Food & Beverage Accounting: Things You Must Know

Accounting is considered as the main language of any business. It is something that needs to be understood by the employers, however, many restaurant managers face issues with it due to their busy schedules. Therefore, it becomes important to understand the basics of accounting and bookkeeping in order to ace your restaurant’s financials. Discovering better approaches to run your restaurant includes understanding where your Cash flows. A good accounting service in the UAE can help you with managing your accounts and financials. Read on further to know more about the tips for saving you time and money while managing your F&B outlet.

4 Important Things About F&B Accounting

Chart of accounts

Chart of accounts is a term of accounting that is used to sort the cash that flows in and out of your Food & Beverage business. There are many software that prepare the chart to aggregate information about the restaurant’s financial statements. Charts help to categorize the statements into subcategories such as sales and marketing and also helps with audit and tax.

A nice way would be to list food on your chart of accounts is by observing waste. You must list it as an operating expense directly under food expenditures. Such type of supervising is really useful especially when you are managing a fast-food franchise.

Cost of all ingredients

The cost of goods sold (COGS) is the total cost of all the ingredients and items on your menu. The smaller number is actually the larger profit margin for your restaurant. This must be your ultimate goal but you need to be very careful about it. You need to make sure that you must not compromise the quality of your food otherwise you might lose your reputation. Let’s know how you can lower your COGS number.

  • purchase less expensive items, take a stab at renegotiating with your provider
  • purchasing in mass, but ensure your product is still new
  • Check stock intently, stopover requesting an inventory management system.

Your COGS straightforwardly benefits you per plate sold. Use it to help manage your estimates as well, but recall to benchmark against your nearby rivals. Know your market.

F&B costs

F&B costs are a bit different from various sorts of SMEs’ costs. Standard costs are work expenses, occupancy, and operating expenses. Restaurants are the only type of SME that has occupancy expenses as a category on their income statements. It is very essential to understand to he difference between occupancy expenses and operating expenses. Labour costs are probably the biggest cost for a restaurant, so don’t let these gobble up your benefits.

Cost control

Your F&B outlets’ prime expense is your COGS in addition to your labour costs. A decent benchmark for the prime expense is 60% or less of your income. It is crucial to monitor prime expenses consistently as labour and COGS are the two costs that are least demanding to control.

Big restaurants will have a high cost whereas littler restaurants may have a low cost. The prime expense comprises most of a restaurant’s costs since it incorporates the entirety of the food and beverage ingredients, and all finance costs, taxes, and profits.


Viable accounting for restaurants is one of the most significant parts of making your business fruitful. Since the net revenues in restaurants are thin, it is vital to watch out for the accounting cycle. What makes restaurant accounting interesting is the language of hospitality finance. For proficient accounting, you have to comprehend the intricate details of the food and drink industry or approach a well-known accounting service in UAE.

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Read More:

Accounting for Food & Beverage Industry

Why to Setup Food Trading Company in UAE?

Cost Accounting for Hospitality and F&B Industry

Cost Control – Give New Life To Your Restaurant

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