The Owner's Notebook
Home / Finance & Accounting
Section 06 of 08

Finance & Accounting

You cannot manage a restaurant from the bank balance. Learn to read the P&L, watch prime cost weekly, and know the sales number you have to clear before anything is profit.

Start here

Read these 5 in order if the subject is new to you.

  1. How to Read a Restaurant P&L StatementYour P&L is the scoreboard for your restaurant. Here's how to read every line — sales, COGS, labor, prime cost, and profit — and what each number should be.
  2. Understanding Prime Cost and Why It MattersPrime cost = cost of goods sold + total labor. Here's how to calculate it, what a good prime cost is, why it beats food cost alone, and how to control it weekly.
  3. Restaurant Break-Even Analysis ExplainedBreak-even is the sales number where your restaurant stops losing money and starts making it. Here's the formula, a worked example, and how to lower it.
  4. Cash Flow Management for RestaurantsA profitable restaurant can still run out of cash. Here's how to manage cash flow — timing, reserves, and forecasting — so you never miss payroll or rent.
  5. Key Restaurant Financial Metrics to TrackYou can't manage what you don't measure. Here are the essential restaurant financial metrics — with formulas and targets — every owner should track.

Tools for this section

All 36 guides in this section

01 How to Prepare Restaurant Payroll for Year-End and W-2 FilingGet restaurant payroll ready for W-2 and 1099 season. A step-by-step year-end checklist covering tips, reconciliation, bonuses and filing deadlines. Worksheet4 min 02 How to Calculate Revenue Per Seat and Revenue Per Square FootLearn how to calculate restaurant revenue per seat and per square foot, what good numbers look like, and how to raise both. Free Excel calculator included. Worksheet4 min 03 How to Budget for the January Slow Season at Your RestaurantPlan your restaurant's January slump now. Forecast sales, cut costs by category, build a cash cushion and use a free budget worksheet to stay profitable. Worksheet4 min 04 How to Set Up a Tax Reserve Account for Your RestaurantSet up a separate tax reserve account so sales tax, payroll tax and income tax are never spent. Learn the percentages to transfer and when to move it. Worksheet4 min 05 How to Use a Business Line of Credit for Your RestaurantHow a restaurant line of credit works, when to use it, what it costs and how to avoid the debt trap. Includes a free cost calculator. Worksheet3 min 06 How to Build a 13-Week Cash Flow Forecast for Your RestaurantA 13-week cash flow forecast shows if your restaurant can cover rent, payroll and vendors before the money runs short. Build one step by step. Worksheet4 min 07 How to Account for Gift Card Liability at Your RestaurantGift cards are a liability, not revenue, until redeemed. Learn how to record them, track balances, handle breakage and avoid a year-end surprise. Worksheet5 min 08 Year-End Tax Planning for Restaurant OwnersYear-end tax planning for restaurant owners — the Q4 moves (equipment, timing, retirement, tip credit) that cut your 2026 bill before December 31. Worksheet6 min 09 How to Handle Credit Card Chargebacks at Your RestaurantA chargeback pulls the sale, the food, and a fee out of your account at once. Here's how to fight one, what evidence wins, and how to stop the next ten. Worksheet5 min 10 Should Your Restaurant Add a Credit Card Surcharge?More restaurants are adding 3% card surcharges. Here's the math, the legal rules by state, and how to decide without driving guests away. Worksheet4 min 11 How to Sell Your RestaurantWhat your restaurant is really worth, how to get the books ready, where buyers come from, and how much you actually keep after debt, fees, and taxes. Worksheet6 min 12 Understanding Restaurant ValuationHow restaurants are valued - SDE and EBITDA multiples, what drives the number up or down, and how to estimate what your restaurant is worth before you sell. Worksheet3 min 13 Managing Debt and Restaurant LoansHow to manage restaurant debt and loans without drowning - track every balance, prioritize payoff, keep your debt-service ratio safe, and borrow on purpose. Worksheet3 min 14 How to Set Up Restaurant Financial ReportsSet up the core restaurant financial reports - P&L, balance sheet, cash flow, and weekly flash - so you always know how your restaurant is really doing. Worksheet3 min 15 How to Improve Cash ReservesHow to build a restaurant cash reserve that survives slow seasons and surprises - set a target, fund it automatically, and protect it from being spent. Worksheet3 min 16 How to Do a Monthly Financial CloseA step-by-step monthly