Food cost tracking comes down to consistent inventory counts, accurate purchase tracking, and doing the math regularly enough to catch problems before they eat your margin.

The basic formula is beginning inventory plus purchases minus ending inventory. That gives you cost of goods sold for the period. Divide by food sales to get your food cost percentage. Most restaurants target somewhere between 28 and 35 percent depending on the concept. Fast casual runs lower. Full service and fine dining run higher.

Weekly tracking beats monthly by a mile. Monthly food cost shows up on your financial statements but doesn’t help you operationally. By the time you see that March ran 38 percent instead of 32 percent, you’ve already lost thousands. Weekly numbers let you spot problems while you can still fix them.

Inventory counts work best when they’re systematic. Count at the same time each week, ideally right before a delivery when inventory is low. Use a count sheet organized by storage location so you’re not wandering between the walk-in and dry storage. Count everything in consistent units. Switching between pounds and cases makes your numbers unreliable.

Track purchases by category rather than dumping everything into one food cost bucket. Breaking out proteins, produce, dairy, dry goods, and beverages shows you where cost increases are actually coming from. Restaurants and bars that track this way can pinpoint whether rising costs are from protein price swings or produce waste rather than guessing.

Compare your actual food cost to theoretical food cost. Your POS system knows what you sold and what the recipes should cost. The gap between theoretical and actual reveals waste, over-portioning, theft, or items that got comped but not recorded. A few percentage points of variance is normal. More than that needs investigation.

The accounting side matters too. Your monthly financial statements should show food costs broken out in useful categories, not just a single COGS line. Scottsdale bookkeeping services that understand hospitality can structure your chart of accounts and reporting to actually support operational decisions. But the raw data has to come from the kitchen. Weekly counts and organized purchase records are the foundation everything else builds on.

Restaurants that track food costs consistently can adjust pricing, portions, and menu mix before small problems become big losses. The ones that don’t end up reacting to cash flow crunches without understanding what caused them.