A guide to building the monthly food and beverage report of a hotel under the hospitality standard

Every month end, the hotel restaurant hands in a report and the controller sends it back with questions: why is the pool bar added into the restaurant, where did the room charges go, why do tips show up as sales. Nobody is acting in bad faith. The restaurant reports like a restaurant, and the hotel needs it to report like a department of the hotel. This guide closes that gap.

Why a hotel restaurant report is different

A street restaurant has one owner of its numbers: itself. A hotel restaurant is a department inside a property, and its figures are consolidated with rooms, with banquets, with the minibar and with laundry. The hospitality accounting standard, known as USALI, exists so that the department reads the same in any hotel in the world and so that food and beverage profit can be compared with rooms profit without arguing about definitions every time.

That changes three things in practice. First, revenue is reported by revenue center, not as one total. Second, cost of sales is split into food and beverage. Third, payroll and departmental expenses are presented in a fixed order that ends in departmental profit, which is the number the owner and the general manager look at first. If you have already read what the standard is and why it pays off even in a small hotel (What USALI is and why it pays off even with twenty rooms), here is the practical part: how to build the report.

The order the controller expects

Before filling a single cell, memorize the structure. The food and beverage report walks down like a staircase: revenue, minus cost of sales, equals gross profit; minus payroll and related expenses; minus other departmental expenses; equals departmental profit. Each step has its own line and they do not mix. The controller reads top to bottom and expects to find every block where the standard puts it.

Notice what is not there: rent, energy, maintenance, hotel marketing. Those are undistributed expenses of the property and live elsewhere in the income statement. The restaurant does not carry them and the controller does not expect them there. Put them in and your departmental profit comes out artificially low, and nobody can compare it with rooms or with the same month last year.

Step 1: revenue by revenue center

Revenue is the first line and the one that brings the most mistakes. There is one rule: net sales, by revenue center, in the month the consumption happened. Net means without tax, without tips and with discounts and comps already deducted. By revenue center means the pool bar gets its own line even if it sells little, because the controller’s question next month will be exactly that: how much did the pool sell.

Room charges are restaurant revenue

Here is the most common trap in a hotel. The guest signs the check, says “To my room, please”, and the money arrives at the front desk on check-out, sometimes in another month. That consumption is restaurant revenue on the date of consumption, not rooms revenue on the date of payment. If the point of sale ties every charge to the guest folio, the report brings it in by itself. If the charge lives in a text field or a notebook, someone will add it wrong or not add it at all. The room charge page (Room charge) explains what a charge verified against the folio looks like.

Included breakfast and all inclusive

When the rate includes breakfast, part of rooms revenue is actually food revenue. The standard asks you to separate it with a fixed allocation value per guest and apply it the same way every day. Posting breakfast at zero punishes the restaurant; posting it at menu price rewards it too much. Define the value with the controller once and do not change it mid-season, because you break the comparison with last year.

• Restaurant: table sales, with and without room charge, including breakfast at its allocation value.
• Bar: counter and bar table sales, with its own beverage line.
• Room service: everything delivered to the room, no matter who collected or when.
• Pool and beach bar: charges from the lounger, almost always to the room.
• Banquets and groups: contracted events, separated from daily sales.
• Minibar: consumption verified by housekeeping and posted to the folio.
• Other revenue: room rental, corkage, coffee service for meetings.

Step 2: cost of sales, food and beverage separately

Cost of sales is not what you bought during the month. It is what you consumed: opening inventory, plus purchases, minus closing inventory. From that consumption you subtract what left the storeroom without being a sale: employee meals, which are reclassified to payroll, and comps, which are reclassified to promotion expense or stay in cost depending on hotel policy. What remains is the real cost of sales for the month.

Food and beverage are calculated separately because they have different margins, waste and risks. A combined cost of 28 % can hide food at 34 % and beverage at 16 %, and that combination describes a restaurant with a kitchen problem and an excellent bar. Added together, the problem disappears from the report and stays in the operation. The controller will ask for both numbers and will ask about each one.

