TL;DR
- Growing a thriving restaurant requires more than having a strong team and delicious food—your earnings need to outweigh your spending to be successful.
- By tracking your restaurant's data, you can assess your business performance, overall efficiency, and see any imminent needs.
- There are five main areas to track with restaurant reporting: sales, inventory management, menu creation, staff management, and growth management.
- Establishing reporting standards for these five areas can help you optimize your food and labor spending and give you direction as to where you can increase your profits.
Reports Measure Your Top KPIs
Reporting gives you insight into the biggest factors impacting the success of your restaurant. But, what exactly should you be reporting?
Thankfully, there is a basic blueprint to follow when it comes to restaurant reporting. You should review the standard restaurant benchmarks and assess them with your unique restaurant operations in mind. For example, if you don’t sell alcohol at your establishment, then your food cost percentage may be higher than the standard measurements.
Tracking your restaurant’s data provides a clearer understanding of your profits before the end of the year. This gives you invaluable insight and enough time to make proactive changes to your business operations if necessary.
The following reports measure the main five areas of reporting required for any restaurant to succeed:
- Sales
- Inventory Management
- Menu Creation
- Staff Management
- Growth Management
Sales Reports
1. Dine-In Reports
Purpose: To know if your restaurant is hitting your dine-in sales targets.
Level of Difficulty: Easy
Calculation:
Total Alcohol Sales + Total Dine-In Food Sales (repeat for each week)
Creating daily, weekly and monthly dine-in reports can help you quickly see the progress of your restaurant. At the very least, you should conduct a dine-in report monthly so you can assess if you’re hitting or missing your sales targets.
You’ll get more familiar with the amount of revenue expected from your restaurant over time. If there are a couple of months with fluctuating reporting, then check nearby external factors that could be responsible for dips and rises. For example, if a restaurant opened up nearby or if a local event brought in more customers.
Keeping a clear record of this data can help you track your ongoing revenue rather than blindly accepting business as usual—and feeling overwhelmed by your end of the year standings.
2. Online Order Reports
Purpose: To know how much of your revenue is coming from your delivery business.
Level of Difficulty: Easy
Calculation:
Total Sales from Website Orders + Total Sales from Delivery App Orders
Online orders now make up a large amount of restaurant orders, even at fast food chains. By separately tracking your in-house and online orders, you can see which revenue stream is more profitable for your restaurant.
If you’re the owner of multiple restaurants, you can also see which locations predominantly serve online or dine-in orders.
This data can help you choose more effective marketing tactics. If online orders are popular, then you may consider working with food delivery apps like Postmates, Uber Eats and Doordash to incentivize customers with discounts and guaranteed quick deliveries.
3. Discounts & Voids Report
Purpose: To know if your coupon campaigns are successful and reaching new customers.
Level of Difficulty: Easy
Calculation:
Promotion Expense = Total Value of Coupons used during any given day/week/month
New customers per coupon % = Number of new customers coming with coupons / Number of Coupons used
The purpose of this report is to track the success of your coupon marketing campaigns. This can help you avoid unnecessary spending on marketing concepts that aren’t resonating with new customers.
The best way to measure the impact of your campaigns is to mix physical tracking of coupons and verbal surveying from your wait staff. Since some coupons will end up in the hands of current customers, it’s important to track how many new customers are using the coupons.
You can do this by having your wait staff ask customers when accepting the coupon if this is their first time dining at your restaurant. Since this requires manual tracking, it’s important to implement the right processes so you can collect this information from your staff at the end of each shift.
Inventory Reports
4. Food Waste Report
Purpose: To know the amount of food and beverage inventory that goes to waste.
Level of Difficulty: Medium
Calculation:
Example for a hamburger:
Bun waste % = (Number of Buns Purchased - Number of Burgers sold ) / Number of Buns Purchased
Burger Patty waste % = (Number of Burger Patties Purchased - Number of Burger Patties sold ) / Number of Buns Purchased
Keeping track of your inventory is important for keeping costs down. While food waste may not be 100 percent avoidable, less is always better for business.
Focusing on expensive items, like alcohol and meat, can help you direct your efforts where they matter most. Ideally, you don’t want to waste any of your expensive products.
Knowing how many meals an order of beef should yield compared to how many were actually served before reordering can give you helpful insight to your food waste.
Keep in mind, “waste” can mean more than food going rancid. Employees can make mistakes like misordering, burning food, or dropping food on the ground. In worst cases, employee theft could also be involved.
Menu Reports
5. Menu Category Report
Purpose: To know which menu categories are bringing in the most sales and which items should be removed.
