Discover proven restaurant cost control strategies to cut waste, boost profits, and improve efficiency without sacrificing quality.

Ever wondered why some restaurants thrive while others barely scrape by? Have you noticed how two eateries serving similar food in the same suburb can have wildly different financial outcomes? What separates the profitable ones from those constantly struggling to make ends meet?

The answer often comes down to one critical factor: cost control. Running a restaurant accounting in maimi isn’t just about serving delicious food and creating a welcoming atmosphere.

It’s about understanding every dollar that flows through your business and making sure you’re not letting profits slip through the cracks.

Whether you’re managing a bustling cafe in Melbourne or a fine dining establishment in Sydney, getting a grip on your costs can genuinely make or break your venture.

In this guide, we’ll explore the most effective strategies for controlling costs across your entire operation. You’ll discover how to calculate and manage food costs, optimise labour expenses without sacrificing service quality, and implement inventory systems that actually work.

We’ll also look at the common pitfalls that catch restaurant accounting owners off guard and the key metrics you should track regularly.

By the end, you’ll have a clear roadmap for building a more sustainable and profitable restaurant accounting business.

Understanding the True Cost of Running a Restaurant

Breaking Down Your Major Expense Categories

Running a restaurant involves juggling multiple expense categories simultaneously. Your prime costs—food and labour combined—typically eat up around 55-65% of your total revenue. Then you’ve got rent, utilities, insurance, marketing, and equipment maintenance to consider.

Understanding where your money goes is the first step toward controlling it. Many restaurant accounting owners focus solely on food costs while neglecting other significant drains on their finances. A thorough breakdown helps you identify which areas need immediate attention.

What Percentage of Revenue Should Go to Food Costs?

For most Australian restaurants, food costs should sit between 28-35% of revenue. Fine dining establishments might run slightly higher due to premium ingredients, while quick-service venues often aim for the lower end.

If your food costs consistently exceed these benchmarks, it’s time to investigate. Are you over-ordering? Is there waste you haven’t noticed?

Are your menu prices competitive yet profitable? These questions form the foundation of effective cost management.

Labour Costs: Finding the Sweet Spot

Labour typically accounts for 25-35% of revenue in Australian hospitality. With award wages and penalty rates to consider, this can quickly spiral if not managed carefully.

The goal isn’t to slash wages indiscriminately. Instead, focus on scheduling efficiency and ensuring you’ve got the right people working at the right times. Understaffing during peak periods hurts service and sales, while overstaffing during quiet times burns cash unnecessarily.

Food Cost Control Strategies That Actually Work

How Do You Calculate Food Cost Percentage?

Calculating your food cost percentage is straightforward once you know the formula. Simply divide your total food costs by your total food sales, then multiply by 100. For example, if you spent on ingredients and generated in food sales, your food cost percentage would be 30%.

Track this weekly rather than monthly. Weekly monitoring lets you spot problems quickly—before they become expensive habits. Many successful operators review these figures every Monday morning without fail.

Menu Engineering: Pricing for Profit

Menu engineering involves analysing each dish’s profitability and popularity. Some items might sell brilliantly but barely break even, while others could be profit powerhouses that need better promotion.

Consider categorising your dishes into four groups: stars (high profit, high popularity), ploughhorses (low profit, high popularity), puzzles (high profit, low popularity), and dogs (low profit, low popularity).

This analysis helps you make smarter decisions about what to promote, reprice, or remove entirely.

Portion Control Without Compromising Quality

Consistency is everything when it comes to portions. Using standardised recipes with precise measurements ensures every plate leaving your kitchen costs exactly what you expect.

Invest in proper portioning tools—scales, ladles, and measuring cups. Train your team thoroughly on portion sizes. A few extra grams of protein per serve might seem insignificant, but across hundreds of covers weekly, it adds up dramatically.

Reducing Food Waste in Your Kitchen

Food waste directly impacts your bottom line. Track what gets thrown away and why. Is it prep waste? Spoilage? Plate waste returning from customers?

Once you identify patterns, take action. Perhaps you’re prepping too much of certain ingredients, or maybe portion sizes need adjusting based on what customers actually finish. Some restaurants have cut waste by 20% simply by paying closer attention.

Smart Inventory Management Techniques

How Often Should Restaurants Take Inventory?

Weekly inventory counts are the industry standard for good reason. They give you accurate data for calculating food costs and help identify discrepancies before they become major losses.

Monthly counts might seem easier, but they leave too much room for problems to develop unnoticed. Theft, spoilage, and over-ordering can go unchecked for weeks, costing you thousands.

First In, First Out: The Golden Rule

The FIFO system ensures older stock gets used before newer deliveries. It’s simple in theory but requires discipline in practice.

