With convenience comes challenges.

3rd party apps like Grubhub, DoorDash and Uber Eats exploded during Covid. 

3rd party apps gave restaurants a big shot in the arm with access to delivery and new ways to find customers.  Sometimes their services were the dominant revenue stream for restaurants.

But with convenience comes challenges.  Confusion regarding how revenue is reported, mismanaged workflows, overpayment of sales tax, tip reporting issues, local tax reporting and which taxes are affected are just some of the issues that come up due to 3rd party apps.

3rd party apps (3PA) can cause a lot of problems for your accounting.

You should separate your 3PA sales from normal sales for purposes of sales tax calculations, gross profit calculations, payroll management and identifying the real cost/benefit of the service. 

Accountants have to find new ways of reporting 3PA revenue and costs because now they are a significant portion of total revenue.

The other factor confusing the issue is this business model is so new that some of the 3PA are still adjusting and changing their procedures.  Additionally, states are having to adjust and change their reporting requirements on the fly.

Each contract with the 3PA companies is different so these need to be reviewed with your accountant.

Accountants who are not familiar with the various 3PA contracts may cause some restaurants to double pay sales tax.

The first step in proper handling of 3PA revenue is to make sure it is programmed correctly in your POS or cash register.  The second step is to know what the contracts say.  The 3rd step is to make sure your accountant is up on the proper procedures for reporting.