The best way to present the financial information contained on your P&L is in a way that works best for you. If your current P&L is telling you what you need to know to effectively manage your restaurant, then don't change it.


But if you're not thrilled with what you're using, or you're wondering if there's a better way, we may give you some ideas. We can provide sample P&L's that contain features found in many of the best single and multi-unit operators in the industry. They contain essentially the same revenue and expense categories as recommended by the National Restaurant Association in their "Uniform System of Accounts For Restaurants."


Consider getting at least two versions of your P&L, a one-page summary and a more detailed version. Most restaurant operators really like the one page summary because they want a simple, cut to the chase, look at how the restaurant is performing and really don't care to pour over any financial report for more than a minute or two.


Numbers an operator should stay on top of to increase profitability

Sales
While this is pretty obvious, the top line is the single biggest profit-determining factor on the P&L. Strong sales volume can make up for quite a few management mistakes and cost control glitches for awhile anyway. It's good to compare current sales to the same period of the prior year and to a budget or forecast, if available.


Prime Cost
Prime cost is total cost of sales plus all payroll related costs, including wages, benefits, payroll taxes, worker's compensation and other similar expenses. Keeping close tabs on your prime cost is critical for a number of reasons; it represents your two biggest and most volatile cost areas, and makes up 80% to 90% of the expenses that you have any real control or discretion over


Controllable Profit
Sometimes referred to as "Operating Income", Controllable Profit reflects only those expenses that the operations personnel have any real control or influence over. This makes it a good benchmark for evaluating management's overall effectiveness at "running the restaurant."


Net Income
Finally, what's left after all the expenses are paid (provided there's no brackets around it). The importance of this number is quite apparent; however, it may be helpful to compare "Net Income" to one or more prior periods to see if you're gaining or losing ground.

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