Running a restaurant in the UK is no easy task—and in today’s uncertain economy, managing cash flow has become more difficult than ever. With rising ingredient costs, unpredictable energy bills, staffing issues, and fluctuating customer numbers, many hospitality businesses are finding it tough to maintain healthy cash flow. In this blog, we’ll explore the common cash flow challenges restaurant owners face and how working with the right accountant can help you not just survive, but thrive.
Why is cash flow critical in hospitality?
Cash flow keeps your restaurant running. It determines whether you can pay your suppliers on time, meet your payroll obligations, cover your rent, and invest in the growth of your business. Even if your restaurant is profitable overall, poor cash flow can lead to bounced payments, missed opportunities, or worse—closure.
Restaurants often face unpredictable trading conditions and tight margins. The most common factors contributing to cash flow stress include:
- Seasonal swings in footfall and revenue
- Daily cost variability (especially for ingredients and utilities)
- High fixed costs such as rent, licensing, and wages
- Small profit margins on menu items
- Last-minute or inconsistent customer behavior
Without a clear cash flow plan, it’s easy to run into trouble, especially when unexpected costs or delays arise.
What are the common cash flow challenges restaurants face?
1. Rising food and supplier costs
Brexit-related import changes, inflation, and global supply chain disruptions have driven up the price of key ingredients. Weekly or even daily changes in supplier rates make it hard to price menus consistently, leading to shrinking margins and unpredictable profit.
2. Energy bill spikes
Restaurants operate for long hours and rely on energy-intensive equipment. Sudden increases in gas and electricity prices have caught many businesses off guard. If you’re not actively monitoring and forecasting utility costs, these spikes can significantly impact your cash reserves.
3. High staffing costs and labour shortages
Staffing is a significant fixed cost in the hospitality industry. With rising minimum wages, national insurance, and a shortage of skilled hospitality staff, many restaurants are paying more to recruit and retain workers. Irregular shifts and overtime can further strain your cash position.
4. Late payments and delayed revenue
Many restaurants rely on corporate bookings or event catering, which may operate on delayed payment terms. Even delivery platforms may hold onto payments for several days or weeks. This mismatch between outgoing payments and incoming cash often puts a squeeze on working capital.
5. Delivery platform dependency
Delivery-first restaurants and cloud kitchens face additional financial pressure due to steep platform commissions (often up to 30%). Even if you’re busy with orders, these fees can eat into your margins unless you monitor and adjust accordingly.
6. Lack of cash flow forecasting
6. Lack of cash flow forecasting
How 3E’S helps restaurants manage cash flow effectively?
As hospitality accountants, we don’t just crunch numbers—we provide clarity, strategy, and control. Here’s how our services can support your restaurant’s financial health and boost your confidence in decision-making:
1. Real-time bookkeeping and expense tracking
We use cloud accounting software to keep your finances up to date. You’ll always know what’s coming in and going out—day by day. This helps you spot overspending, manage supplier payments, and stay on top of your day-to-day costs.
2. Tailored cash flow forecasting
We don’t offer generic forecasts. We factor in your business’s seasonal patterns, trading hours, supplier cycles, and staffing trends to create reliable, actionable forecasts. You’ll always know how much cash you’ll need for upcoming weeks or months—and can plan accordingly.
3. Menu costing and profitability analysis
Not sure if you’re pricing your menu correctly? We’ll help you break down the true cost of each dish—including ingredient cost, staff time, utilities, and overheads—so you can set prices that ensure a healthy margin and drop those dishes that are losing you money.
4. Payroll management and workforce planning
We handle your payroll, ensuring compliance with HMRC, pensions, PAYE, and auto-enrolment. More importantly, we help you forecast staff costs and plan rotas efficiently—so you avoid overstaffing during quiet times and understaffing during peak hours.
5. VAT and tax planning
VAT can get complicated in hospitality—especially when dealing with multiple rates for food, alcohol, eat-in, and takeaway. We manage your VAT returns, prepare for liabilities in advance, and ensure you never miss a payment deadline or claim.
6. Supplier payment scheduling
We help you organise payments to suppliers in line with your income. Through budgeting and calendar planning, we ensure you’re not paying large bills when your cash balance is low—keeping your operations smooth and relationships with vendors strong.
7. Performance monitoring with management accounts
We don’t just do your year-end accounts and disappear. With monthly or quarterly management accounts, you’ll have a regular snapshot of how your business is performing—including margins, costs, profits, and cash availability.
8. Support during low seasons or emergencies
We work with you to build financial buffers and set aside contingency funds for quieter trading months, equipment repairs, or unexpected bills. Having a plan for lean periods can reduce stress and increase your long-term resilience.
Don’t let cash flow hold you back
Cash flow problems are one of the top reasons restaurants struggle—but they’re also among the most preventable. With the right accountant by your side, you can take control of your cash, reduce waste, avoid financial surprises, and confidently grow your business.
At 3E’S, we understand the hospitality industry inside and out. We tailor our support to your unique business model—whether you’re managing a high-street café, a busy takeaway, a pop-up kitchen, or a chain of restaurants. With regular check-ins, actionable insights, and proactive planning, we don’t just keep you compliant—we help you stay one step ahead.
From managing seasonal highs and lows to planning for expansion, we’re here to support your long-term success with practical, numbers-driven guidance you can rely on. Want to take control of your restaurant’s cash flow? Get in touch today for a no-obligation chat with one of our experts.
