Guide · 8 min read
Food cost, labor, prime cost, delivery app fees — the numbers that decide whether a restaurant makes it past year three.
Most restaurant owners run on instinct. The successful ones run on prime cost. Track food + labor as a percentage of sales every week and you'll catch problems while you can still fix them — not three months later when the lease renewal hits.
Sales: Food, Beverage, Alcohol, Delivery. COGS broken out the same way. Labor split into BOH, FOH, Management. Operating expenses tagged by category.
At minimum: proteins, seafood, alcohol. Use the formula Beginning Inventory + Purchases − Ending Inventory = COGS. Divide by sales for true food cost %.
POS deposits, delivery platforms (DoorDash, Uber Eats, Grubhub), gift card redemptions. Each has its own commission and payout schedule — don't trust the net deposit.
Sales, food cost %, labor cost %, prime cost %. Four numbers, every Monday morning. Operators who do this beat industry averages by 5–10 points.
SnapBooks tracks food cost, labor %, and prime cost in one weekly dashboard.
Start freePrime cost (food + labor) should sit at 55–65% of sales. Food cost 28–32%, beverage 18–22%, labor 25–35%. If prime cost crosses 65% you don't have a profit problem — you have a survival problem.
Weekly counts of high-cost items (proteins, alcohol), full monthly count. Without it your food cost % is a guess. Most operators lose 2–4 points of margin to invisible waste, theft, or over-portioning.
Tips are a pass-through — record gross sales including tips, then a 'Tips Paid Out' liability when staff are paid. Tip credit affects payroll tax; coordinate with payroll provider.
Accrual. Restaurants buy in bulk and use over weeks; cash accounting hides true food cost. Accrual matches inventory used to sales generated — the only way to get real numbers.
Record gross sales, then commission fees (15–30%) as an expense — not net. Otherwise sales look low and food cost % spikes artificially. Reconcile each platform's weekly statement to deposits.