Level of Difficulty: Easy
Calculation:
Sales from Deserts % = Total Desert Sales / Total Sales
Knowing which menu categories are bringing in the most revenue can help you adjust your efforts to focus on your true money makers. Think—if a food item isn’t selling, then purchasing those ingredients could be burning a whole in your pocket and leading to food waste. If this proves to be true, then it’s worth considering removing weighted items from your menu.
Your POS system can help make tracking this information easy. You can categorize the different items in your menu, then calculate your sales by category to help you understand what’s appealing to your customers.
If you’re an independent restaurant owner, then this knowledge can be especially helpful in optimizing your menu. It’s a simple assessment of supply and demand—is your menu speaking to your customers?
As a franchise owner, you might not have that much freedom with your menu items, but you can make smarter decisions to grow your profits. You can add a promotion, adjust prices, or rework the product mix of the menu, all of which can impact your margins.
6. Item Analysis
Purpose: To know what items are the most popular and make the restaurant the most money.
Level of Difficulty: Difficult
Calculation:
Item X Gross Margin = Menu Price of Item X - Total Cost of Ingredients for Item X)
This report takes a little assessing of the costs and profits of each menu item. By putting this information into a graph, you can visually understand which items are popular, unpopular, cost-effective, or too expensive.
The items with high margins and high sales should be promoted on your menu and by your staff. On the other hand, you should consider removing items with low margin and low sales, especially if they’re costing more than they’re selling.
But, what if an item has a low margin and high sales? Those items should stay on your menu, but try increasing the price or decreasing your cost in any way. This is a great way to grow your restaurant’s profit and keep your customers happy with items they love.
Payroll Reports
7. Staff Pay Period Report:
Purpose: To know how many shifts are required and if the need for staff will be the same next month.
Level of Difficulty: Easy
Calculation:
Report issued with software.
Running this report can help you make your shift distribution more sustainable and see what areas of your restaurant require more staff.
Employees like to take extra shifts when they’re saving for something in particular or working a lucrative season, but this is generally a short-term solution. Your employees won’t want to work doubles forever.
To keep your staff roster full at all times, it’s recommended to always keep your job postings online and revisit them often to make sure they’re up-to-date. You can streamline this with HigherMe’s software and its Passive Job Post option, which keeps a backlog of applicants available to you when you’re ready to reach out.
8. Staff Hourly Cost Breakdown
Purpose: To know if there are any days of the week that are overstaffed or understaffed.
Level of Difficulty: Medium
Calculation:
Staff hourly cost = Hourly Salary * Number of employees working
Complete above calculation for the different shifts of the week.
Assessing your labor costs is crucially important if you’re trying to increase your restaurants’ revenue. By analyzing the percentage of sales going towards employee wages at every shift, you can see insightful data into costs going towards overstaffing.
If the percentage is too high, this might mean that you’re overstaffing a shift and overspending on labor. If the percentage is too low, this means you could be understaffing these shifts, which can negatively impact customer satisfaction. If on average your staff hourly cost comes up to about 30% of your revenue, you’re right on par with the industry.
Revenue Growth
9. Year-Over-Year Growth Report
Purpose: To know if dine-in sales are growing or declining compared to previous years.
Level of Difficulty: Medium
Calculation:
The challenge with this report is keeping track of your data. This report is more accessible if you have a software that calculates the previous year’s sales reports with your current year standings to measure your business growth.
Assessing your restaurant’s year-to-year growth should be done at the same time each year rather than month to month. The restaurant business tends to vary in profitability by season, making certain parts of the year more lucrative than others.
While there are many factors that impact your year-to-year profit (the past two years are a stealthy reminder), there are still plenty of factors within your control. As you become more successful in your business and build relationships with regular customers, your business should become more profitable.
10. Weekly Target Reports
Purpose: To know how well the restaurant did in a given week.
Level of Difficulty: Easy
Calculation:
Total number of weekly goals achieved (meals prepared, tables served, sales, etc.)
Growth is all about setting goals and putting processes in place to achieve them. If you don’t have weekly targets already implemented in your restaurant, then now is the time to get organized. Setting these targets are the only way you’ll know if your business efforts are succeeding.
If you’re continuously reaching your goals, then it’s time to set new and more ambitious ones. If you’re repeatedly not reaching your goals, then it’s time to look closely at the reports previously discussed in this blog and find the root of your problem.
Conclusion
Restaurant reports are the data-driven proof of your restaurant’s financial health. Simply put: it’s how you know if your business is profitable.
While there are quite a handful of reports to track, automating these processes with software can save you ample time. Plus, software tends to be more reliable than manual reporting considering the likelihood of human error, providing more accurate results.
To know where your restaurant stacks up across the industry, it’s important to compare your findings to standard restaurant industry benchmarks. Plus, remember to measure your own restaurant’s growth by comparing your reports to your prior year standings.