What does a restaurant accountant actually do?
A plain-English guide to what a specialist restaurant accountant does and how it differs from a general accountant.
Read article →Food cost percentage is one of the most useful numbers a restaurant owner can track. It tells you how much of every dollar of food sales goes back out on ingredients.
The formula
Food cost % = (opening stock + purchases - closing stock) / food sales x 100
For example, if you start the week with $4,000 of stock, buy $6,000, finish with $3,500 and sell $20,000 of food, your food cost is $6,500, and your food cost percentage is 32.5%.
Why a stocktake matters
Using purchases alone gives a misleading result - one big order can make a good week look bad. Counting stock at the start and end of the period gives a true figure.
What is a "good" food cost?
There is no single right answer. It depends on your cuisine, your prices and your style of service. What matters most is your own trend: if your percentage creeps up month after month, something has changed - supplier prices, portion sizes, waste or theft.
Making it useful
- Track it weekly or monthly, at the same time each period
- Cost your main dishes so you know the margin on each plate
- Review supplier prices regularly
- Keep food and beverage separate - they behave very differently
Our dish margin calculator works out the real food cost of each dish. Or ask us to set up food cost reporting for your venue.
General information only. Not personal tax advice. Contact us for advice on your situation.
