#COGS BALANCE SHEET HOW TO#

How do I create a restaurant balance sheet? Overall, maintaining a restaurant balance sheet allows you to simultaneously verify the accuracy of a profit and loss statement while getting a more holistic view of the restaurant’s financial health. This statement can be used to forecast short and long-term cash flow and assess the overall financial health of the restaurant.

The Quick and Dirty About Restaurant Balance Sheets What is a Restaurant Balance Sheet?Ī restaurant balance sheet lists out a restaurant’s assets, liabilities, and equity at a given point in time. For that, you’ll need to create and maintain a restaurant balance sheet. We’ve also put together this helpful guide to walk you through reading a profit and loss statement.Ī profit and loss statement is a wonderful tool to lean on when evaluating and optimizing your restaurant’s operating expenses, however, it does not give the complete picture of your business’s financial health.

If you need some help getting started, Toast offers a profit and loss template to simplify the calculations. When you have these numbers clearly laid out in front of you, it’s easier to calculate important restaurant metrics like food cost percentage, gross profit, and net profit/loss. A common profit and sales statement might be broken out like this:Įxpenses (labor expenses and other operating expenses) When calculating, it’s helpful to further break down costs and expenses to get a more granular understanding of what is or isn’t working for your restaurant. If you think those categories sound broad, you’re right. Sales - Cost of Goods Sold - Expenses = Profit/Loss

#COGS BALANCE SHEET HOW TO#

How to Calculate Profit and Loss for Your RestaurantĬalculating a profit and loss statement is relatively simple. You will also be able to tell whether a tweak made to your restaurant management strategy – like renegotiating contracts with vendors, changing up your employee scheduling strategy, or revisiting your controllable costs – was successful or unsuccessful. It’s essential to keep an updated profit and loss statement for each month, quarter, and year to get an accurate picture of how your restaurant is performing over time. How much you spent on any additional, controllable operating expenses necessary to the day-to-day running of your business, like advertising, utilities, rent, etc. How much you had to spend on labor, known as your labor cost How much you had to spend on the patties, buns, condiments, fries, etc., also known as your COGS (cost of goods sold) How much money you earned on those sales, also known as your net-revenue. How many burgers and fries were sold during the month The profit and loss statement for the month of September for Billy’s will express: So, say you’re operating Billy’s Burger Joint. The Quick and Dirty about Restaurant Profit & Loss Statements What is a Restaurant Profit and Loss Statement?Ī profit and loss statement shows a restaurant’s performance over a period of time, taking all restaurant expenses into account – from prepaid to future expenses– and weighs them against restaurant sales and the costs of goods sold. In this post, we’re going to mainly focus on how to create and maintain a balance sheet for your restaurant, but a discussion about balance sheets wouldn’t make sense without touching on profit and loss statements: what they are, what they tell you, and why you should keep them updated. How can you increase your margins and put a little padding in your pocket? By taking control of your restaurant costs and keeping a close eye on both your restaurant profit and loss statement and restaurant balance sheets. From labor costs, to food costs, to real estate costs, to marketing and advertising costs, the operational overhead rate for restaurants can be downright staggering. The reason why you hear the phrase “razor thin margins” closely follow any mention of owning a restaurant is because it’s true. Unfortunately, it’s traditionally pretty hard to make money running a restaurant: The average restaurant profit margin is between 3-5%. What’s your “ I opened because” story? Whether it was a passion for food and drink, a genuine knack for hospitality, a history of working in the industry, or because it’s what your family does, you saw a chance to marry your passions with a reliable source of income.

Cogs balance sheet