While restaurants are some of the most challenging businesses to run, they are, at the end of the day, a math problem. Ingredients cost a certain price, are prepared and sold by staff who earn a particular wage (plus tips), and sell for a certain price. Inside this equation, however, are a vast number of variables. The goal is to sustain and grow profits while providing unforgettable guest experiences, but doing so consistently is far easier said than done. With the pressure facing restaurants today, from the daily lunch rush to being short-staffed, leaders don’t have the time to manually do all the complex analysis required to ensure things regularly run in peak condition.
That’s where modern restaurant reporting steps in. By implementing an end-to-end, integrated restaurant enterprise management platform, restaurant companies can centralize the data they generate. Then, industry-specific accounting, financial, and operational tools to automate analysis to get an accurate, real-time picture of the business’s performance, which areas are struggling, and what to focus on to improve.
Below, we’ve outlined a few key reports your restaurant management software should produce to aid your pursuit of better margins and guest experiences. These metrics are fast becoming the standard in the restaurant biz, and without them, many businesses find themselves flying blind.
Optimizing Labor
Sales Per Labor Hour
The sales per labor hour (SPLH) report is one of the key indicators of labor productivity. SPLH is only available by integrating your point-of-sale (POS) system with your broader restaurant management platform. It tracks which service times are the most productive and which can be improved. This same concept applies to the number of guests you serve per labor hour.
A high SPLH may indicate that your shifts are understaffed, which can result in poor customer experiences and sagging employee morale. A low SPLH also suggests employee scheduling issues like overstaffed shifts. Knowing an SPLH goal, broken down by day part, can help maximize your labor spend.
Labor Actual vs. Scheduled
Use this report to see theoretical scheduled labor cost compared to your actual labor spend at a specific location over a certain time period. For reliable AvT labor reports, your restaurant business should be holistically managed by an integrated platform with accurate budgeting and forecasting, which will be the source of your theoretical labor cost. The difference between theoretical and actual is the variance, often the driver of excess cost.
However, this report should do more than tell you how much you’re off the mark. It should be dynamic, with actionable drill-down details attached to data points, such as job titles, actual dates, and employee names, to provide clear paths toward making changes that reduce labor costs and improve guests’ experiences.
Controlling Food Cost
Actual vs. Theoretical Analysis
Like the labor AvT report, food AvT analysis takes a deeper dive into the quantity and cost of your inventory and menu items, comparing what you should have spent with what was spent. The report includes metrics such as actual usage, theoretical usage, waste, variance, unexplained variance, efficiency percentage, and all of these details as a percentage of restaurant sales. By seeing your actual and theoretical numbers in quantities and dollars, you see the gap in your plan versus your execution.
This critical operational report should also allow you to examine the transactions that inform the numbers and an overall summary by category. Doing so can help you maximize inventory management efficiency. By identifying leaks, you can control the costs of individual ingredients and add money back into your bottom line.
Menu Item Analysis
The menu item analysis report shows each item’s current price, cost, margin, and quantities sold. This report helps guide decision-making by analyzing metrics to create menu engineering recommendations.
By analyzing the popularity and profitability of each menu item, ranking them against each other, and placing these items into categories, restaurant leaders can fine-tune their menu offerings and design to maximize profitability. Each category – like “star” (high margin, high popularity) or “opportunity” (high margin, low popularity) provides suggestions for what to do for specific menu items. By understanding how adding a promotion, adjusting prices, or reworking your product mix can improve margins, you can make informed decisions to grow profits.
You can also run this report by location, allowing you to discover where there may be variances between locations that are skewing the food cost in specific markets.
Getting the Big Picture
Daily & Weekly P&L
Everyone knows the value and importance of period-end P&L reports. You also know the downsides of too infrequent reviews. Without an integrated, automated system behind it, the numbers can be unreliable. This is also a complex report that often comes too late to take any meaningful action.
Now, imagine the impact of reviewing a P&L weekly or even daily. This is one of the most important shifts in empowering restaurant owners, operators, and managers to measurably succeed. The opportunity to conduct regular, high-level reviews and dig into the details to understand and adjust, in real-time, prime cost to directly impact the bottom is the most significant transformation in the restaurant industry.
Conclusion
While all these reports offer measurable ways to bolster profits and guest experiences, they don’t live in a vacuum. They all start with a restaurant management platform, built specifically for the industry, that integrates with all the technologies modern restaurants use to achieve success. In addition to centralizing restaurant data, that platform also eliminates the manual work needed to authenticate, manage, and manipulate the data so restaurant leaders can spend time inside the business making sure that cook, server, and shift leader are doing everything they need to do to keep the business on the right course.
