| | Print
Restaurants need to analyze costs of pos, payments, and more

Between staying on top of industry trends and running day-to-day operations, restaurant managers and owners have a lot on their plates. If you’re in this position, perhaps the most important thing you need to pay attention to is your restaurant budget; it helps you keep your finger on the pulse of how the restaurant is faring.

If you’re constantly over budget, your restaurant will suffer. Identifying key factors that can negatively impact your restaurant’s budget is the first step toward taking charge and making necessary improvements. Below are 5 factors that negatively impact your restaurant’s budget.

1. Poor Inventory Management

An inventory management system is crucial to managing your budget, and yet many restaurants simply take inventory with paper and pen.  Most restaurants throw out between 4-10% of their inventory products due to a poorly managed inventory system.

Improve your inventory management with a dynamic inventory management software. You will give you a holistic view of your restaurant analytics in real-time, drive up the efficiency of your tracking systems, and help you manage your inventory supply with laser-sharp precision.

restaurant inventory reporting

2. Employee Retention Issues

The restaurant industry is notorious for high employee turnover rates.  In fact, it’s one of the main reasons that restaurants lose money every year.  You may think that it’s easy to rehire, so why should you worry about employee retention?  Well, according to a recent study by the Center for Hospitality Research at Cornell, the average cost of losing a typical front-line employee in hospitality is $5,864 per person.  

Take preventative measures to decrease employee turnover at your restaurant by:

  • Maintaining high morale
  • Rewarding top performing employees
  • Conducting exit interviews  to understand why people quit

3. Portion Control

Inconsistency and improper portion control negatively impact your restaurant in two ways:

  • Inconsistency creates unhappy customers. Your regular customer come to your restaurant with expectations based on prior experiences. If one day you serve them a sandwich piled high with savory cold cuts and the next day they get a skimpier version when ordering the same thing, they’ll likely go somewhere else where the portions are more reliable.  Consistency is key.
  • Incongruent portions result in profit loss. Some of your kitchen staff might be using more food than they’re supposed to in certain dishes.  Since the cost of the meal remains the same for the customer, you end up losing profit with each poorly portioned meal.  Again, an inventory management software, along with appropriate training of staff, is the perfect way to track this issue and pinpoint where the losses are most prevalent.

Guests eating a big meal at a restaurant

4. Employee Theft

Employee theft in restaurants is rampant and takes on many forms. Employees try to gain favor with customers for higher tips by giving away free food and drinks, and they may steal food and alcohol for themselves. These losses can really add up.

Identifying key factors that can negatively impact your restaurant’s budget is the first step toward taking charge and making necessary improvements.


By implementing a reliable inventory management system in your restaurant you can track all your food and beverage costs in real-time and always be aware of how your inventory is being utilized.  Improving your restaurant inventory tracking will help you mitigate employee theft and pinpoint where your losses are coming from.

Also, implement consequences for theft, and let your staff know what they are. If they are caught, they are fired. No questions asked.

5. Outdated Operating Systems

Point of sale (POS) systems keep restaurants running, but technology is changing faster than ever.  As modern restaurant systems evolve and improve, old systems fall further behind.  If your restaurant is using an outdated operating system, your business could be at risk.

By keeping your restaurant software up-to-date, you can accurately track all your restaurant expenses and improve overall customer experience.  From online reservations to mobile ordering, there are several ways that you can leverage your operating systems to get more customers in the door.    

Want your restaurant to turn a profit well into the future? It might be time to upgrade your operating system and start managing all your expenses more efficiently.

Learn more about how here.

Cloud-based Upserve POS is 48% cheaper than legacy solutions.

Schedule a Demo
Written by   |  
Brenda Stoltz is Marketing Manager at MarketMan. Restaurant managers and owners can simplify ordering, eliminate waste and jump-start profitability with MarketMan's low-cost, easy-to-use Restaurant Inventory Management system. Start your free trial at MarketMan.com.