Vast CFO

Six months into 2026. If you haven't pulled apart your P&L yet, here's what I look at first when I sit down with a hospitality operator mid-year.

Prime cost as a % of sales. If COGS plus labor is north of 65%, something is off. The two need to be looked at together because operators trade them off all the time without seeing it.

Food cost variance month over month. Not the absolute number, the variance. A food cost that holds steady at 30% is fine. A food cost that runs 28%, 32%, 29%, 33% is telling you something is broken in inventory or ordering.

Labor % at peak vs. off-peak. Most operators look at the monthly total and miss that the peak shifts are profitable and the slow ones are bleeding. Break it apart by daypart at least once a quarter.

Comps as a % of gross sales, by category. We covered this earlier in May. If it's blind, fix it before summer hits.

Cash on hand vs. monthly fixed cost. Especially before summer hiring. The number to know is how many months of fixed cost you can cover if revenue dropped 30%. For most independents, that number is uncomfortable.

The first half of the year tells you what to do for the second half. The numbers are already there. The question is whether you're going to read them before July.

Most restaurant operators sign their first lease without reading it carefully. They sign their second one and start paying attention.

Lease accounting changes when you go from one location to two. Here's what shifts.

First, the obvious: your rent expense doubles, but your overhead doesn't. Some functions consolidate (accounting, marketing, ownership salary) and some don't (managers, FOH/BOH leadership). Knowing the split before you sign the second lease is the difference between accretive growth and dilution.

Second, the lease itself: ASC 842 requires most operating leases to show on the balance sheet now. If you ignored this for one location, fine. With two, your bank starts caring. Your debt-to-equity ratio looks different to a lender when leases are on the books.

Third, CAM charges. Common Area Maintenance reconciliations are where landlords find money. Multi-location operators usually have CAM charges across multiple landlords with different reconciliation cycles. If you don't track them by location, by year, against the original estimates, you'll overpay.

Fourth, sales-tied rent clauses. Most second-location leases include a clause that triggers extra rent above a sales threshold. If you negotiate the threshold based on your first location's volume, you'll regret it. The second location should justify itself on a different curve.

Lease accounting at one location is a bookkeeping question. At two, it's a strategic one.

Full breakdown on the blog: https://www.vastcfo.com/lease-accounting-basics-for-restaurants/

Restaurant payroll is the number one thing your bookkeeper is probably doing wrong.

Not because they're bad. Because restaurant payroll is genuinely different and most generalist bookkeepers don't know it.

What I find when I clean up restaurant payroll books:

Tip reporting buried in gross wages instead of separated out. This makes labor % look correct on paper and wrong in reality, and it kills the F**A tip credit on the way through.

Tipped vs. non-tipped employees coded the same. So the labor reports lump dishwashers with servers and you can't see your true FOH vs. BOH spread.

Overtime calculated on base wage only when it should include the regular rate of pay. If a server makes $5/hour plus tips and works 50 hours, the OT calculation isn't on $5. The DOL has been aggressive on this for the last four years.

Tip pooling reported wrong, especially in states with mandatory pool rules.

Health insurance and retirement deductions hitting the wrong account so the P&L misclassifies benefits as wages.

When this is cleaned up, two things happen. Labor % stops jumping around month to month. And you can finally answer the question every operator should be able to answer: what is my real cost per cover for FOH vs. BOH.

If your bookkeeper has been doing your books for years and you've never had this conversation, it's worth having.

Full breakdown on the blog: https://www.vastcfo.com/restaurant-payroll-cleanup/

The F**A tip credit is one of the most under-used tax credits in restaurants.

If your servers report tips and you pay employer F**A on those tips (which you do, automatically), you can claim a credit on most of it. The credit is roughly equal to 7.65% of reported tip income above the federal minimum wage threshold.

For a restaurant with $400K in reported tips, that's around $30K in tax credit. Not deduction. Credit. Dollar for dollar against tax liability.

Three things we see operators miss:

1. They claim the credit one year and forget the next. The credit is annual; it doesn't carry. If your CPA didn't claim it on your last return, you may be able to amend.

2. They don't have clean tip reporting. The credit is only as good as the documentation. If servers under-report tips because the tracking is sloppy, you lose credit on every dollar that didn't show up on the W-2.

3. They assume their accountant is doing it. We've audited firms where the credit was missed for three years running. Accountants who don't specialize in restaurants miss this regularly.

This isn't a deduction strategy or a guarantee of savings. It's a credit that's been sitting in the tax code for decades and is specifically designed for tipped-employee businesses. Restaurants that report tips correctly should be claiming it.

