As the year winds down and we count the days until the calendar flips, the last thing any restaurateur wants is a mad dash to organize numbers and make sense of the past twelve months. 

Whether your fiscal year wraps up on December 31st, February 1st, or somewhere in between, starting the new year with clarity—and without stress—sets the tone for success.

The secret to starting strong? Reviewing the right reports ahead of time. Instead of scrambling in January to analyze your restaurant’s performance (if you're following the calendar year), take the time now to reflect, strategize, and prepare.

These key documents unlock actionable insights into your restaurant’s profitability, cost management, and operational efficiency—giving you the power to kick off the new year with a plan rooted in insights, not guesswork.

Let’s dive into the essential reports every restaurateur should review before year’s end, along with actionable steps to make the most of them in the new year.

Profit and Loss Statement (P&L)

What It Is

A Profit and Loss (P&L) statement summarizes the total income your restaurant generated over the year alongside the money it spent. It’s your go-to report for understanding high-level financial performance over a set period, helping you pinpoint gaps and areas for improvement.

Why It’s Important

Whether you need a detailed sales breakdown, a clear view of labor costs, or a snapshot of your net profit for the year, the P&L statement provides that.

By pinpointing the most profitable revenue streams, flagging high costs that might be cutting into margins, and evaluating menu pricing effectiveness, it highlights exactly where to focus. 

Whether it’s uncovering overspending in fixed or variable expenses or identifying opportunities for growth, the P&L sets the stage for a more profitable and efficient year ahead.

How to Turn Year-End Insights Into Action

When you run your P&L statement report, it will provide insights into which parts of the business are profitable and where investment might generate further growth, helping set realistic goals in the new year.

Let’s look at a few examples:

If the report shows rapid growth in drive-thru or delivery sales, consider strengthening delivery platform partnerships, optimizing the online menu, or expanding loyalty programs to maintain momentum in the new year.

A decline in gross profit margin and high COGS might indicate rising food costs or inefficiencies. Address this by refining menu engineering strategies, renegotiating vendor contracts, or investing in a recipe costing tool. Reducing over-ordering, waste, and portioning errors can also bring COGS back under control.

For high labor or operating costs, evaluate staffing levels to ensure alignment with demand or reallocate budgets where needed. 

What You Can Do Now

Start by gathering year-to-date financial data using a restaurant P&L statement template or accounting software to ensure accuracy and consistency.

Meet with your accountant or bookkeeper to review entries, confirm they’re up to date, and verify everything is categorized correctly. This ensures a clean and reliable report to work from.

Pull prior years’ reports to compare with this year’s numbers. Spotting trends over time can reveal opportunities for growth or areas needing attention that might have gone unnoticed.

Schedule a meeting with key stakeholders to review your findings and begin setting financial priorities for the upcoming year.

Balance del restaurante

What It Is

While the P&L tells you how much money you’re making (or losing), a restaurant Balance Sheet shows what you own versus what you owe – assets, liabilities, and equity.

Why It’s Important

A restaurant Balance Sheet provides a full picture of financial health, answering critical questions like: Can we sustain operations with the resources we have? Are we financially stable enough to grow or expand? Do we have the leverage to secure favorable loan terms?‍

It reveals if restaurant assets can cover liabilities, whether the debt is manageable, and how much equity is built into the business. 

By analyzing these details at year-end, restaurant owners can decide where to invest and cut back in the upcoming year. 

How to Turn Year-End Insights Into Action

Take a look at the value of everything the restaurant owns. This includes the equipment, inventory, cash, and accounts receivable. Can the cash and accounts receivable cover short-term liabilities like wages, accounts payable, rent, and utilities? If not, consider adjusting spending in the new year or securing more financing. 

Is equity positive or negative? Positive equity means the business owns more than it owes, which is a good sign of financial health. Negative equity could mean ongoing losses or too much debt. In this case, it may be necessary to focus on cutting costs or paying down debt.

What You Can Do Now

Compile the latest data on assets, liabilities, and equity and ensure bank accounts, vendor payments, and any outstanding invoices are fully reconciled in your accounting software.

Schedule a final review with your accountant to confirm all data is accurate and properly categorized.

Use these insights to align cash flow management strategies or decide on investments for the new year.

Sales Report

What It Is

A sales report provides a detailed breakdown of revenue across all sources, such as menu items, categories, and sales channels. It offers insights into patterns like peak sales times, seasonal trends, and customer preferences, highlighting which areas are driving revenue and which need attention.

Why It’s Important

Analyzing sales trends reveals customer preferences throughout the year, highlights menu items that flew off the shelves vs. those that were difficult to sell, and uncovers times operations were the busiest.

This report, along with a menu profitability report, helps restaurants optimize menu prices and operational hours while identifying trends to capitalize on in the new year. 

