8 Ways to Anticipate and Reduce Restaurant Expenses

Balancing your books is a tricky part of running a restaurant, especially if you’re not used to dealing with finances. But making sure that your expenses don’t exceed your income isn’t something you can afford to overlook. Cost cutting helps restaurant owners to reduce unnecessary expenses in order to increase profitability.

How do you plan for expenses? Are there ways you can cut restaurant waste to save money? What are the best systems to help you track your money?

At SumUp, we aim to help small businesses and restaurants take control of their money. With that in mind, we’ve put together our top tips to anticipate and reduce your expenses, helping you maintain great service without breaking the bank.

1. Plan your expenses 

Your restaurant expenses can be split into two categories: fixed costs and variable costs.

A fixed cost is one that’s going to stay the same every time you pay it. These are the easiest expenses to predict. 

For example, the following are usually all fixed costs:

• Rent payments

• Insurance

• Employee wages

A variable cost is an expense you’ll pay regularly but that’ll change each time. 

For your restaurant, that’ll include costs like: 

• Food

• Other production supplies

• Delivery fees

Calculating your monthly restaurant expenses is the first step to cost cutting and taking control of your money. 

You can make finance tracking easier by using our free business account, which works alongside our card readers and Point of Sale (POS) for hassle-free money management. Schedule regular payments, track your restaurant’s variable costs and keep real-time tabs on your finances with phone notifications. 

As a finance management tool, you’ll be instantly cutting down on your expenses, too. Pair with our top tips and you’ll be well-equipped to track and ensure that you’re cost cutting in the areas where your business allows. 

2. Save on energy costs 

Optimising the energy bills of your restaurant is a must if you’re looking to cut down on your spending. 

Small businesses tend to see a large proportion of their total budget going towards energy costs, with the Office of National Statistics putting it at over 20% of total spending.

Here are some tips to help your restaurant save on energy bills:

• Use a smart meter to monitor restaurant energy use, track higher-consuming appliances and receive accurate bills.

• Switch to energy-efficient devices.

• Make it company policy to turn off appliances when not in use.

• Clean your restaurant appliances regularly to improve efficiency (e.g. fridge and freezer filters).

• Opt for insulated appliances in your restaurant.

• Cover pots when cooking to conserve heat.

Avoid sticking with the same energy supplier year after year, either. Instead, shop around when your contract is coming to an end and be open to switching if you receive a cheaper quote. 

3. Optimise your inventory

Inventory management is a key step towards cost cutting for restaurants. Focusing on this part of your business will help you anticipate and reduce your restaurant expenses. 

By effectively monitoring your inventory you can be sure you’re ordering the right supplies every time, preventing over-ordering and waste in your kitchen. 

Tracking your stock enables supply-and-demand ordering, too, giving you a better idea of the must-have items for your restaurant. 

To help simplify your everyday tasks in your restaurant, SumUp POS helps to streamline your operation and provide useful insights into inventory management.  

A dedicated POS system will provide digital records of all your orders and auto-generated reports. You’ll have a clear insight into your restaurant stock. 

Our POS system also comes with a Solo card reader, connecting your contactless card payments to your tracking system for total budget control.

4. Reduce waste and use food wisely

Waste in a restaurant is a huge financial drain and an opportunity for cost cutting. From ordering to using your food, every step should work to cut down on how much ends up in the bin. 

Just as when your finances aren’t working for you we would recommend an audit, the same applies to food waste. 

Track all waste pre-consumer and post-consumer to gauge where you need a change. You might find out that a certain product is consistently thrown out due to over-ordering, for example.

Analyse restaurant footfall, too. This will give you a more precise picture of how much food you need to prepare on any given day.

5. Create collective habits 

Involve your entire restaurant team in money-saving initiatives. 

Collective habits, from switching off appliances to using older ingredients first, should be part of every employee’s training. 

Add signage around your kitchen as a reminder, too, and encourage everybody to play their part.

6. Choose a multi-functional system

Multi-functional systems reduce restaurant costs in a variety of ways. One of the biggest benefits? You only need one system. 

Cut out the expensive network of hardware and software in favour of one, easy-to-use device. Reduce staff training, cut down on costly errors and optimise your service,

Your restaurant needs a multi-functional system that:

• Manages tables and optimises your floor plan

• Takes and tracks reservations

• Tracks inventory

• Allows waiters to communicate with the kitchen

• Allows easy editing of the restaurant menu alongside inventory changes

SumUp POS Pro includes all of these capabilities alongside helpful tax compliance features and income and expense reports. Choose features and add-ons that are going to be beneficial to your restaurant, too, and only pay for what you need. 

7. Optimise the time you spend on each function 

Another benefit of multi-functional systems is that they make everyday tasks swift and simple. There’s no fussing about with sheets of paper or back-and-forth between the restaurant and the kitchen.

Orders are taken, inventory is tracked and payments are accepted with the quick click of a button. 

Real-time reports and restaurant-wide communication make it easier to only order what you need and track your expenses to the minute. 

8. Reduce your restaurant’s banking costs

Banking is a crucial aspect of restaurant expense management but it can cost you a lot if you’re not careful. Rather than add to your outgoings, work to reduce banking expenses with clever solutions.

It’s smart to compare the business banking fees of different UK banks. Be aware of hidden charges, too, such as fees when you surpass a certain number of transactions. 

When considering different banking options, we recommend finding out about:

• Minimum balance fees

• Overdraft charges

• Cash withdrawal charges

• Account maintenance fees

• Inactivity charges

• Multiple user costs