Organise your storage areas so older items sit at the front. Date everything clearly. Train your team to check dates before grabbing ingredients. These small habits prevent spoilage and ensure you’re serving the freshest possible product.

Building Strong Supplier Relationships

Good supplier relationships go beyond negotiating lower prices. Reliable suppliers help you maintain consistency, manage cash flow, and even access premium ingredients before competitors.

Don’t be afraid to shop around occasionally—it keeps everyone honest. But also recognise the value of loyalty. A supplier who prioritises your orders during shortages is worth their weight in gold.

Controlling Labour Costs Without Cutting Corners

How Can Restaurants Reduce Labour Costs?

Start by analysing your sales data alongside your roster. Are you scheduling based on actual demand or just habit? Many restaurants discover they’re overstaffed on traditionally slow nights simply because “that’s how it’s always been done.”

Technology can help too. Modern scheduling software analyses historical sales patterns and helps predict staffing needs more accurately than gut instinct alone.

Optimising Staff Scheduling for Peak and Quiet Periods

Effective scheduling means having enough hands during rush periods without carrying excess staff during lulls. Study your sales patterns across different days and times.

Consider split shifts for key team members during lunch and dinner services. Use on-call arrangements strategically for unpredictable periods. The goal is flexibility that serves both your business needs and your team’s wellbeing.

Cross-Training Your Team for Flexibility

Cross-trained staff provide incredible operational flexibility. When someone calls in sick or a section gets unexpectedly slammed, you’ve got team members who can step in seamlessly.

Plus, many employees appreciate learning new skills—it keeps work interesting and boosts their value. Start with enthusiastic volunteers and gradually expand your cross-training programme across the team.

Operational Efficiencies That Save Money Daily

Energy and Utility Cost Reduction

Utility bills can creep up without notice. Simple changes like LED lighting, proper equipment maintenance, and turning off unused appliances make a real difference.

Check that refrigeration seals are intact and that exhaust systems aren’t running longer than necessary. Some restaurants have reduced energy costs by 15-20% through basic efficiency measures.

Streamlining Kitchen Workflows

An efficient kitchen layout reduces wasted movement and speeds up service. Watch your team work during busy periods—where are the bottlenecks?

Sometimes small changes have big impacts. Moving frequently used items closer to prep stations, reorganising storage, or adjusting equipment placement can shave seconds off every dish. Those seconds multiply across hundreds of covers.

Technology and POS Systems for Cost Tracking

Modern POS systems do far more than process payments. They track sales patterns, monitor inventory, and generate reports that highlight cost issues automatically.

Choose a system that integrates with your accounting software and provides the specific reports you need. The investment pays for itself through better decision-making and reduced administrative time.

What Are the Most Common Causes of High Costs in Restaurants?

Several culprits typically drive costs higher than necessary. Inconsistent portioning, poor inventory management, and inefficient scheduling top the list. Theft—both internal and external—also plays a larger role than many owners realise.

Menu items priced without proper cost analysis can silently drain profits for months. Similarly, failing to regularly review supplier pricing means missing opportunities to negotiate better deals. The most successful operators stay vigilant across all these areas simultaneously.

Monitoring and Measuring Your Cost Control Success

Key Metrics Every Restaurant Owner Should Track

Beyond food cost percentage and labour cost percentage, track your prime cost (food plus labour combined), average spend per customer, and table turnover rates. These metrics together paint a complete picture of your financial health.

Set benchmarks and monitor trends over time. A single week’s figures tell you little—patterns across months reveal the true story.

How Often Should You Review Your Costs?

Weekly reviews catch problems early. Monthly deep-dives allow for more strategic analysis. Quarterly reviews should examine trends and inform bigger decisions about menu changes, pricing, or operational shifts.

Make these reviews non-negotiable appointments in your calendar. The restaurants that struggle most are often those where owners are “too busy” to check the numbers regularly.

Building a Sustainable, Profitable Restaurant

Cost control isn’t about penny-pinching or compromising quality. It’s about running a smart, efficient operation that maximises the value of every dollar you spend.

The strategies we’ve covered—from food cost management to labour optimisation—work together to create a healthier business.

Start by identifying your biggest opportunities. Perhaps it’s tightening inventory controls or implementing better scheduling practices. Focus on one area at a time, measure your progress, and build from there. Small improvements compound into significant results over months and years.

Your restaurant accounting deserves to thrive, not just survive. By implementing these best practices consistently, you’re setting yourself up for long-term success. Take that first step today—your future self will thank you for it.

Running a restaurant is hard. Managing profits doesn’t have to be. Visit The World Beast for expert business guides, cost-saving strategies, and growth insights trusted by entrepreneurs worldwide.