If you've never asked your CPA whether you're claiming the F**A tip credit, that's the question for this week.

Full breakdown on the blog: https://www.vastcfo.com/fica-tip-credit-for-restaurants/

Most operators have no idea what their comps actually cost them.

I see comp ratios as high as 8% with no tracking. Voids running blind. Promo discounts coded the same as service comps. Manager comps coded the same as quality comps. Nothing tied to a reason.

Here's why it matters.

A 5% comp rate on $2M revenue is $100K. If your gross margin is 65%, that's $65K of profit walking out the kitchen door. Every year. With no record of why.

The fix isn't to ban comps. The fix is to make every comp tell you something:

- Quality comp: the kitchen made an error. Track who and which station.
- Service comp: the FOH dropped the ball. Track section and shift.
- Promo comp: a marketing decision. Track which promo, which guest segment.
- Manager comp: a relationship investment. Track frequency per manager.

When comps have categories and counts, patterns appear in 30 days. The same dishes get sent back. The same shift takes the most service comps. The same manager comps the same regulars three times a week.

You don't need expensive software for this. Most POS systems can handle it. You need someone to set up the categories and read the report monthly.

Most operators stop reading the comp report because it's a blob. Make it useful and it becomes the most actionable line in the P&L.

Full breakdown on the blog: https://www.vastcfo.com/restaurant-comps-voids-discounts-promotions/

Most operators don't realize their merchant processor is quietly taking 3.5% off the top of every transaction.

Some are paying closer to 4.

For a restaurant doing $2M in revenue, that's $70K to $80K a year going to the processor. More than most owners pay themselves.

Here's what I see when I do a fee audit:

Interchange-plus pricing dressed up as "tiered" or "qualified/non-qualified." If you can't get a flat-rate breakdown, you're being hidden from.

Monthly statement fees, PCI compliance fees, batch fees, gateway fees, and "regulatory" fees that aren't regulatory at all. They stack.

Card-not-present surcharges on online orders that the operator never agreed to.

A processor charging 3.8% effective rate isn't unusual. A processor charging 2.4% isn't, either. The difference is a part-time line cook for a year.

You don't need to switch processors blind. Pull your last three statements and run them through a real audit. The number of restaurants that find $20K to $50K a year in unnecessary fees on the first look is, in my experience, most of them.

Full breakdown on the blog: https://www.vastcfo.com/merchant-processing-fees-for-restaurants/

Comps. Voids. Discounts.

Three different things, three different stories your P&L should be telling you.

A void means the order never happened. A comp means the food was made and given away (so your inventory and labor still took the hit).

A discount means the sale happened, the guest just paid less.

When these get lumped together on your P&L, you lose the ability to spot what's actually moving your margins.

Is it a service issue? A promo working too hard? Staff being overly generous? You can't tell.

We broke down how to record each one properly (and why voids probably shouldn't even live on your P&L) in the latest blog: https://www.vastcfo.com/restaurant-comps-voids-discounts-promotions/

Quick test 👇

Can you afford a General Manager?

Most restaurant owners answer this based on gut.

“If we’re busy enough… probably.”
“If revenue keeps growing… maybe.”

But here’s the reality:

A restaurant manager isn’t just a $55K–$70K salary.

It’s:
✔️ Payroll taxes
✔️ Benefits
✔️ Bonuses
And the ripple effect on your margins

We’ve seen restaurants hire too early…
and suddenly profit disappears.

And we’ve seen others wait too long…
and stay stuck in the day-to-day.

The right answer isn’t “yes” or “no.”

It’s whether your numbers actually support it.

If you’re thinking about making this hire, run this first:
https://www.vastcfo.com/can-you-afford-a-restaurant-manager/

Free On-Demand Webinar 👇

Understand your P&L in 15 minutes.

Most restaurant owners look at their numbers…

And still don’t know what’s actually going on.

What’s working
What’s not
What needs fixing

It’s all in there.

But if your P&L isn’t structured properly, it’s almost impossible to read.

We’ve seen owners run profitable restaurants…

And still feel confused every time they look at their numbers.

This webinar breaks it down simply so you can actually use your P&L to make decisions.

Watch it anytime here:
https://www.vastcfo.com/webinars/

If your occupancy cost feels off… it probably is.

But not for the reason you think.

We’ve seen restaurant owners assume:
“Rent is just high.”

Then we look at the lease…

And find costs they didn’t even realize were there.

❌ CAM charges increasing
❌ Unexpected adjustments
❌ Costs being categorized incorrectly

Same space. Same lease.
Very different financial picture.

Most of the time, it’s not just about cost.

It’s about clarity.