---
title: "Theoretical vs Actual Variance Report"
slug: "theoretical-vs-actual-report"
description: "Compare theoretical vs. actual inventory usage with variance-cap calculations across configured categories. Single-location report."
updated: 2025-08-26T17:00:06Z
published: 2025-08-26T17:00:06Z
canonical: "docs.restaurant365.com/theoretical-vs-actual-report"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://docs.restaurant365.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Theoretical vs Actual Variance Report

In Beta

This feature is in beta for select customers. Contact your CSM for more information.

The Theoretical vs Actual Variance report compares the theoretical usage of certain inventory items or categories against actual data, in terms of both quantities and dollar amounts and their percent of net sales. It also shows and compares the variance between them.

The Theoretical vs Actual Variance flags variances that are in excess. This means that the location used more product than it ideally should have. The inclusion of positive and negative variance columns allow users to get a snapshot of how an item category is contributing to the variance.

In addition to theoretical vs actual values and variances, this report allows users to expand/collapse the ‘actual’ usage column. This function opens columns that show what is calculated into the usage, including:

- Beginning inventory count
- Transfers
- Ending inventory count
- Purchases (Items on AP invoices/credit memos)

This report provides a deeper dive into the quantity, cost, and use of each purchased item to find solutions to limit the biggest food cost variances.

Users can drill down into the items that make up the item categories and their transactions. Users can also view a full list of all the items.

> [!NOTE]
> This report calculates theoretical usage using historical POS (point of sale) and PMIX (menu item) data.

---

## Navigation

The My Reports search bar can be used to search R365's entire catalog of reports.

1. Open the **Reports** app.
2. Navigate to **My Reports**.
3. Enter all or part of the report name in the **search bar**.
4. The **Results** tab will open with the list of search results.
5. From beneath the report name, click **Run** to run the report with the selected report view. -OR- Click **Customize** to adjust the report parameters and run the report.

![Overview of report options in Restaurant365 with highlighted run and customize buttons.](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/report.png)

---

## Report Parameters

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-MIGTIP4V.png)

| **Field** | **Description** |
| --- | --- |
| Location | The location that the report is run for. The location selection will determine the counts that are available in From Count and To Count. |
| From Count | Starting inventory count from which to pull data. The From Count and To Count selections create a date range for the generated report to display data. |
| To Count | Ending inventory count from which to pull data. The From Count and To Count selections create a date range for the generated report to display data. |
| Key Items Only | If Yes is selected, the report includes [key items only](/doc/docs/purchased-item-record-overview-security). If No is selected, the report includes all items. |
| Show Unapproved | If Yes is selected, the report includes data from unapproved transactions. If No is selected, the report only accounts for approved transactions. > Yes is selected by default. This allows accounting staff to close the period at their discretion while enabling operations to run vital Reports in real time without waiting for all transactions to be approved. |
| Count Time | Time of day from which transactions are pulled. Options include: - **Beginning of Day** - Uses transactions from the DAY OF the From Count to the day BEFORE the To Count.. - **End of Day** - Uses data from the day AFTER the From Count through the DAY OF the To Count. > [!NOTE] > Example: If Count From is set to 02/10/YY and Count To is set to 02/17/YY, the report uses transactions from 02/11/YY to 02/17/YY. |
| Item Category 1, 2, 3 | Filters the items that appear in the report by the selected [item categories](/doc/docs/item-categories). |
| Show % of Sales | If **Yes** is selected, the Actual %, Theo %, Variance %, Total Positive Variance, and Total Negative Variance columns appear in the report. If **No** is selected, the report does not display these three columns. |
| Sales Account | Filters the report to show data for selected sales accounts. |
| Efficiency Calculation (Waste) | Include or exclude waste in percentage calculations. |
| Efficiency Calculation (Donations) | Include or exclude donations in percentage calculations. |
| Actual Usage Dollar | Determines whether item costs are based on the: - **Transaction Cost** - Pulls the actual item's cost as it was at the time of each transaction that occurred between and including the beginning and ending count. - **Unit Cost** - Pulls the item's current inventory cost from the Item record as of the time the report was generated. If using [item locations](/doc/docs/item-location-records), this option pulls cost data from the store's item location. - **End Count Cost** - Pulls the cost of all items from the ending inventory count used for this report. |
| Waste Calculations | Shows or hides inventory that was documented in the waste count. |
| Donation Calculations | Shows or hides inventory that was documented in the donation count. |
| Items to Display | If **Counted Only** is selected, the report shows only inventory count items. If **All Items** is selected, all purchased items are included in the report. |
| Calculate Based On | Determines whether the report is calculated based on the default Inventory UofM 1 or the item's Reporting U of M. |
| View options | Provides the user with options to select, save, edit, or delete a report view. Learn more about [using my reports](/doc/docs/my-reports-using-my-reports#report-views). |
| Run | Generates the report. The green arrow button opens a drop-down from which users can Export, Email, or Print the report.![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/ccaf8b31-5d8a-40b5-b850-cdf7d7ad05ee.png) |

---

## Report Columns

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-D47KUHKO.png)

The header displays the following information:

- **Begin Inventory** - First inventory count included in the report.
- **End Inventory** - Final inventory count included in the report.
- **Report Parameters** - The report parameter selections for the data shown.
- **Net Sales** - Total net sales for all items in the report.

| **Column** | **Description** |
| --- | --- |
| Item Categories | Item categories can be clicked to drill down into the items that make up the category. |
| Count UofM | Unit of measure for each item as used when conducting an inventory count. This UofM is either the Inventory UofM1 of the Reporting UofM. This is dependent on what is selected in the report parameters. > [!NOTE] > This column is only visible when drilled into an item category. |
| Avg Cost | Average cost per unit. > [!NOTE] > This column is only visible when drilled into an item category. |
| **Quantity Usage** |
| Theo | Theoretical number of items used. |
| Begin | Starting quantity of each item as shown in the first inventory count that was included in the report. > [!NOTE] > This column is only visible when the Actl column is expanded using the + icon. |
| Purch | Quantity of items purchased for the location. > [!NOTE] > This column is only visible when the Actl column is expanded using the + icon. |
| Xfer | Quantity of items transferred to or from the location. > [!NOTE] > This column is only visible when the Actl column is expanded using the + icon. |
| End | Final quantity of each item as shown in the last inventory count that was included in the report. > [!NOTE] > This column is only visible when the Actl column is expanded using the + icon. |
| Actual | Actual number of items used. When expanded, the Beginning, Purchased, Transfer, and End columns appear. |
| Var | Difference between the theoretical amount and the actual amount. This is theoretical minus actual usage. |
| Waste | Number of items that were not used and therefore went to waste. These appear as positive values. > [!NOTE] > This column appears only if Show is selected on the Waste Calculations parameter. |
| Donation | Number of items that were donated. > [!NOTE] > This column appears only if Show is selected on the Donation Calculations parameter. |
| UnExpl Var | Difference between variance and waste. This is theoretical minus actual plus waste. This column can help users better understand why certain items have larger variances than others. |
| Effcy | The theoretical quantity over the actual quantity used. This shows how efficiently this item is being used. |
| **Dollar Usage** |
| Theo | Total theoretical cost of the item. > [!WARNING] > **Actual Usage Dollar - Transaction Cost** > > When Actual Usage Dollar is set to **Transaction Cost,** the theoretical cost shown here is the total theoretical cost of all the transactions that occurred between counts, including the day of the beginning and ending count. The item costs used to calculate this value are the the costs of the item at the time of each different transaction, which are based on the most recent selling price of the item relative to the various transaction(s). |
| Actual | Total actual cost of the item. When expanded, the Beginning Cost, Purchased Cost, Transfer Cost, and Ending Cost appear. > [!WARNING] > **Actual Usage Dollar Parameter Setting** > > - When Actual Usage Dollar is set to **Transaction Cost,** the actual cost shown here is the total cost of all the transactions that occurred between counts, including the day of the beginning and ending count. The item costs used to calculate this value are the various item costs as they were at the point in time of each different transaction. > - When this parameter is set to **Unit Cost**, the actual cost shown here is the total actual cost based on the average cost of the item across all the transactions between and including the beginning and ending counts. > - When this parameter is set to **Ending Count Cost**, the actual cost shown here is based on the cost of the item at the time of the ending count. |
| Var | Difference between the actual cost and the theoretical cost. This is **theoretical minus actual cost.** |
| Waste | Cost items that were not used and therefore went to waste. > [!NOTE] > This column appears only if Show is selected on the Waste Calculations parameter. |
| Donation | Cost of items that were donated. > [!NOTE] > This column appears only if Show is selected on the Donations Calculations parameter. |
| UnExpl Var | Difference between variance and waste. This column can help users better understand why certain items have larger variances than others. |
| Effcy | The theoretical cost over the actual cost of items used. This shows how efficiently this item is being used. |
| **% of Sales** > [!NOTE] > The following columns appears only if the Show % of Sales parameter is set to Yes. |
| Theo % | Percentage of theoretical sales. |
| Actl % | Percentage of actual sales. |
| Total Pos Var | The item category’s total variance if the variance is a positive value. |
| Total Neg Var | The item category’s total variance if the variance is a negative value. |
| Var % | Difference between actual percent and theoretical percent of sales. |

The totals in the column all add up to the row labeled Grand Total, which shows the grand total of all values in the column.

> [!TIP]
> **R365 Tip**
> 
> Clicking the **Grand Total** label will open a new tab with a full list of every item considered for this report.
> 
> ![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-HQEY9DUK.png)
> 
> 
> 
> 
> 
> This opens a list view of all items compared to one another.
> 
> ![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-2DO335JP.png)

---

## Email, Export, or Print the Report

This report can be emailed, exported, or printed in custom formatting directly from the reporting window. Learn more about how to [send, export, or print this report](/doc/docs/my-reports-send-export-or-print-reports).

![](https://cdn.us.document360.io/5c9d1111-0c69-4e96-8910-d7f2750fdc9d/Images/Documentation/image-U3S8UCR9.png)

POS (Point of Sale)

A system used by businesses to process sales transactions and manage customer payments. Connected to R365 through a [POS integration](/doc/docs/pos-integration-overview).

Structured documents that provide insights and summaries of various operational metrics and financial data.

Restaurant365