Now that everything is trackable, restaurant reports can show you data beyond sales and costs.
Want to know when was the last time a customer ordered online? There’s a report for that.
What about the time it took for an order to be prepared and delivered? You can also see a report for that.
Big data analytics has entered the restaurant industry, helping owners access valuable information about their business whenever needed. However, reading numerous reports at once can be intimidating and overwhelming.
That’s why knowing the best restaurant reporting practices is important to help you stay on track.
We’ll guide you through the process of restaurant reporting and help you adopt the best practices that will suit your business.
Why are Restaurant Reports Important?
Restaurant reports show various insights. But they all boil down to one critical conclusion: your restaurant’s financial health. The reports showing your best-selling items, fastest-moving inventory items, food costs, staff performance, etc., affect your restaurant’s finances.
Sales aren’t the only indicator of profitability. Making high sales doesn’t automatically mean your restaurant is profiting. If your bestselling menu items aren’t profitable, you may only break even despite making thousands of dollars in sales.
Restaurant reports can help you resolve that issue.
In addition, restaurant reports can help you spot operational inefficiencies, like unnecessary energy consumption, food waste, or any other backend problem. Those inefficiencies can increase your operational costs, hurting your working capital.
With instant access to restaurant reports, you can monitor your operations more closely, make changes in areas that aren’t performing well, and ensure that your decisions are based on the numbers instead of wild guesses.
Essential Restaurant Reports
You will deal with a long list of reports in your restaurant, each of them crucial for a particular purpose, but only a handful are essential for day-to-day analysis.
An all-in-one cloud POS system for restaurants can generate these reports in real-time. So when you’re budgeting for restaurant technology, choose the POS system that can show you the following:
1. Sales Report
A sales report shows not only the total sales but also which menu items sell the most, which ones don’t, and the discounts applied to each order.
If you have more than one outlet, the sales report will show how much you’ve sold in every outlet. You can also view these reports on one central platform.
The sales report from different outlets will help you compare your restaurants’ performances. They will allow you to redesign and engineer your menu based on your customers’ behavior in a particular outlet. You can create an outlet-specific marketing plan that will ultimately increase your overall sales.
Besides that, the sales report can show changes in your menu’s performance. For example, if your Iced Americano used to sell well last season but is now hardly ordered, it can indicate that you need to update its price to make it more appealing to customers.
2. Inventory Report
Food costs are the second-highest expense in a restaurant, following labor. You’ll see their figures in the inventory report, which can also show you the level of your inventory at any given time.
Analyzing the inventory report will help determine how food costs affect your profit. If you have a food cost percentage of 35%, it means 35% of your sales go toward your ingredients. The rest goes toward your profits.
If your inventory report shows that 35% isn’t enough to cover your ingredients, you can decide to find a new supplier with cheaper goods. That way, you can maintain your 35% food cost percentage or even reduce it, increasing your profit.
It’s best to generate an inventory report from an automated inventory management system. It will produce more accurate and real-time data than manually counting stock levels or computing receipts.
Manual processes are prone to errors, so you may lose time correcting variances. With an automated system, you’ll only select a date or outlet on the interface, and the data you need will be displayed instantly.
3. Expense Report
Like inventory reports, expense reports can help you keep track of your food costs. More importantly, they’ll show your total spending on rent, utilities, salaries and wages, equipment purchases and maintenance, and miscellaneous expenses.
Simply put, an expense report will give you a comprehensive insight into your restaurant’s daily or periodic expenses.
This report lets you plan your budget well and cut unnecessary costs. As a result, you can bolster your working capital and increase your profit.
4. Staff Performance Report
Monitoring your staff’s performance lets you see if your restaurant is delivering on its promise. It also ensures that you’re always operating efficiently, helping curb costs.
You can set Key Performance Indicators (KPIs) for each staff member to measure their productivity. KPIs can also ensure that your staff doesn’t cause wastage in your kitchen, like food spills, leaks, or spoilage. In addition, they can help you determine if they are following your food handling and safety protocols and reducing the risk of workplace accidents.
Best Restaurant Reporting Practices
1. Determine When to Generate the Right Reports
Restaurant reporting needs an efficient system. Pulling up several reports simultaneously isn’t always time-efficient and may cause information overload. Instead, it is better to determine when to read reports and which reports you should read at a given time.
