How to manage your Restaurant’s Expenses

Aug 1, 2019 | Blog

There is nothing more important than knowing how to manage your restaurant’s expenses, so that you get the most profit from your sales!

I bet when you first started your Restaurant business, you did not think much about the accounting and billing you will have to deal with. Indeed, contrary to common beliefs, most of restaurant management revolves around customer service AND money management skills, rather than foods and culinary arts. So what are some of the things you need to make sure you’ve got covered? The first step to enhancing your money management skills is organization! So start by creating a list of your budget, which can include the following:

#1) Fixed expenses: these expenses sometimes easily escape the mind and are really important to consider, since the restaurant would not exist without them and they are the more costly parts.


-salaried incomes


-license fees

-loan payments

#2) Fluctuating Costs

-hourly wages

-food costs


These costs will become easier for you to predict, if you have been in business for a while. However, they may be a bit tricky for new Restaurant owners and so I would suggest you try to keep track of your expenses by following the “30% rule”, which states:

1) Your weekly food order should not exceed 30% of your weekly sales.

2) Your labor costs should be less than 30% of your restaurant’s total revenue. The 30% rule is often applicable to all restaurants and franchises. That’s why if you are applying the rule and still caught in a financial miscalculation, I would suggest you review your system with regards to your menu prices or labor costs, which also brings me to my next point about employee/bookkeeping theft.

Controlling Theft

It is difficult to keep everything in order and to trust your bookkeepers/ accounting managers for all your restaurant’s profits. Obviously, limiting your bookkeeper’s accountability and access to things such as signing cheques or sending payments is something you should have already considered. Although, don’t forget about limiting the access to your foods and alcohol inventory and make sure that you track the items sold compared to the items available in your inventory. Again, it all comes down to organizing costs, which is why right from the start I suggested that you make a list of your budget as the first step.

There is a lot more to be said about restaurant finances, but I think that these first basic steps are the necessary things every owner should consider. If there are any specific financial problems you would like to know more about, please comment below and our solutions will be posted online shortly after.