Restaurant Accounting Basics: The 5 Numbers Every Owner Should Know

Sales are not profit. These five numbers — sales by payment mode, food cost, prime cost, dish margin and P&L — tell you how your restaurant is really doing.

Most restaurant owners know their daily sales. Far fewer know their profit, and the gap between the two is where restaurants get into trouble. You do not need to become an accountant, but five numbers, checked regularly, will tell you far more than the sales total ever will.

1. Sales, split by payment mode

Total sales is a start, but the split matters: cash, UPI, cards and any delivery-app orders behave differently. Cash needs to be counted and deposited, card and UPI settle to the bank days later and net of fees, and delivery-app payouts arrive net of commission. Recording sales by payment mode is what lets you tell a genuine shortfall from a settlement that simply has not landed yet.

2. Food cost percentage

What share of food sales goes into ingredients: (opening stock + purchases − closing stock) ÷ food sales. Check it weekly. A rising trend is your earliest warning of over-portioning, wastage or supplier price creep.

3. Prime cost

Prime cost is your cost of goods sold plus labour, as a percentage of sales. It is the two biggest controllable costs added together, and a commonly used rule of thumb is to keep it in the low 60s percent or below — though the right figure depends on your format. If prime cost is healthy you have room to cover rent, utilities and profit; if it is not, nothing below it can save you.

4. Margin per dish

Selling price minus the cost of ingredients, for each dish. Two dishes with the same selling price can leave very different amounts of money behind. Knowing which items earn their place, and which ones only look popular, lets you adjust prices, portions and the menu itself. This needs each dish costed from a recipe — see our guide to food cost percentage for how.

5. Profit and loss, on a regular schedule

A profit and loss statement lists income, then every category of cost, and ends with what is left. Sales minus food, labour, rent, utilities, marketing, platform fees, repairs and everything else. For most restaurants a monthly P&L is the minimum; a weekly rough version is better. It is also the document a bank, an investor or a future buyer will ask for first.

Why a sales report is not accounting

A POS export tells you what was rung up. Real accounting records every rupee twice — where it came from and where it went — using double-entry bookkeeping. Each sale, purchase, expense and payout is posted as a balanced entry, which is what makes a P&L, a balance sheet and a trial balance possible, and what lets your accountant check the books instead of rebuilding them from scratch.

The practical difference: with a sales export, someone has to type everything into accounting software later, and mistakes creep in. With a POS that posts entries as it goes, the books are up to date whenever you look.

A simple monthly rhythm

• Weekly: food cost, stock count, wastage log, cash and settlement check.
• Monthly: P&L, payables and vendor balances, GST return preparation, bank reconciliation.
• Quarterly: menu review against margin data, price changes, and a sit-down with your accountant.

Where EasyBills fits

EasyBills was built so the accounting entries behind every sale happen automatically, and your profit and loss is visible on your dashboard without asking anyone. Whether you use us or not, aim for the same outcome: numbers you can check yourself, not numbers you wait for.