Best Practices
How to Get More Value From Your P&L
Many independent restaurant owners can't really tell how their restaurant is actually performing even if they receive their financial statements on a regular basis.
If a restaurant's Profit & Loss Statement isn't formatted in the "restaurant industry standard" format, its value is usually very limited.
It's not uncommon for us to work with operators whose P&Ls have operating expenses in alphabetical order, misleading percentages on food and beverage costs, or other problems that make it difficult to determine how their restaurant is doing financially.
Here are the main categories on a P&L that are consistent with the National Restaurant Association's Uniform System of Accounts for Restaurants (USAR).
SALES:
Food Sales
Beverage Sales
COST OF SALES:
Food Cost (% shown as a % of "Food" Sales)
Beverage Cost (% shown as a % of "Beverage" Sales)
Stay on top of your finances. Don't leave that up to others. .
— Leif Garrett
LABOR:
Management
Staff
Employee Benefits
PRIME COST (total of Food, Beverage & Labor)
OTHER CONTROLLABLE EXPENSES:
Direct Operating Expenses
Music & Entertainment
Marketing
Utilities
General & Administrative
Repairs & Maintenance
CONTROLLABLE INCOME
NON-CONTROLLABLE EXPENSES:
Occupancy Costs
Equipment Leases
Depreciation & Amortization
RESTAURANT OPERATING INCOME
Interest Expense
Other (Income/Expense)
NET INCOME
Using this format, an operator is able to immediately see two of the most important numbers on a restaurant P&L, Prime Cost and Controllable Profit. It also makes it easier to compare your key costs and margins to restaurant industry averages and other operations.
Using a P&L format designed specifically for restaurants will greatly enhance your understanding of how your restaurant is actually performing so you know what deserves your time and attention and what doesn't.
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Online Course
How to Format & Read a Restaurant P&L
What Every Owner & Manager Should Know About a Restaurant P&L. There is a big difference between running a restaurant and building a profitable business. This program will give you and your managers practical, common-sense guidance in managing the financial side of your restaurant by maximizing ...
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Download
Restaurant P&L Templates
A profit and loss statement represents the end result of all of your efforts from marketing to operations to cost control. These sample summary and detailed P&L templates will give you ideas and a starting point for designing your own P&L.
