Restaurant finance
Restaurant P&L explained, line by line
A restaurant profit and loss statement runs from gross sales down to net income in about a dozen lines. Most operators can read it. Fewer can say confidently what belongs in each line — and that is where store-to-store comparisons quietly break.
The statement, in order
| Line | Example | What it is |
|---|---|---|
| Gross sales | $92,929.66 | Everything rung through the till before any deduction |
| Less: sales tax collected | $4,103.19 | Never yours. Always removed |
| Less: discounts & promotions | $5,254.61 | Comps, staff meals, marketing offers |
| Net sales | $87,674.85 | The denominator for every ratio below |
| Cost of goods sold | $23,782.18 | Food, beverage, packaging — anything leaving with the guest |
| Gross profit | $63,892.67 | Net sales less COGS |
| Operating expenses | varies | Rent, utilities, insurance, marketing, supplies, fees |
| EBITDA | — | Earnings before interest, tax, depreciation, amortisation |
| Taxes & depreciation | — | Below the operator’s control line |
| Net income | — | What the location actually made |
The three lines operators get wrong
1 · Sales tax inside net sales
It inflates the denominator and flatters every ratio built on it by two to three points. Sales tax was never revenue; it is money held on behalf of the state.
2 · Salaried managers outside labour
A salaried GM is a labour cost. Parking them in operating expenses makes an over-managed store look identical to a lean one, and makes labour percentage incomparable between a site with two salaried managers and a site with none.
3 · Delivery commission in the wrong place
Third-party delivery commission can defensibly sit in cost of sales or in marketing. Both are fine. Different stores choosing differently is not — it can move prime cost by five points at a delivery-heavy site.
Why labour sometimes appears as a memo line
In some store P&L formats, labour appears at the bottom marked memo — not deducted. That is not an error: it means labour has already been captured inside operating expenses and is repeated for visibility. Deducting it twice is a real and common mistake when someone rebuilds the statement in a spreadsheet.
A chart of accounts that makes comparison possible
The purpose of a chart of accounts is not tidiness, it is forcing every location to make the same choice. A workable restaurant structure:
Cost of goods · 500000
- 500010 Food ingredients
- 500020 Beverage supplies
- 500030 Paper & packaging
- 500040 Cleaning supplies (ops)
- 500050 Condiments & sauces
- 500060 Freight / delivery to store
- 500070 Waste & spoilage
- 500080 COGS adjustments
Operating expenses · 700000
- 700010 Rent / lease
- 700020 Property maintenance
- 700030 Waste disposal / grease
- 700040 Software / tech fees
- 700050 Bank service charges
- 700060 Accounting fees
- 700070 Restaurant supplies
- 700080 Delivery marketing / co-promos
- 700100 Insurance (property)
- 700160 Franchise fee
What a real operating month looks like
One location, June 2026, total operating expenses $52,052.83:
| Category | Amount | Share |
|---|---|---|
| Labour & payroll | $29,407.98 | 56.5% |
| Rent / lease | $6,791.66 | 13.0% |
| Delivery marketing / co-promos | $3,738.12 | 7.2% |
| Utilities | $3,387.62 | 6.5% |
| Bank service charges | $2,311.31 | 4.4% |
| COGS adjustments | $1,855.20 | 3.6% |
| Restaurant supplies | $1,511.17 | 2.9% |
| Insurance, accounting, other | $3,049.77 | 5.9% |
| Total | $52,052.83 | 100% |
Monthly close is too slow to manage on
A P&L that arrives three weeks after the period describes a month in which every shift has been worked and every case of chicken used. It is a scorecard, not a control.
The practical fix is not to close faster — it is to have an operating view weekly from the POS and expense feed, so the monthly close becomes a confirmation rather than a revelation.
Nexora builds a store-level P&L from POS sales and your expense data, holds one chart of accounts across every location, and reads uploaded bank statements line by line — proposing each charge against an account and holding it for human approval before anything posts. Most customers keep their accountant and give them a cleaner starting point.