The Evisory Accountant's 5 Critical Numbers: Your Daily Hospitality Accounting Checklist
A Message to Australian Cafe and Restaurant Owners
Welcome to the few. If you're running a cafe or restaurant in Australia, you're constantly fighting rising costs—from fresh produce to penalty rates. To survive and scale, you need to ignore vanity metrics (like how many coffees you sold) and focus on the Five Critical Numbers that actually determine your profitability.
These five numbers are your levers for profit. Master them, and you master your path to a $5 million business.
Stop Chasing Vanity Metrics
The 5 Critical Numbers: Your Accounting Control Panel
| # | Critical Number | Definition (Simply Explained) | Your Goal | Your Action Step (Daily/Weekly) |
|---|---|---|---|---|
| 1 | Prime Cost % | The total cost of your Goods Sold (COGS) % (food and beverage) combined with your Total Labour Cost % (wages, super, & penalty rates). | Target ≤ 60% | Run a Daily Flash Report to track this figure. If your Prime Cost exceeds 60% for the day, you must adjust the next day's roster or ordering immediately. This is your core operational lever. |
| 2 | Net Profit Margin % | The final percentage of revenue you actually keep after all expenses—including rent, utility bills, and GST/BAS payments. | Target 8% - 15% | Track this figure monthly. Compare it against Aussie industry benchmarks for cafes and restaurants. If your margin is thin, one of your cost lines is inflated. |
| 3 | Labour Hours Per Cover (LHPC) | Your total weekly labour hours divided by the total number of guests/covers served in that week. (A 'cover' is a guest served). | Minimize for Efficiency | This KPI measures the efficiency of your staffing. A high LHPC indicates you are over-rostering relative to your sales volume, often due to poor scheduling around penalty rates. |
| 4 | Inventory Variance % | The difference between your Theoretical Inventory (what should be there based on your POS sales) and your Physical Inventory (what is there). | Target ≤ 2% Variance | Conduct a Physical Stocktake (audit) on your high-cost items (e.g., premium wine, meats) every week. A variance over 2% signals shrinkage (waste, error, or theft). |
| 5 | Cash Runway (in Days) | Your current cash balance divided by your average daily operating expenses (excluding major one-off payments like quarterly BAS/Super). | Target ≥ 90 Days | Maintain a simple 90-Day Cash Flow Forecast. This allows you to plan ahead for big quarterly outflows like BAS (GST & PAYG) and Superannuation. Never be surprised by a tax bill again. |
🚀 The Next Step: From Tracking to Scaling Your Business
Tracking these 5 numbers is the bare minimum for business health in the Australian market. But imagine if this was automated, saving you hours every week.
As Evisory Accountants, we specialize in implementing the local tech stack—integrating your POS (like Square or Lightspeed) with your accounting software (like Xero or QuickBooks) to automatically track these metrics. This frees you from the books so you can focus on being a thought leader and scaling your business to $5 million.
You cannot get to $5 million by chasing receipts and penalty rate calculations. You get there by leading.
Ready to automate your business accounting and eliminate guesswork?
Click the link below to book a complimentary 15-minute discovery session with our team. We'll show you exactly how our automated solutions will integrate with your POS and payroll systems to track these 5 numbers for you, every day.