Restaurants, cafes & cloud kitchens
How to calculate food cost percentage from your books
Your menu engineering says 30%. Your books might say something else.
The formula
Actual food cost for a month is opening stock plus purchases minus closing stock. Divide it by food sales for the same month to get your food cost percentage. Do the same separately for beverages, because the margins are very different.
Why the number is often wrong
- Purchases recorded when paid instead of when received
- No stock count at month-end, so stock is assumed to be zero or unchanged
- Cash purchases from the market never entered
- Staff meals and wastage hidden inside food cost
- Delivery-app sales recorded net, which makes the percentage look higher than it is
A simple monthly routine
- Count stock on the last night of the month, at cost
- Record every supplier invoice by delivery date
- Log staff meals and wastage separately, even roughly
- Book food and beverage sales gross
- Compare actual food cost with theoretical cost from your recipes
When the gap is more than a few points
A persistent gap between theoretical and actual food cost usually comes from portioning, waste, supplier price increases that were never reflected in the menu, or stock leaving without being sold. The books will not tell you which, but they will tell you when to start looking, and which category to look at first.
Recent result
AED 36,000
of AED 40,000 in penalties waived for an IFZA free-zone company. We prepared the waiver request; the investor paid AED 4,000.
Not sure where you stand?
Send us your last VAT return or your trade licence. A chartered accountant will tell you what is in order and what needs attention. No obligation.