CoGS vs Direct Operating Expenses

Restaurant Owners...If you’re confused about the difference between cost of goods sold and direct operating expenses, I have a super simple breakdown (plus a must-have tool) if you want to track those expenses the right way.
To learn more please either watch the video above or click the link below to read the transcript or listen to the podcast on my website.
Also, please leave your questions or comments I will answer them all.
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Ryan Gromfin
The Restaurant Boss
TheRestaurantBoss.com

[@jessl4570]

I've been having trouble understanding this for the longest time. Thank you for explaining it in a way that I can understand!

[@eggbaby6195]

Many thanks. Great work.

[@prosperthedubaiexplorer8980]

easy and simple explanation,Awesome material sir

[@kmxhlivn]

Awesome! Definitely want to get Click Bacon! Thank you so much. Feel so much more less in the dark about running a restaurant. Love your videos.

[@Therestaurantboss]

So glad they are helping you! clickBACON will be a lifesaver and I promise you will see results!

[@gabyperez1762]

Very interesting. Thank you!!

[@accountingdept304]

THANK YOU! This is exactly what I needed to sort out COGS and Direct Operating Expenses.

[@Therestaurantboss]

You are very welcome.

[@sergeikhan2268]

could you talk about whats the latest camera s and POS systems, security system, etc great video by the way .

[@shiru546]

Very informative for someone new to accounting

[@jenninemorel7693]

Operating Expenses = "Fixed Expenses" Cost of Goods Sold = "Varible Expenses" Variable expenses are the direct expenses, increase/decrease; directly related with volume of sales of product.

[@lovelyjoyagudera5468]

Thank you Sir. Explained well. 👍

[@Therestaurantboss]

You are welcome.

[@vukanie1]

This is helpful "Thank you Sir"

[@Therestaurantboss]

You're very welcome!

[@eslamkamaleslam5211]

Hello sir so how to track direct operation expenses and should it including in menu cost and where we put direct operation cost in p&l? Thank you

[@UNIQUEINDIANofficial]

Sir COGS include packing materials purchased? Like cake box

[@ItalianStallion1415]

I am NOT a CPA or good at accounting; but, I will give this a shot. Anything you put together to make and deliver the burger that a customer gets a receipt for, in my opinion, is CoGS. This includes the napkins, and extra ketchup packets the customer has paid for the privilege to take. The cost of cleaning and buying serving trays you serve the food on could be Direct Operating Expenses. The customer did not buy the tray. They give it back. So when you bought trays to serve food its cost could be considered an asset or expense. Cleaning supplies are pretty black and white. The customer is not buying cleaning services, they are buying food.

[@Therestaurantboss]

Restaurant financials are hard until they aren't. LOL! Just takes some studying and a lot of practice. This is why I created clickBACON (clickBACON.com) to help restaurant owners get control of their food, labor and beverage costs.

[@sonjamoses6927]

Thank you for the info. So in renovations a bathroom, COGS would be toilets, flooring, paint, drywall, etc? DOEs would be tools and safety ?

[@Therestaurantboss]

I am sorry, I don't follow at all?

[@fAiZrAzAli]

hi bro, im doing online business and retail business can you help me for below situations: 1- fuel that i used to deliver order to customers...is it C.O.G (freight cost) or expenses? 2- im using GDEX service to courier order to customers....is it C.O.G (freight cost) or expenses? btw im zero knowledge about accounting....but willing to learn...hope you can teach me

[@stamatisbournias9473]

hey boss. great video! have you ever done any videos, on kids menu. and the importance of having them,

[@NassahTheOne]

Thank you Rayan for your valuable illustration of what is a Direct Operating Expenses. However your stating that a CoGS formula should be "sales price/purchase price", shouldn't it be opposite ? Thanks for confirming & looking forward for your upcoming videos 🙏🏼

[@Therestaurantboss]

Yes, it should be Purchases / Sales (x100 to get the percentage).

[@benrabahmohamed9657]

Awesome video good stuff, thanks How much does cost this software?

[@Therestaurantboss]

Hi! You can learn more at www.clickbacon.com!

[@ienjoyxmas]

Will there be a free trial period for "Bacon"? I'm not a restaurant owner but as an accounting student I'm very interested in seeing how the algorithm works for inventory.

[@Therestaurantboss]

Currently there is not a free trial offer but there is a 60 day satisfaction guarantee.

[@beckyvagle2546]

do you have any video's that how how you can figure out how much you should charge for each menu item? I have heard that you figure out how many burgers are in a box, take that number and then times it by 3... and then go from there. If that makes sense..........

[@Therestaurantboss]

That kind of makes sense, but not really. Basically, cost your dish out with everything, then you can multiple by cost by 3 or 4 (that is how you get a 25% to 33% food cost. However, I do the opposite. You know what your customer will pay for an item, so go the other way. Determine where you want to be on cost, then find the portion and quality that is the BEST for what you can charge.

[@chabarf]

Hi! thanks a lot for your great vids!!!, I have a question, where do I put things like gas, or rent? are they considered as vendors?

[@Therestaurantboss]

They are vendors but they are not Cost of Goods Sold. They are just expenses.

[@Therestaurantboss]

They are vendors, but they are NOT part of CoGS or DOE, they are just expenses.

[@Foxpawz_737]

You mentioned direct operating costs should be 4-8%. (4-8% of what please? Of total gross sales?) Thanks so much..

[@Therestaurantboss]

Yep, total sales but not gross, next sales without sales tax.

[@petraangeles353]

Is city permit for a customer in constraction company COGS or billable expense?

[@Therestaurantboss]

It's a direct operating expense.

[@user-bb5sy2ft5z]

THINGS LIKE THAT

[@niteshkumar-qq2eu]

How to control direct food cost without compromising the quality ?,,,thanks

[@Therestaurantboss]

It's all about negotiating the best prices with your vendors and choosing where you can compromise a little over areas that you cannot.

[@joven5363]

what about the cooks salary?

[@Therestaurantboss]

What about them? What is your question?

[@md.mohiuddinkhan6721]

i want to get your 90plan, tkanks

[@Therestaurantboss]

You can request the download here: therestaurantboss.com/boost-your-restaurant-in-90-days/

[@lucysverre3418]

This is a random video

[@lucysverre3418]

WHAT IS THIS????!!!!!!

[@Don-qb1vi]

guy always says he'll respond in the videos and never does. Also doesn't answer on Facebook, even if you have cash in hand.