financial close for restaurants - reconcile sales, count inventory, book expenses, and produce clean statements in a repeatable checklist. Worksheet3 min 17 Depreciation and Equipment Write-Offs ExplainedDepreciation and Section 179 write-offs for restaurants explained in plain English - how to spread or deduct equipment costs and cut your tax bill legally. Worksheet3 min 18 When to Hire an Accountant or BookkeeperDoing your own books until 2am? Here's when a restaurant should hire a bookkeeper vs. an accountant, what each does, what it costs, and how to know it pays off. Worksheet3 min 19 Understanding Sales Tax for RestaurantsSales tax you collect isn't your money. Here's how restaurant sales tax works, what's taxable, how to set it aside, and how to file without a costly surprise. Worksheet3 min 20 Understanding Restaurant Cash Handling ControlsCash goes missing when nobody's accountable. How to set up cash handling controls — drawer counts, deposits, separation of duties — that stop theft and errors. Worksheet3 min 21 Setting Up a Chart of Accounts for RestaurantsA restaurant chart of accounts organizes your money so your P&L actually tells you something. Here's a standard structure you can copy and adapt. Worksheet3 min 22 How to Reduce Credit Card Processing FeesCard fees quietly skim 2-4% of your sales. Here's how restaurant processing fees work and the legitimate ways to cut them without hurting the guest experience. Worksheet3 min 23 How to Price for a Target Profit MarginWant a specific profit margin? How to price menu items backward from your target — accounting for food cost, labor, and overhead — so the margin is built in. Worksheet3 min 24 How to Handle Payroll and Payroll TaxesRestaurant payroll means tips, tip credits, overtime, and withholding done right. Here's how to run payroll and stay compliant with payroll taxes without a mess. Worksheet3 min 25 How to Forecast Restaurant RevenueLearn how to forecast restaurant revenue using covers, average check, and seasonality — a practical method to project sales for budgeting, staffing, and cash flow. Worksheet3 min 26 How to Build a Financial DashboardStop waiting for month-end to know how you're doing. How to build a restaurant financial dashboard around the handful of numbers that actually run the business. Worksheet3 min 27 Controlling the 5 Biggest Restaurant ExpensesThe five costs that decide your profit — food, labor, occupancy, and more — what each should run as a percent of sales, and how to control each one. Worksheet3 min 28 Restaurant Break-Even Analysis ExplainedBreak-even is the sales number where your restaurant stops losing money and starts making it. Here's the formula, a worked example, and how to lower it. Worksheet3 min 29 Restaurant Bookkeeping BasicsGood books are the foundation of a profitable restaurant. Here are the bookkeeping basics — accounts, daily sales, reconciliation, and reports — done simply. Worksheet3 min 30 Key Restaurant Financial Metrics to TrackYou can't manage what you don't measure. Here are the essential restaurant financial metrics — with formulas and targets — every owner should track. Worksheet3 min 31 How to Set a Restaurant BudgetA restaurant budget turns hope into a plan. Here's how to build one from your sales forecast, set target percentages for every cost, and hold the line. Worksheet3 min 32 How to Read a Restaurant P&L StatementYour P&L is the scoreboard for your restaurant. Here's how to read every line — sales, COGS, labor, prime cost, and profit — and what each number should be. Worksheet3 min 33 How to Manage Restaurant TaxesRestaurant taxes are more than April 15. Here's how to manage sales tax, payroll tax, tip reporting, and deductions so you stay compliant and keep cash safe. Worksheet3 min 34 How to Improve Your Profit MarginRestaurant margins are thin, but they're improvable. Here are the highest-impact levers — pricing, prime cost, waste, and mix — to grow your bottom line. Worksheet3 min 35 Cash Flow Management for RestaurantsA profitable restaurant can still run out of cash. Here's how to manage cash flow — timing, reserves, and forecasting — so you never miss payroll or rent. Worksheet3 min 36 Understanding Prime Cost and Why It MattersPrime cost = cost of goods sold + total labor. Here's how to calculate it, what a good prime cost is, why it beats food cost alone, and how to control it weekly. Worksheet5 min
Who pays for all this

Still paying $470+/mo for your POS?

The Notebook is free because Cobblestone POS pays for it - a free, all-in-one POS for independent restaurants with AI assistant, online ordering, scheduling and loyalty included.

See Cobblestone POS →