February 17, 2023

Cost Controlling in Restaurants: How to Boost Your Bottom Line

Cost Controlling in Restaurants: How to Boost Your Bottom Line
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The Restaurant Business An Accounting Guide
The Restaurant Business An Accounting Guide
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As a restaurant owner, you know all too well the importance of controlling food costs. With margins often being thin, it's crucial to keep a close eye on your restaurant's expenses. From cost of goods sold (COGS) to labour costs, there are several areas where you can make changes to improve your bottom line. In this blog, we'll cover some of the key points that restaurant owners face when it comes to controlling costs and offer practical solutions to help you get back on track.

  1. Properly Record Inventory and Wastages: One of the first steps to controlling your food costs is to properly record your inventory and map any wastages. This means tracking the flow of food items from the kitchen to the table and being able to identify any losses along the way. This will help you to control pilferages, theft, and reduce waste. Likewise avoid overstocking perishable items. 

  1. Recipe Costing and Menu Engineering: Another key aspect of controlling food costs is having proper recipe costing. By mapping the consumption of each food item, you'll be able to fix your pricing accordingly and keep your menu offerings profitable. It's also important to have a unit of measure for recipe costing and to ensure that your portion control is consistent across all of your branches.

  1. Profitability Tracking: In order to make informed decisions about your menu offerings, it's important to track your profitability. This means tracking your branch-wise profitability, as well as your partners' profitability (such as delivery services like Talabat and Deliveroo). Activity-based costing analysis can help you to better understand your costs and how they impact your bottom line. Additionally, tracking sales per table or per employee hour can give you valuable insights into your restaurant's performance.

  1. Negotiating with Suppliers: Negotiating with your suppliers is another important step in controlling your food costs. By bargaining for better credit and prices, you'll be able to reduce your expenses and improve your bottom line. It's also a good idea to do regular physical verifications of your cash to ensure that everything is accounted for.

  1. Labor Costs and Activity Based Costing Analysis: In addition to controlling food costs, it's also important to map labour costs in order to maximise profitability. To do this, consider using activity-based costing analysis, which will help you determine the cost of each activity performed in your restaurant.


Controlling food costs is crucial for the success of your restaurant business. By properly recording your inventory, monitoring wastages, and having accurate recipe costing, you'll be able to make informed decisions about your menu offerings and keep your expenses in check. To learn more about how you can control your costs and boost your bottom line, talk to the experts at today.