Restaurant Cash Flow: How to Forecast and Manage It

A restaurant’s cash is won or lost week by week: in the ordering, the rota and how many covers come through the door. Margins are thin, so small drifts in food cost or labour quickly become a cash problem. This playbook sets out a weekly routine and the controls that keep cash healthy. For why restaurant cash flow is different and a worked example, see the restaurant cash flow forecast page.

The weekly routine

Every Monday, before orders and rotas are finalised:

1. Last week’s actuals: sales by channel, food and drink purchases, labour, and the bank balance.
2. Prime cost check: food, drink and labour as a percentage of sales. Is it on target?
3. This week’s forecast: covers and sales by day, based on bookings, events, weather and the same week last year.
4. Order and roster to the forecast, not to last week.
5. Upcoming payments: rent, payroll, supplier accounts, delivery commission, tax, licences.
6. The lowest balance in the next four weeks, against your buffer.

Prime cost: the number that matters most

Prime cost = food cost + beverage cost + labour cost

Many full-service restaurants aim for prime cost around 55 to 65 percent of sales, depending on the concept. Track it weekly:

Four points over target on $26,000 of weekly sales is about $1,000 a week, or more than $50,000 a year. Small weekly drifts are where restaurant cash disappears.

A worked week

On Monday, the manager sees last week’s prime cost at 65 percent against a 61 percent target. Food cost was high because a produce order was based on the previous, busier week; labour was high because two extra staff were rostered for a private event that cancelled. The bank balance is $14,200, and next week’s forecast shows rent of $9,000 and a supplier account of $6,500 due on the same day.

Actions: the next produce order is cut to the week’s forecast covers, the cancelled event’s deposit is kept as the contract allows, next week’s rota is reduced by one server on the quietest two nights, and the supplier is asked to take payment three days later, after the weekend’s takings have settled. By Friday, prime cost is back to 61 percent and the balance never drops below the buffer.

Card fees, tips and cash handling

Card processing fees are a real cost on most sales, often 1.5 to 3 percent depending on your provider and card mix. Include them as a percentage of card sales in the forecast, and review your provider’s rates annually. Tips paid through payroll add to labour cost and must be paid out on time; forecast them with payroll. If you still take cash, bank it regularly, reconcile takings daily, and forecast deposits in the day they reach the bank, not the day they’re taken.

Ordering to sales

• Base orders on the week’s sales forecast and current stock, not habit.
• Count key items weekly; compare usage with sales to spot waste and portioning problems.
• Review menu prices when supplier prices rise, rather than absorbing the increase.
• Agree delivery schedules that let you order smaller, more often.
• Check supplier invoices against deliveries and prices.

Rostering to sales

• Build rotas from forecast covers by day and service.
• Review the rota mid-week if bookings change.
• Track labour as a percentage of sales daily in busy periods.

Delivery apps and other channels

Delivery platforms pay out after deducting commission, often weekly. In your forecast:

• enter delivery sales net of commission, or gross with commission as a separate cost
• put the payout in the week it actually arrives
• review whether delivery margins justify the channel after commission, packaging and labour

Gift cards and deposits

Gift card sales and event deposits are cash in now for meals you’ll serve later. Keep a running total of outstanding gift cards and deposits, and hold enough in reserve to honour them, especially after December, when gift card sales peak.

Planning for quiet months

Most restaurants have predictable slow periods, often January and February, and sometimes summer for city-centre sites. Forecast them from last year, then:

• set aside part of December’s surplus
• plan reduced opening hours or menus
• schedule repairs, deep cleans and refurbishments for the quiet weeks
• plan events and promotions to lift covers

Equipment and repairs

Refrigeration, dishwashers, ovens and extraction don’t fail on schedule, and a busy weekend without a working fridge is expensive in lost stock as well as repairs. Keep a monthly repair allowance in your forecast and a small reserve for a major failure. Planned servicing is cheaper than emergency call-outs.

Tax and licences

Sales tax or VAT collected on every bill isn’t your money, and in a busy restaurant it builds up quickly. Move it to a separate account weekly and forecast each payment on its due date. Alcohol licences, food hygiene inspections and music licences are annual or periodic costs that belong in the cash calendar.

Warning signs

• Prime cost creeping up week after week
• Supplier accounts paid later than usual
• Using gift card or deposit cash for running costs
• Covers down on last year for several weeks
• Delivery sales growing while cash doesn’t
• Rising waste or unexplained stock variances
• Staff overtime becoming routine rather than occasional

When cash gets tight

1. Tighten ordering and rostering to the forecast immediately.
2. Review the menu for low-margin items.
3. Talk to key suppliers early about terms.
4. Delay non-essential spending and equipment upgrades.
5. Consider a short-term facility, with a plan to clear it in the next strong season.

Tools

The premium Restaurant template includes a Food & Card Costs tab that ties food, drink, delivery commission and card fees to the sales they come from, a 13-week weekly view for rotas and orders, scenarios for quiet months, and a dashboard. See also the weekly forecast guide and seasonal cash flow.