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 →If you only look at one number each month, make it prime cost. It combines the two biggest costs in any restaurant: what you spend on food and drink, and what you spend on staff.
How to calculate prime cost
Prime cost = cost of goods sold (food + beverage) + total labour cost
Labour cost should include wages, on-costs such as superannuation, and any contractors working in the restaurant. Divide prime cost by total sales to get prime cost as a percentage.
Why it matters
Rent and other overheads are mostly fixed. Prime cost is the part you can actually control week to week - through rosters, portion sizes, menu pricing and purchasing. When prime cost rises, profit falls almost dollar for dollar.
How to bring it down
- Match rosters to your busy and quiet trading periods
- Review the margin on each menu item, not just total sales
- Reduce waste with better prep planning
- Check supplier invoices against what was ordered
Our dashboards show wage cost and cost of goods every week, so you can see the trend at a glance. Get in touch.
General information only. Not personal tax advice. Contact us for advice on your situation.
