In the Food and Beverage (F&B) department, expenses are divided into two main categories: Labor Costs and Related Expenses and Other Expenses. Below is a complete and detailed explanation of each category, with every line item accounted for, following the Uniform System of Accounts for the Lodging Industry (USALI).
1. Labor Costs and Related Expenses
Salaries and Wages
- Regular pay, overtime, and shift differentials
- Includes temporary employees processed through the payroll system
- Cross-department work is charged to the department where work is performed
- Titles should be aggregated when necessary for confidentiality
Service Charge Distribution
- Service charges paid to hotel employees through the payroll system
Contracted, Leased, and Outsourced Labor
- Costs of third-party contractors filling positions normally held by payroll employees
- Includes shared staffing supported by formal agreements
Bonuses and Incentives
- Contractual bonuses, discretionary bonuses, incentive pay, and performance rewards
Total Salaries, Wages, Service Charges, Contracted Labor, and Bonuses
Payroll-Related Expenses
- Payroll Taxes: Employer contributions to retirement, unemployment, disability, medical insurance, etc.
- Supplemental Pay: Personal days, vacation, sick pay, holiday pay, jury duty, relocation, paid time off, severance
- Employee Benefits: Health insurance, pension contributions, union dues/fees, employer-paid meals (Staff Dining allocation)
Total Payroll-Related Expenses
Total Labor Costs and Related Expenses Calculated by summing Total Salaries, Wages, Service Charges, Contracted Labor and Bonuses, and Total Payroll-Related Expenses.
2. Other Expenses
Banquet Expense
Items used in providing banquet services not matched to specific revenue accounts
China
Tableware purchases or rentals: plates, bowls, serving platters, etc.
Cleaning Supplies
Products for cleansing and disinfecting F&B areas (excludes dishwashing supplies)
Cluster Services
Allocations for shared services in limited geographic areas
Commissions
Agent fees for securing F&B business only
Complimentary Services and Gifts
Costs of promotional items, complimentary food and beverage (e.g., “Happy Hour”, VIP gifts)
Contract Services
External services such as kitchen cleaning, consulting, silent shopper services
Corporate Office Reimbursables
Corporate personnel expenses allocated to the property, including travel and amenities
Decorations
Decor items for events and holidays not charged to guests
Dishwashing Supplies
Cleaning agents specifically for washing china, glassware, flatware, utensils
Dues and Subscriptions
Memberships and publications for staff and department representation
Entertainment—In-House
Costs for guest entertainment (food, beverage, gratuities, service charges, taxes)
Equipment Rental
Rental of equipment for temporary use or replacement needs
Flatware
Costs of purchased or rented flatware, silverware, serving pieces
Glassware
Purchased or rented beverage containers (cups, glasses, etc.)
Ice
Ice used in food and beverage service, storage, preparation
Kitchen Fuel
Fuels like Sterno, propane, charcoal for food warming or specialized cooking
Kitchen Smallwares
Costs of pots, pans, and other small cooking equipment (excluding utensils)
Laundry and Dry Cleaning
Cleaning services for department linens and uniforms
Licenses and Permits
Legal operating licenses and required inspections
Linen
Table cloths, napkins, skirting, and accessories (purchased or rented)
Management Fees
Payments to third-party operators managing F&B venues
Menus and Beverage Lists
Design and printing of menus and beverage lists, including covers
Miscellaneous
Any expenses not categorized under other line items
Music and Entertainment
Costs for live or recorded entertainment, including royalty fees
Operating Supplies
General supplies not captured in other categories (e.g., office supplies)
Paper and Plastics
Disposable supplies: paper bags, napkins, plastic utensils, foil, wrap
Postage and Overnight Delivery Charges
Mail and delivery costs related to the department
Printing and Stationery
Printed forms and stationary for departmental use (menus are separate)
Reservations
Fees for third-party reservation systems, commissions, and communication costs
Royalty Fees
Branding fees for using a restaurant or beverage concept name
Training
Non-payroll training costs: materials, supplies, instructor fees
Travel—Meals and Entertainment
Reimbursed meal and entertainment costs for business travel
Travel—Other
Other travel costs: airfare, hotel, registration fees, etc.
Uniform Costs
Costs of purchasing or renting uniforms (repairs included)
Uniform Laundry
Costs of cleaning employee uniforms
Utensils
Kitchen tools: strainers, wine openers, cutting boards, etc.
Total Other Expenses Sum of all the line items under Other Expenses.
3. Total Expenses
Formula: Total Labor Costs and Related Expenses + Total Other Expenses
Percentage Calculation: Total Expenses / Total Food and Beverage Revenue
This total is reported in the Summary Operating Statement under Departmental Expenses—Food and Beverage.
4. Departmental Profit
Formula: Gross Profit – Total Expenses = Departmental Profit
Percentage Calculation: Departmental Profit / Total Food and Beverage Revenue
By accounting for every detail, this fully detailed structure ensures transparency and accuracy in managing Food and Beverage departmental expenses, supporting better decision-making and profitability tracking.
