5.7. Prime Cost Tool

A restaurant's two largest costs are usually ingredients and staff. Prime cost tracks the two together. The Prime cost analizi (prime cost analysis) tool in Ritapos shows your food and staff costs against revenue and compares them with your target. In this lesson you will learn to use the tool and prepare your data correctly.

What prime cost is

Dopson and Hayes write: "Prime cost is defined as an operation's total cost of sales added to its total labor cost." (Dopson and Hayes, 2015)

• Prime cost = Food cost + Staff cost
• Prime cost % = Prime cost / Revenue x 100

The same source notes that "prime costs in the range of 60 to 70 percent are common for full-service operations, while prime costs below 60 percent are most common in limited or quick service operations".

To track staff cost on its own, use the labor cost percentage: Labor cost / Sales x 100 (Dopson and Hayes, 2015; BC Cook Articulation Committee, 2015). To work out your staff cost, use the staff cost calculator.

Opening prime cost analysis

Open Araçlar > Prime cost analizi (tools, prime cost analysis). The tool is part of the premium package. The user's role needs the Raporlar: Detaylı (reports: detailed) permission.

Choose a date range and your target, then click Rapor oluştur (create report). The start time in the date picker defaults to 04:00. To include the whole day, set the start time to 00:00.

Target prime cost

Hedef prime cost (target prime cost) defaults to 60%. You can choose a target between 20% and 80%. The level buttons above the slider have the same names as in the food cost tool. At the default 60%, Orta is highlighted. The slider itself shows no scale numbers:

• Çok düşük (very low): 50%
• Düşük (low): 55%
• Orta (medium): 60%
• Yüksek (high): 65%
• Çok yüksek (very high): 70%

As the screen notes, many businesses aim for a prime cost band of 55 to 65 percent. Set your own target based on your service type and past data.

Indicators

The report has three input fields. When you click Rapor oluştur, they fill in automatically with data for the chosen period. The source of each value is shown under the field. You can change the values:

• Vergili net ciro (net revenue including tax, from sales)
• Personel giderleri (staff expenses, from expenses)
• Diğer işletme giderleri (other operating expenses, from expenses)

The results appear on cards: Vergili net ciro (net revenue including tax), Gerçek prime cost (actual prime cost), Diğer işletme giderleri (other operating expenses) and Kalan (remaining). Under net revenue you see Hedefe göre önerilen ciro (suggested revenue for the target). The area below the cards shows the Hedef prime cost (target prime cost) percentage and amount. You can scroll this area with the arrows on its sides. The actual prime cost card shows a status label next to the percentage. If the percentage is above target, a red Hedefin üstünde (above target) label appears.

How revenue is calculated

Net revenue including tax comes from your sales:

Net revenue = Gross revenue - Without payment + Debt collections

Orders closed as "Without payment" are taken out of revenue. This way of closing is covered in 6.9. Closing an Order Without Payment. If needed, you can correct the revenue value on screen.

Food cost comes from the same source as the food cost tool: the product cost copied to the order line at the time of sale. See 5.6. Food Cost Tool.

Where staff expenses come from

Staff expenses are calculated from your İşletme giderleri (business expenses) records in the chosen period, based on the expense group name and the expense title. A record counts as a staff expense if its group name or title contains one of these words: personel, çalışan, maaş, ücret, SGK, bordro, prim, bonus, salary, employee, labor, wage or payroll. Case and Turkish characters do not matter, and a word can carry a suffix. SGK and labor must appear as a whole word. Records without these words go into Diğer işletme giderleri. The full rule is in 12.2. Business Expenses.

You can also change the values in the staff and other expense fields by hand on screen.

Incoming invoices entered as paid are recorded automatically in the expense group reserved for invoices. This group does not count as staff, so it appears under other operating expenses. This group is named Invoice. Invoice entry is covered in 5.1.3. Entering Inventory from an Invoice.

Naming expense groups correctly

Whether the tool finds your staff expenses depends on your expense group names. We suggest an expense group called Personel for salaries, social security and bonuses. If you give the group another name, check the Type column on the Prime cost analysis report to see which type its expenses count as.

The expense group form has only a required name field. There is no type to choose; the type comes from the group name.

