Comparing your actual income and expense numbers to what you have budgeted is a vital step in the process of staying on course for profitability. Remember you created a budget using last years actual numbers along with educated guesses. You posted them side by side in a budget forecast sheet. Now you have to do your work and track what is happening in your restaurant this year. So you create a sheet using your forecasted numbers for this year and insert this years revenue and expenses in the column next to the forecasted number. Below is an example of what this would look like. Notice that the sales for February are higher than projected. That is a very good thing. The cost of goods are also higher than projected. That is to be expected with the increase in sales, you would have to use more product. Look closer and you will see a problem that needs to be addressed. The cost of goods was forecast to be at 32.42% but is actually at 35.14%. That means that you have a 2.72% higher cost of goods then you predicted That means you lost $901.00 of Gross profit because you did not maintain the cost of goods that you forecast. I know the tendency would be for you to say but look our gross profit is $5536.00 more than we forecast. That is all because of the increase in sales. If you had maintained the food cost at the level that you had forecast the Gross profit would have been $6437.00 more than forecast. My point is that there may be months where your sales are lower than forecast and so maintaining cost percentages is important for every month. This also will give you a heads up on a possible problem in the cost of goods. There may be a reason for the increase in the cost percentage but it should be known what that is. The same is true for all expenses. look at the overall percentage of sales that it uses and explain the difference from what you budgeted.
Nest we will look at how to track the two most controllable expenses on a daily and weekly basis, so you can react before you get to far off what you forecasted.