A restaurant income statement, using USAR, shows sales and cost of sales related to food and beverage and any other expenses related to the functioning of the restaurant.<\/p>\n
![\"Restaurant](\"https:\/\/www.philodex.com\/wp-content\/uploads\/2021\/08\/PX-Posting-LinkeIn-KPI-1024x535.jpg\" "\\"Restaurant")
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Let me explain how you compile such a statement.<\/p>\n
List the total Revenue (Sales)<\/strong> before expenses always on the top line and that is called the TOPLINE REVENUE<\/strong> = TTL Sales before expenses.<\/p>\n Different Operations may report revenue in different ways. It can be divided by just food and beverages. Other ways of reporting revenues would be<\/p>\n It is entirely up to the management or to you AS LONG AS IT IS CONSISTENT<\/strong> \u2013 which ever approach you want to use is fine. And as long as revenue is listed first and you have a sub total for topline revenue.<\/p>\n Then we will always have Prime Costs under the USAR format<\/em><\/strong><\/p>\n – Prime Costs<\/strong> \u2013 which are Total Costs of Sales + Total Labour Expenses – Non Controllable Expenses<\/p>\n – Non Operation Expenses<\/p>\n All the sales divided in the way that you have decided, listed by categories.<\/p>\n the amount paid for goods and F&B products used to create revenue. In order to sell food and beverages you need to purchase food and beverages, and that is one of your biggest costs.<\/p>\n The reason why it is called prime cost is because they represent a very big portions of your expenses that you have to take away from those revenues.<\/p>\n In additon, you have control over these costs. And what I mean by these – if you take control of your F&B Costs you can watch for<\/p>\n You will have to manage these costs because they have a huge impact on your results.<\/strong><\/em><\/span><\/p>\n How to control your beverage cost in depth \u2013 item by item?<\/p>\n When you know how much of each item has been sold in a given time frame, and how much profit is driven by each menu item, you can identify the popularity and profitability.<\/p>\n That is where a Menu Engineering Spreadsheet comes in handy. Prepared with a few \u2013 not very complicated formulas – and after your database input it will categorize your items and indicate to which of the following categories each menu item belong:<\/p>\n Register for my Newsletter<\/strong><\/a> in order to learn more about MENU ITEM Engineering in one of my next Newsletters.<\/span><\/em><\/p>\n These are also Prime Costs.<\/p>\n Again – The reason why it is called prime cost is because they represent a very big portions of your expenses that you have to take away from those revenues. And you also have to have control over these \u2013 same as the Cost of Sale.<\/p>\n Staff, management, benefits, insurance, pension scheme, salaries, wages, service charges, contracted labour and bonuses<\/p>\n And if you take control of your Labour Cost – you can look out for:<\/p>\n You always want to make sure to watch your Prime Cost<\/strong><\/p>\n You will have to manage these costs because they have a huge impact on your results.<\/strong><\/em><\/span><\/p>\n Controllable Expenses<\/strong> \u2013 Other costs that can be controlled by the business and what your Managers have control over.<\/p>\n On the Controllable Income Line<\/strong> it would give you a subtotal of your Controllable Income<\/strong>. (Revenue \u2013 Prime Cost \u2013 Controllable Expenses)<\/p>\n Up to here there you have some control over the costs and expenses. So make sure you control this to the best of your ability and as efficiently as possible to make sure that you make the most controllable income as you possible can.<\/p>\n Non-Controllable Expenses<\/strong> \u2013 These are expenses that do not fluctuate with the amount of sales.<\/p>\n There are fixed expenses, that means no matter whether you sell zero or a million, it does not matter, you will always have to pay for your occupancy cost. They will stay the same and you will have no control over these expenses:<\/p>\n Here is a review of our KPI\u2019s – your Key Performance Indicators<\/strong><\/p>\n This will be your Profit or Loss<\/strong> at that point.<\/p>\n <\/p>\n\n
\n+ Top Line Revenue<\/span><\/h6>\n
\n– Controllable Expenses<\/p>\n= Controllable Income<\/h6>\n
= Operation Income<\/h6>\n
= Income before Tax<\/span><\/h6>\n
\nREVENUE<\/h6>\n
COST OF SALES<\/h6>\n
These are called Prime Costs<\/h6>\n
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MENU ITEM – Engineering<\/h6>\n
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LABOUR (Payroll) COST<\/h6>\n
Total labour cost includes<\/h6>\n
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OTHER EXPENSES<\/h6>\n
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UNIFORM SYSTEM OF ACCOUNTS FOR RESTAURANTS<\/h6>\n
Summary<\/h6>\n
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