The expense form has these fields: İşletme gider grubu * (business expense group), İsim * (name), Açıklama (description), Tutar * (amount), Ödeme yöntemi (payment method), Ödeme kaynağı (payment source), Tekrarlayan mı? (recurring?) and Tarih * (date). When you record staff expenses, choose the Personel group in İşletme gider grubu.

The payment method can be Nakit (cash), Kredi kartı (credit card) or Diğer (other). The payment source options depend on the method:

• Nakit: Para çekmecesi (cash drawer), Kasa (till), Banka hesabı (bank account), Diğer
• Kredi kartı: Kredi kartı, Diğer
• Diğer: Diğer

Expense groups are covered in 12.1. Expense Categories and expense records in 12.2. Business Expenses.

You manage expense groups on Expenses > Expense categories. That list has only the Name and Actions columns; there is no Type column on that page. Each row has + Yeni işletme gideri (new business expense), Düzenle (edit) and Sil (delete) buttons. To add a group, use the green + button next to the title.

Calculations and an example

• Actual prime cost % = (Food cost + Staff expenses) / Net revenue x 100
• Target prime cost = Revenue x Target %
• Suggested revenue for the target = Prime cost / (Target % / 100)
• Remaining = Revenue - Food cost - Staff expenses - Other operating expenses

Example (sample data):

• Gross revenue 1,050,000.00₺, no payment 60,000.00₺, debt collections 10,000.00₺
• Net revenue: 1,050,000 - 60,000 + 10,000 = 1,000,000.00₺
• Food cost 300,000.00₺, staff expenses 280,000.00₺, other operating expenses 250,000.00₺
• Prime cost: 300,000 + 280,000 = 580,000.00₺. Percentage: 580,000 / 1,000,000 x 100 = 58%
• With a 60% target, target prime cost: 1,000,000 x 0.60 = 600,000.00₺
• Suggested revenue for the target: 580,000 / 0.60 = 966,666.67₺
• Remaining: 1,000,000 - 300,000 - 280,000 - 250,000 = 170,000.00₺

In the example, the percentage is 2 points below target. The status is judged with a 1-point tolerance: within 1 point of the target counts as on target.

The example in the images (Akademi demo data): date range 01.10.2026 00:00 to 09.10.2026 04:00, a 60% target. The input fields fill in with 20100, 5628 and 5025. The actual prime cost card shows 62%, a red Hedefin üstünde label and 12,532.00. Kalan is 2,543.00, Hedef prime cost is 12,060.00 and Hedefe göre önerilen ciro is 20,886.67. The screen rounds the percentage to a whole number. Calculated, the percentage is (6,904 + 5,628) / 20,100 x 100 = 62.35, which is more than 1 point above target.

Remaining is what is left of revenue after food, staff and other expenses. To look more closely at revenue, cost and profit, use the profit margin calculator.

The cost stack and expense groups table

The Maliyet yığını (cost stack) chart shows food, staff and other expenses together against revenue. The chart has Food cost, Personel giderleri, Diğer işletme giderleri and Kalan bars. The Kalan bar is green. The legend has Tutar (amount) and Önceki ay (previous month).

On the Prime cost analysis screen, the Gider grupları breakdown table has the Grup (group), Tür (type), Tutar (amount), Sayı (count), Gider payı (share of expenses) and Ciro payı (share of revenue) columns. The Tür column is plain text based on the group name: it reads Personel giderleri (staff expenses) for the Personel group and Diğer işletme giderleri (other operating expenses) for other groups.

The first time you use the prime cost report, check the Type column on that screen. If a group that should be staff shows as Diğer işletme giderleri, rename the group or correct staff expenses by hand on screen.

Reading the results correctly

• Enter all expenses within the period. Missing expenses make prime cost look lower than it is.
• Food cost comes from the cost you decided on in the recipe and applied to the product. When you decide on a new cost, move it to the product. See 5.3. Cost Calculation.
• Read the report by month for monthly costs such as salaries. Over a short period, one monthly salary payment can make the percentage look higher than it is.

Sources

• Dopson, L. R. and Hayes, D. K. (2015). Food and Beverage Cost Control. 6th edition. Wiley. Chapters 7 and 9.
• The BC Cook Articulation Committee (2015). Basic Kitchen and Food Service Management. BCcampus. Chapter: The Basic Calculation of Operating Costs. opentextbc.ca