Put this into practice
Sources and current guidance
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