Cash-flow basics for restaurants: know what can be paid and when
A practical restaurant cash-flow guide covering daily cash control, a 13-week forecast, supplier timing, payroll, tax reserves, and warning signs.
Restaurants receive money every day, which can create a false sense of liquidity. A Friday may bring €6,000 in sales, but card money settles Monday, payroll leaves Tuesday, a €9,000 supplier batch is due Wednesday, and €4,500 VAT is due the following week. The bank balance looks healthy until every commitment lands. A forecast makes timing visible. It does not require perfect prediction: a conservative sales line, known fixed costs, and a named response to a shortfall are enough to prevent avoidable surprises.
Map the restaurant cash cycle
- Daily inflows: cash, card settlement dates, delivery-platform payouts, deposits, events, and refunds. Record gross sales separately from net cash after commissions and settlement delays.
- Weekly outflows: produce, beverages, cleaning, casual wages, transport, and small repairs. Group supplier invoices by due date and negotiate a reliable 7–30 day rhythm rather than paying randomly.
- Monthly outflows: payroll, employer costs, rent, utilities, insurance, software, debt, and subscriptions. Add VAT, payroll tax, corporation tax, and annual licences in the week they leave the bank.
- Reserves and decisions: maintain tax and emergency pots, forecast seasonal dips, and decide whether to defer a non-critical purchase, reduce a menu, add a sales event, or request terms before cash is tight.
A forecast turns anxiety into choices
A restaurant opens the week with €28,000 in the bank. Forecast sales are €42,000, but card settlements arrive 2 days later. The month includes €13,500 payroll, €10,200 suppliers, €8,000 rent and fixed costs, and €4,500 VAT.
| Opening cash | €28,000 | Minimum reserve target is €24,000, equal to about 4 weeks of fixed operating cost. |
|---|---|---|
| Expected cash in | €39,480 net settlements | €42,000 sales less 6% delivery and card timing assumptions; exclude €2,520 until settlement week. |
| Committed cash out | €36,200 | Payroll €13,500 + suppliers €10,200 + rent/fixed €8,000 + VAT €4,500. |
| Decision | €31,280 closing cash in base case | The -15% sales case leaves about €25,000; defer a €2,000 fit-out purchase and confirm supplier terms before the VAT week. |
The base case is safe, but the weak-sales case nearly touches the reserve. The right action is taken before the bank balance becomes a crisis.
Run the weekly cash rhythm
- 1Reconcile the opening balance. Every Monday, match the bank balance to POS settlements, cash counted, card batches, refunds, and outstanding transfers. Start the forecast with the real cleared balance, not yesterday's POS sales.
- 2Load committed payments. Enter each payment by the bank date: payroll, supplier invoices, rent, utilities, tax, debt, and known repairs. Mark discretionary purchases separately so they can be delayed without hiding a liability.
- 3Forecast three scenarios. Use base sales, weak sales at -15%, and a shock such as €5,000 equipment repair or a 7-day settlement delay. Calculate the lowest balance and reserve runway in each case.
- 4Choose and communicate actions. If runway falls below 4 weeks, stop non-essential buying, call suppliers before the due date, protect payroll and tax, and tell the owner the exact gap and date. Review the next 13 weeks again next Monday.
FAQ
- How is cash flow different from profit?
- Profit measures revenue minus costs when accounting rules recognise them; cash flow measures money actually entering and leaving the bank. A €10,000 invoice can increase profit today while adding zero cash until a customer pays 30 days later.
- How much cash should a restaurant keep?
- Start with 4–6 weeks of fixed operating costs, then add seasonal and tax exposure. If fixed costs are €35,000 per month, a €32,300–€48,500 reserve is a useful starting range; your accountant should validate VAT and payroll timing.
- Should I pay suppliers early to get a discount?
- Only when the discount beats the value of keeping cash and does not endanger payroll, tax, or reserve. A 2% discount on a €5,000 invoice saves €100; losing a €24,000 minimum reserve is far more expensive.
- What is the first warning sign of a cash problem?
- Late visibility: using the bank balance without a forward list of payroll, tax, rent, and supplier dates. Other signs are rolling one invoice into the next month, using a card to pay food bills, or falling below 4 weeks of runway.
Keep reading
- Operations checklist for restaurants: the daily, weekly, and monthly rhythm
The complete operations checklist for a restaurant: what to check daily, what to review weekly, and what to audit monthly.
- Labor cost management: the percentage that decides whether your kitchen pays for itself
What labor cost percentage actually measures, target ranges by concept, and how to control it without bleeding service quality.
- The monthly supplier spend review that actually changes decisions
A one-hour routine: reconcile, rank, compare, and decide — turning supplier invoices into next month's purchasing moves.
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