You need at least two physical inventories a month: one at the close of the previous month, which is your opening, and one at the close of this month, which is your closing. If the storeroom and the bar count on different dates, the cost is distorted without anyone noticing. Close everything on the same day and at the same hour as the last sales close.

Step 3: payroll and other departmental expenses

Payroll and related expenses

This is where all the department’s wages go: servers, kitchen, bar, captain, cashier, steward, and the proportional share of the food and beverage manager if they also handle banquets. Add benefits, social security, accrued vacation and the employee meals you pulled out of cost of sales in the previous step. The result is the total cost of the people who make the hotel restaurant run.

A frequent mistake in small hotels is leaving the restaurant manager in the administration payroll because “they get paid in the same cycle as the general manager”. If they work for the restaurant, their cost belongs to the restaurant. The controller will move it anyway; better to skip that step and hand in payroll already classified.

Other departmental expenses

This is the most forgotten line and the one that surprises the most at year end. It includes linen and tablecloths, replaced glassware and china, the department’s laundry, kitchen cleaning supplies, music and licenses, delivery platform commissions, uniforms, stationery, gas if the property meters it by department, and the bank fees of the restaurant’s card terminals.

What does not go in: rent, general energy, building maintenance, hotel advertising. That belongs to the property. When in doubt, the question that settles it is this: if you closed the restaurant tomorrow, would this expense disappear? If yes, it belongs to the department. If not, it belongs to the property and goes elsewhere.

An illustrative example with numbers

The figures below are invented to show the calculation. They do not describe any real hotel or any market average. They only serve to see how the staircase walks down and how each step is read.

In the example, food cost is 30 % and beverage cost is 22 %. Departmental profit of 102,000 on 340,000 of revenue is 30 %. That percentage is what the owner will compare against rooms and what the controller will follow month after month. If next month revenue rises to 360,000 but profit drops to 90,000, the report by blocks tells you on which step the money went. A single total never does.

The mistakes that make the controller send the report back

• Adding tips to sales because they land in the same drawer. Tips belong to the server and are never hotel revenue.
• Reporting sales with tax. Tax is a liability you collect for the government, not revenue.
• Leaving room charges out because the front desk collected them. They are restaurant sales on the date of consumption.
• Using the month’s purchases as cost of sales. Without opening and closing inventory, cost does not exist.
• Mixing food and beverage into one cost. The standard wants them separate and so does the controller.
• Putting rent, energy and maintenance into departmental expenses. They belong to the property.
• Closing sales on one cut-off date and inventories on another. The cost comes out distorted.
• Changing the allocation value of included breakfast mid-season. It breaks the comparison with last year.

A six-day closing calendar

The report runs late when every piece arrives whenever it can. A short calendar, always the same, keeps the controller from chasing the restaurant and the restaurant from chasing accounting. This is an order that works in properties of any size.

1. Day 1: close the last shift of the month with a close by revenue center and reconcile room charges against the front desk folios.
2. Day 1, at night: physical inventory of storeroom, kitchen and bars, with the same cut-off hour as sales.
3. Day 2: record purchases still waiting for an invoice as an accrual and classify comps and employee meals.
4. Day 3: calculate food cost and beverage cost and explain any jump of more than two points against the previous month.
5. Day 4: receive payroll and other expenses from accounting and check that nothing from the property slipped into the department.
6. Day 5: assemble the report in the order of the standard, with a one-line comment for every relevant variance, and send it to the controller.

What to do this week

1. Ask the controller for the standard template the hotel uses and compare it line by line with what the restaurant hands in today.
2. Review the close of any given day: separate tax, tips and room charges, and confirm that net sales match the point of sale.
3. Agree with the controller on the allocation value of included breakfast and write it down in a one-page policy.
4. Schedule the closing physical inventory for the same hour as the last close of the month, in storeroom, kitchen and bars.
5. Make a list of departmental expenses versus property expenses and settle the doubts with the “if I closed the restaurant tomorrow” question.

Inn Restaurant delivers revenue by revenue center, cost of sales split in two and room charges tied to the guest folio, in the order the controller expects; you can see how the reports are built on the reports page (Reports). If you want to see a month-end close with your own revenue centers, book a 15-minute demo at (contact).