Restaurants and hospitality
Management accounts for restaurants and hospitality
Restaurant and hospitality management accounts live or die on prime cost: food and beverage cost plus labour, as a share of sales. Many operators aim for somewhere around 60 to 65%. The monthly pack shows it beside food cost, beverage cost, labour and rent, against last month and last year.
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Every figure shown here is invented for illustration. Nothing on this page is computed from anyone’s accounts.
The eight measures a hospitality pack should show
| Measure | Formula | Note |
|---|---|---|
| Sales by stream | Food, beverage, delivery (and rooms, where there are any) | Each stream carries a different margin |
| Food cost % | Food purchases, adjusted for stock ÷ food sales | Watch the trend, not one month |
| Beverage cost % | Beverage purchases, adjusted for stock ÷ beverage sales | Usually lower than food |
| Labour % | (Wages + superannuation or pension + workers' insurance) ÷ sales | Split kitchen and front of house if you can |
| Prime cost % | (Food + beverage cost + labour) ÷ sales | The headline efficiency number |
| Delivery platform cost % | Platform commissions ÷ delivery sales | Delivery can look busy and earn little |
| Rent % of sales | Rent and outgoings ÷ sales | Fixed, so it falls only as sales rise |
| Occupancy, for accommodation | Rooms sold ÷ rooms available | Needs room data beside the trial balance |
What Magic MIS computes, and what you work out from its ledgers
Every month: sales, gross profit and its margin across food, beverage and delivery together, labour as staff costs to revenue, EBITDA, cash, the current ratio and the board's runway lens. Food cost, beverage cost, prime cost and rent aren't separate figures on the board: their ledgers sit behind the cost and sales figures, one click away, and the formulas above take them from there.
Five mapping traps in a venue's books
- Stock counts. Food cost is right only when closing stock is updated. If it is counted quarterly, say so: the board can be told, and it then leads with the quarter to date.
- Delivery platform sales paid out net of commission need grossing up, with the commission as a cost, or delivery margin is invisible.
- Tips and service charges passed to staff aren't revenue; keep them on their own ledger.
- Fit-out and equipment finance. The fit-out is an asset depreciated over the lease; finance repayments aren't expenses.
- Tills and floats are cash, but small; don't let a float hide an overdraft.
Saltmarsh Kitchen, an invented restaurant, runs a prime cost of 69.4%
From the restaurant's trial balance over the six months to December 2025, in Australian dollars, worked by hand:
| Measure | Working | Result |
|---|---|---|
| Sales | Food 1,486,200 + beverage 612,400 + delivery 238,600 | A$2,337,200 |
| Food cost % | Food purchases 452,300 ÷ food and delivery sales 1,724,800 | 26.2% |
| Beverage cost % | 168,900 ÷ 612,400 | 27.6% |
| Labour % | (Kitchen 486,200 + front of house 398,600 + super 101,800 + workers' compensation 14,200) ÷ 2,337,200 | 42.8% |
| Prime cost % | (452,300 + 168,900 + 1,000,800) ÷ 2,337,200 | 69.4% |
Prime cost is above the 60 to 65% range many venues aim for, and labour is the larger part of the gap.
In Magic MIS, the same books loaded a month at a time give this board for December 2025:
Magic MIS wrote these sections of the commentary for December 2025, word for word. The AI wrote the sentences; the engine filled every figure, and each one opens to its ledgers on the board:
Performance
Revenue from operations for Dec 2025 was A$460,713.26, up A$31,142.86 (7.2%) on last month.
Direct costs were A$130,967.18, an increase of A$14,842.56 (12.8%), growing faster than revenue.
EBITDA was A$87,502.78, up A$7,995.97 (10.1%). Profit before tax was A$78,292.43, up A$7,963.94 (11.3%). Profit after tax was A$78,292.43, the same as profit before tax, and rose by A$7,963.94 (11.3%).
Working capital
Working capital was A$13,800.00, an increase of A$10,832.74 (365.1%) on last month, from a low base.
Cash and bank stood at A$145,800.00, up A$19,964.00 (15.9%). Inventories were A$61,000.00, up A$3,377.64 (5.9%). Trade payables were A$74,800.00, up A$3,672.20 (5.2%).
From the trial balance to the venue's pack
- Export the trial balance from Xero, MYOB, QuickBooks or whatever you use as Excel, CSV or PDF. There is no live connection.
- Upload it. Each ledger is placed once on a line of the report, by rules first and the AI only for what the rules can't place; check the sales streams, purchases and wages on the ledger map.
- Get a checked Excel workbook with live formulas, a board you change by chatting, and the month written up.
- Next month, upload the new trial balance: the placing is remembered, so it is a refresh, not a rebuild.
Click any figure on the board to see its working, the month and the ledgers behind it. It is prepaid credits with no subscription, and every action shows its price before it runs; see the credit packs.
What venues ask before they upload
Can Magic MIS work out food cost from a trial balance?
Its gross margin covers food, beverage and delivery together. Food cost takes the food purchase and sales ledgers, which are one click behind it, and is accurate when the stock ledger reflects the latest count.
What about covers, average spend or RevPAR?
Those need point-of-sale or room data, which isn't in a trial balance. The financial ratios come straight from it.
We run three venues. Can it consolidate them?
No. If each venue is its own company, each gets its own pack.
Does it work on a phone?
Magic MIS works in a desktop browser. A board shared as a read-only link opens on a phone.
Read next
- How do you calculate gross margin from a trial balance?(Revenue − direct costs) ÷ revenue × 100, with closing stock taken off direct costs. A worked example showing what the stock adjustment changes, and which ledgers count.Read
- How do you calculate staff cost as a percentage of fee income?Staff cost ratio = staff costs ÷ fee income × 100. What counts as a staff cost, a worked example, typical ranges for people businesses, and the traps in the ledgers.Read
- MIS commentary and variance analysis: how to write it so it gets readWriting the commentary in a monthly MIS or management accounts pack: which variances to explain, a materiality threshold, sentence patterns that work, and ones to avoid.Read
Build your venue's monthly pack from its trial balance
Create an account, load last month's trial balance, and get the report — paid per action.
Prepaid credits, no subscription.