What should a restaurant profit and loss template include?

Updated: 2026-10-20 · Dawwerni team · 7 min read

A restaurant profit and loss template starts with net sales excluding VAT or sales tax, subtracts cost of goods sold (food, drinks, packaging) to get gross profit, then subtracts operating expenses (labour, rent, utilities, marketing, commissions, repairs) to get operating profit. Taxes or zakat come after that line. Review it every month and watch prime cost, the sum of cost of goods and labour.

TL;DR

Always start from sales excluding VAT: the tax collected is not your money.
Gross profit = net sales − cost of goods sold; operating profit = gross profit − operating expenses.
Prime cost (cost of goods + labour) is the line you can act on fastest.
Use the same categories every month so the numbers can be compared.
A 30-minute monthly review beats a perfect annual report.

What is a restaurant profit and loss statement, in plain words?

A profit and loss statement (P&L, or income statement) answers one question for a period, usually a month: after paying for what you sold and what it took to run the restaurant, how much is left? It is not the same as your bank balance. Cash can be high because a supplier has not been paid yet, or low because you prepaid rent for the quarter. The P&L matches each cost to the period it belongs to, so you see whether the business itself makes money.

For a small restaurant or café, a simple monthly P&L with fixed categories is enough. Your accountant will still produce the official statements for tax purposes; this template is your management tool, the one you read to make decisions about menu prices, staffing and spending.

The restaurant P&L template, line by line

Here is a template filled with an illustrative example of a small restaurant for one month. The numbers are invented to show the method and add up correctly; they are not a benchmark. Replace them with your own figures and keep the percentage column: each line divided by net sales.

Line	Example amount (USD)	% of net sales	What goes in it
Net sales (excl. VAT / sales tax)	40,000	100%	Dine-in, take-away and delivery sales, after discounts and refunds
Cost of goods sold (COGS)	12,000	30%	Food, drinks and packaging used for the sales
Gross profit	28,000	70%	Net sales − COGS
Labour	12,000	30%	Salaries, wages, overtime, staff benefits and staff meals
Rent	4,000	10%	Rent and service charges
Utilities	1,600	4%	Electricity, water, gas, internet, phone
Marketing	800	2%	Ads, printing, loyalty and promotions
Commissions and fees	1,600	4%	Card fees, delivery app commissions
Repairs, supplies and other	1,200	3%	Maintenance, cleaning products, small equipment, software
Total operating expenses	21,200	53%	Sum of the six lines above
Operating profit	6,800	17%	Gross profit − total operating expenses
Tax / zakat provision (example)	600	1.5%	Depends on your country and structure; ask your accountant
Net profit (example)	6,200	15.5%	Operating profit − tax provision

Check that your template adds up

In the example: 40,000 − 12,000 = 28,000 gross profit. Operating expenses are 12,000 + 4,000 + 1,600 + 800 + 1,600 + 1,200 = 21,200. Operating profit is 28,000 − 21,200 = 6,800. Build the same checks into your spreadsheet so a missing line never goes unnoticed.

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How do you calculate each line correctly?

Net sales: always excluding VAT

If your menu prices include VAT or sales tax, divide the total by (1 + the tax rate) to get net sales. VAT is collected for the government; counting it as revenue inflates every percentage below. Deduct discounts, comps and refunds as well.

Cost of goods sold: what you used, not what you bought

Purchases alone mislead, because stock goes up and down. For the month: COGS = opening stock + purchases − closing stock. If your POS links a recipe to each dish, it can also compute a theoretical COGS from sales; the gap between the two shows waste, over-portioning or theft. Our article on the food cost percentage formula explains both methods, and the free food cost calculator gives the cost of each plate.

Labour: the full cost, not just salaries

Include wages, overtime, mandatory contributions, staff meals and benefits such as housing or transport where you pay them. Accurate hours make this line reliable; a staff attendance app for restaurants gives you hours per employee for the month.

What is prime cost and why do owners watch it first?

Prime cost is cost of goods sold plus labour. In the example above it is 12,000 + 12,000 = 24,000, or 60% of net sales. These two lines are the largest you control week to week: rent is fixed by a lease, but portions, waste, supplier prices, menu prices and staffing levels can change this month.

There is no universal target, because a fine-dining room and a burger counter have very different structures. The useful benchmark is your own history: if prime cost rises two months in a row, find out whether food cost or labour moved, and why.

Food cost up? Check supplier prices, portion sizes, waste and recipes that have drifted.
Labour up? Compare hours with sales per day and look for quiet shifts with full teams.
Both stable but profit down? Look at commissions, utilities or a drop in sales.

A 30-minute monthly P&L review routine

Profit also grows from the top line. A restaurant that brings first-time guests back more often raises sales without raising rent. Estimate what repeat customers are worth with the loyalty and lost-revenue calculator, and see how to cut the biggest cost in how to reduce food cost in a restaurant.

Close the month: count stock on the last day and collect all supplier invoices and expenses.
Fill the template with the same categories as last month.
Compare each percentage with last month and the same month last year.
Pick the one line that moved the most and find the cause.
Decide one action: a price change, a recipe adjustment, a shift change or a supplier call.
Write the action and check its effect in next month’s P&L.

Common mistakes in a restaurant profit and loss

Counting sales including VAT, which inflates revenue and hides real margins.
Using purchases instead of COGS, so a big stock order looks like a terrible month.
Forgetting the owner’s own salary, making a fragile business look profitable.
Mixing annual costs (licences, insurance) into one month instead of spreading them.
Changing categories every month, so nothing can be compared.
Ignoring stock adjustments: spoiled, broken or missing items are a real cost.

How does Dawwerni POS build the P&L for you?

The POS records operating expenses by category, such as salaries, rent, electricity, water, gas, internet and marketing, as one-off or recurring monthly entries. With the inventory and recipes pack, each paid order captures the recipe cost at the moment of sale. The profit and loss view then shows any period in your POS currency: revenue excluding VAT, minus cost of goods, minus operating expenses, equals operating profit, with tax and zakat lines after it and stock losses or gains from manual corrections shown separately. You can export it to CSV for your accountant. Explore the restaurant features.

FAQ

How often should a restaurant prepare a profit and loss statement?

Monthly is the right rhythm for most small restaurants and cafés. Weekly is useful for prime cost if margins are tight. Annual statements from your accountant are still needed for tax, but they arrive too late to fix a problem in time.

Should restaurant sales on the P&L include VAT?

No. Use net sales excluding VAT or sales tax. The tax you collect belongs to the government and is paid out later. Including it inflates revenue and makes every cost percentage look smaller than it really is.

What is a good profit margin for a restaurant?

There is no single figure that fits every concept, city and size. Compare your operating profit percentage with your own past months and the same month last year, and ask your accountant what is typical for businesses like yours locally.

Where do delivery app commissions go on the P&L?

Record sales at the full net amount and put the commission as an operating expense, in a commissions and fees line. That way you see the real cost of each channel instead of hiding it inside lower sales.

Is a spreadsheet enough for a restaurant P&L?

Yes, to start. Keep fixed categories and built-in totals. A POS that links recipes and expenses saves the monthly data collection and reduces errors, but the review routine matters more than the tool.

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