Show Notes
- What does the P&L do
- It reports sales and expenses
- Not the actual cash but commitments either coming in and going out
- Where do the numbers come from?
- Sales – cash, credit cards, client invoices
- Expenses – bills and invoices posted during the period,
- Invoice date determines when the charge is reported
- Restaurant p&ls generally have five main sections
- Sales
- Cost of Goods – food & beverage (usually consumables but some restaurants consider paper cogs usually fast food – burger wrapper, soda cups)
- Labor (not just payroll but salaries, taxes & benefits)
- Operating Expenses
- Occupancy
- Pro tip, most accounting programs allow you to click on the dollars (food cost) and see a detailed report of every transaction.
- Example – main line vendor sells dairy, meat, grocery, paper, chemicals. You can see if only the food on the invoice.
- EBITDA
- Earnings Before Interest Taxes Depreciation and Amortization
- More numbers below this line but you don’t need to worry unless you own the place.
- Basically how much the sales cost to execute
- Sales – Cost = profit or (loss)
- Did you make or lose money?
- Problems with P&Ls.
- Bookkeepers make mistakes
- Don’t take it personally and don’t make assumptions about whether or not it is deliberate
- If you don’t understand how it works you can’t spot the mistakes
- By itself, it can’t tell you where you are bleeding.
- You have to have something to compare it to.
- Usually a budget or last year’s sales.
- Know your Industry standard, are you a pasta joint, steak house, seafood house?
- Variance means the difference between two compared numbers
- Actual food cost $12,000 or %30
- Budgeted food cost $10,000 or 25%
- Variance $2,000 or 5%
- P&Ls usually aren’t completed until one to two weeks after the end of the period.
- By then you are half way through the next period and its too late to react
- This has given rise to flash reports & weekly inventory
- Bookkeepers make mistakes
- It’s just a reporting tool
- controlling costs starts with
- Charging the right price
- Purchasing effectively
- Not wasting or losing the product
- Performance standards
- if its good enough for the food, its good enough for your operations
- controlling costs starts with
- Next week – charging the right price.
- It reports sales and expenses