Some reports, like sales, expense, inventory, and CRM, are best read together. You need insight into these areas every day. Pull them up before your restaurant closes for the night, so that you can prepare a new strategy for the next day if you need to.
Profit and Loss statements, income statements, and other comprehensive financial reports can be generated quarterly, annually, or semi-annually. You need these reports if your restaurant has shareholders, which may be the case if it’s under a publicly owned company, like McDonald’s.
Shareholders use comprehensive financial reports to evaluate your restaurant’s financial performance and growth potential. It helps them decide if they should continue investing in your restaurant.
Creditors also need to see these financial reports to assess how your restaurant uses its resources. If you take out a business loan, a potential lender should see if your restaurant can repay, and the financial reports will show them that.
There are also reports you should prepare every month, such as the cash flow statement. It shows the amount of money coming in and out of your business, like a sales report and expense report in one. The cash flow statement complements the balance sheet and income statement, with its main components including operating activities, investments, and financing activities.
2. Look at Menu Performance Reports
Your menu’s performance isn’t explicitly reflected in your sales report. If your sales report only shows total figures, you’re not seeing which items in your menu give you business and which ones don’t.
A menu performance report can tell if your menu engineering works or not. If it indicates that your high-profit items aren’t selling well, you can change that by redesigning your menu or revisiting your menu pricing strategy. Perhaps you can create a Happy Hour menu to highlight those high-profit items. If that’s not possible, you can try lowering prices or improving your menu presentation to attract more customers.
A CRM report and menu performance report can go hand-in-hand. Since a CRM report shows how customers prefer their orders (e.g., with extra cheese, without chili sauce, etc.), you can decide if you should change your menu with popular modifiers in mind.
That way, you may also increase your prices without disappointing your customers.
3. Pinpoint Peak and Slow Hours Based on Reports
Your POS can show the hours your restaurant is busiest. So it also lets you know the times when business is slow. While it’s necessary to give your front- and back-of-house enough time to rest in between shifts, keeping tables occupied is still important.
You can use slow hours to highlight easy-to-prepare menu items, like coffee, juices, teas, and pastries. If you’re dealing with seasonal changes instead, you can use your reports to determine which menu items grow in demand when a new season comes.
For example, suppose menu performance reports show that fresh coconut juice becomes popular in summer, while ginger tea is well-loved during the colder months. In this scenario, you can offer complementary snacks with these drinks during their in-demand season, allowing you to profit more off them.
4. Assessing Employee Performance
Your restaurant staff are the backbone of your restaurant; they play a significant part in your restaurant’s success. That’s why keeping track of their productivity and KPIs is crucial.
Employee performance reports show not just logged time-in and time-out. They can also display the time it takes for a staff member to fulfill an order. Your POS system can facilitate this task, showing how long an order is prepared in the kitchen and—if applicable—delivered at customers’ doorsteps.
If your staff can prepare and complete orders within a reasonable time frame, their efficiency will reflect on the staff performance reports. If the reports reveal the opposite, delaying the order’s completion, you can determine what needs to be done: adjust ideal time frames or retrain your staff.
5. Using the Best Restaurant Reporting Solution
Manual restaurant reporting is time-consuming and prone to errors. As a restaurant owner, your time is better spent on strategic tasks, like improving your menu, increasing your profit, or attracting talent.
Powerful POS systems come with reporting solutions, like real-time business analytics, inventory management systems, and CRM modules. This technology will allow you to automate your reports and access them anytime and anywhere. It also works if you have multiple outlets. The business analytics module can generate reports for each outlet and a consolidated report.
You can also find a POS system that includes a report on your staff’s performance. Plus, it may allow you to give a select number of employees access to relevant reports, like inventory. For example, a purchasing officer may be entrusted with the inventory report since they’re responsible for preparing purchase orders and ensuring that your restaurant maintains an efficient turnover rate. Of course, you should keep monitoring your purchase orders as well to make sure that they’re all accounted for in the inventory report.
Reports are Key to Meeting Your Restaurant’s Goals
Restaurant reports—especially real-time generated ones—give you an in-depth understanding of your business. They allow you to determine if your marketing strategies work and whether the expectations you’ve placed on your staff are met. In turn, you can make data-driven decisions and form a basis for measuring your success.
For that reason, best practices in restaurant reporting are the key to meeting your restaurant’s goals. The insight they provide is indispensable, so make sure to choose a POS system that lets you generate and access essential reports in just a few taps.