How to Turn Year-End Insights Into Action

Identify the top-selling menu items from the past year and examine how seasonal trends may have influenced time-based patterns. Use these insights to refine the menu, introduce new specials, or eliminate low-selling, profit-draining items.

Time-based trends are also valuable for forecasting and staffing. Noticed a consistent slow period during a specific month year-over-year? Plan promotions like happy hours or specials to boost traffic, and adjust staffing levels to align with anticipated demand.

For multi-location operations, compare sales performance across locations to pinpoint what’s working and why. A high-performing menu item or successful marketing tactic at one location may provide valuable insights for improving outcomes at others.

What You Can Do Now

Pull detailed sales and menu profitability reports from your POS and restaurant management software, focusing on key periods like holidays, weekends, and seasonal trends.

Collaborate with your chefs, managers, service team leads, and bookkeeper(s) to review menu item performances, gain insights into customer feedback, and ensure accurate cost tracking.

Use this data to start planning menu changes, marketing campaigns, and staffing strategies for the new year.

Labor Report

What It Is

A labor report tracks payroll expenses, including wages, overtime, and benefits, as a percentage of revenue. It also provides insights into employee productivity and staffing needs.

Why It’s Important

Labor expenses are one of the largest costs for a restaurant, often accounting for around 30% of gross revenue. These expenses include wages, overtime pay, training, payroll taxes, and insurance.

Since labor costs are variable and can fluctuate based on factors like location, staff size, and operational efficiency, tracking labor cost percentages consistently throughout the year is essential.

A labor report provides valuable insights into payroll as a percentage of revenue, helps identify inefficiencies, and supports strategic staffing decisions to reduce unnecessary costs.

How to Turn Year-End Insights Into Action

How can the insights from your labor report shape decisions for the year ahead?

For example, a consistently high labor cost percentage of 44% over the past year could point to inefficiencies or overstaffing. To address this in the new year, consider adjusting staffing levels during slower periods or cross-training team members to handle multiple roles.

Were overtime costs frequently high for the back-of-house team? Hiring additional prep cooks or scheduling more strategically during peak times could help reduce those expenses. Experienced high sales volumes but low front-of-house staffing? Adding an extra server or hiring a barback can improve service efficiency and guest experience.

If training costs are notably high, evaluate staff turnover rates. This may indicate challenges with employee retention, onboarding processes, or the need to enhance incentives to keep your team engaged.

What You Can Do Now

Log in to your restaurant scheduling software and management platform to review labor records and costs from the past year, focusing on payroll, overtime, and scheduling patterns.

Meet with managers to gather feedback on staffing gaps, opportunities for improvement, and team morale.

Begin drafting staffing plans and labor budgets, and start preparing for anticipated peak times, holidays, and slower periods.

Inventory Report

What It Is

A restaurant inventory report tracks the flow of goods; the quantities and value of all items and ingredients on hand, including food, beverages, and supplies. This report monitors when deliveries arrive, items are sold, and shrinkage occurs through waste, theft, or spoilage over a set time period.

Why It’s Important

Effective inventory management is crucial for controlling costs and maintaining visibility over the flow of goods in your restaurant.

Accurate, up-to-date inventory records help identify overstocked items, wasted ingredients, usage patterns, and areas for potential cost savings. Without consistently tracking inventory, restaurants risk overspending on ingredients or running out of key items, impacting customer satisfaction and sales.

How to Turn Year-End Insights Into Action

If the inventory report shows a high spoilage percentage for certain produce, consider adjusting storage practices, refining preparation procedures, reevaluating portion sizes, or purchasing smaller quantities in the future.

Review which ingredients the kitchen used most frequently and how often they required reordering. For example, if lettuce usage peaks in the summer but drops in the fall, plan orders with seasonal demand in mind.

For high food costs, evaluate current vendor relationships, renegotiate contracts, or explore alternative suppliers to reduce expenses.

What You Can Do Now

Pull inventory reports from your restaurant management software for the past year. MarketMan provides restaurateurs with reports on inventory count value, waste, production events, transfers, ingredient price changes, and more. 

Review stock levels, waste occurrences, and any discrepancies that jump out at you. 

Meet with your kitchen staff to go over these discrepancies to discuss what went well and required improvements over the year – take note of any storage issues, prepping bottlenecks, or other inefficiencies.

Use this feedback to make adjustments for the year ahead whether that’s more regular inventory counts, training on portioning, or creating a digital cookbook.

Leave spreadsheets behind and take control with industry-leading cloud-based restaurant management software. With MarketMan, automate invoice processing, generate reports on menu profitability, COGS, and gross profits in seconds, and seamlessly integrate with your accounting software. Book a demo today and set your restaurant up for success in 2025.