Accounting for Food & Beverage (F&B) Businesses in Singapore 2025

Introduction

The food and beverage (F&B) industry in Singapore is highly competitive, with businesses ranging from hawker stalls, cafes, restaurants, cloud kitchens, and catering services to franchised fast-food chains. With rising ingredient costs, rental expenses, staff wages, and strict compliance regulations, proper accounting and financial management are crucial for profitability and long-term sustainability.

By implementing efficient accounting systems, tracking revenue accurately, and optimizing tax planning, F&B businesses can maintain healthy cash flow and operational efficiency.

This article explores key accounting considerations for F&B businesses in Singapore in 2025, including bookkeeping, revenue tracking, tax compliance, payroll management, cost control, and financial planning.

---

1. Understanding Revenue and Cost Structures in F&B Businesses

Unlike service-based industries, F&B businesses must manage daily cash flow, fluctuating inventory costs, and seasonal demand variations.

Revenue Sources

• Dine-in & Takeaway Sales – Income from restaurant, cafe, or hawker stall customers.
• Online & Delivery Sales – Revenue from food delivery platforms (GrabFood, Foodpanda, Deliveroo, Oddle, Chope, and direct orders).
• Catering & Event Sales – B2B or private event catering services.
• Franchise & Licensing Fees – Fees from operating multiple outlets under a brand.
• Retail Packaged Food Sales – Sale of bottled sauces, pre-packaged meals, and specialty food items.
• Memberships & Subscription Plans – Recurring revenue from loyalty programs or exclusive dining memberships.

Key Cost Components

• Food Ingredient Costs – Purchasing fresh produce, meat, seafood, and dry goods.
• Rental & Utilities – Leasing commercial kitchen space, restaurant premises, and managing utility bills.
• Wages & Staff Salaries – Paying chefs, kitchen assistants, servers, and cleaning staff.
• Food Packaging & Delivery Costs – Expenses for takeaway packaging, delivery fees, and eco-friendly containers.
• Marketing & Promotions – Digital ads, influencer collaborations, and seasonal campaigns.
• Equipment & Maintenance – Cost of stoves, ovens, refrigeration, and regular equipment servicing.
• Regulatory Compliance & Licensing – Licenses from Singapore Food Agency (SFA), Halal certification (MUIS), and alcohol licenses.

By tracking these revenue streams and costs properly, F&B businesses can maximize profit margins and ensure business sustainability.

---

2. Importance of Proper Bookkeeping for F&B Businesses

Daily financial tracking ensures cost control, efficient revenue management, and tax compliance.

Daily & Weekly Record-Keeping

• Record daily sales transactions from POS systems.
• Track inventory usage and wastage to prevent over-purchasing.
• Maintain records of supplier invoices and vendor payments.

Managing Accounts Payable & Receivable

• Invoice corporate clients and event catering customers promptly.
• Track unpaid invoices from wholesale clients and bulk orders.
• Monitor supplier payments for ingredient restocking and restaurant equipment.

Using Accounting Software for Automation

Many F&B businesses use Xero, QuickBooks, or MYOB to track daily transactions, automate supplier payments, and generate financial reports.

---

3. GST and Tax Compliance for F&B Businesses in Singapore

GST for Restaurants, Cafes & Food Delivery

• F&B businesses earning over SGD 1 million annually must register for Goods and Services Tax (GST).
• GST-registered businesses must charge 9% GST (effective 2024) on dine-in, takeaway, and catering services.
• Some food and beverage items may be GST-exempt if they fall under essential food categories.
• Businesses must file quarterly GST returns and maintain accurate tax records.

Corporate Tax Considerations

• Singapore’s corporate tax rate is 17%, with Start-Up Tax Exemption (SUTE) benefits for new restaurants and food chains.
• Common tax deductions include ingredient purchases, kitchen equipment depreciation, staff wages, and marketing expenses.
• F&B businesses investing in automation and digital ordering systems may qualify for government grants and tax rebates.

Ensuring proper tax compliance and GST classification helps F&B businesses minimize tax liabilities and improve profitability.

---

4. Managing Payroll and Employee Compensation

The F&B industry relies on a mix of full-time staff, part-time workers, and contract employees, requiring efficient payroll management.

Payroll for Employees

• Employers must contribute to CPF (Central Provident Fund) for Singaporean and PR employees.
• Foreign workers require valid S Pass or Work Permits, and businesses must comply with Ministry of Manpower (MOM) regulations.
• F&B workers may require overtime pay and weekend allowances under the Employment Act.

Managing Freelancer & Contract Staff Payments

• Many restaurants and catering businesses hire freelance chefs, waiters, and event staff.
• Payments must be properly documented, and businesses should issue Form IR8A for tax reporting.
• Payroll software like Talenox, Payboy, or HReasily helps automate salary processing, CPF contributions, and tax filings.

---

5. Financial Planning and Budgeting for F&B Businesses

Cash Flow Forecasting

• Maintain a cash reserve for at least 3-6 months to cover rent, salaries, and ingredient purchases.
• Plan for seasonal demand fluctuations, such as peak sales during festivals, holidays, and promotional periods.

Break-Even Analysis

• Calculate the break-even point per menu item to determine pricing strategy.
• Monitor cost-per-dish vs. selling price to optimize profit margins.

Financial Reporting for Decision-Making

• Monthly Profit & Loss (P&L) statements help restaurants track revenue growth and cost efficiency.
• Regular financial audits ensure compliance and highlight areas for cost reduction.

---

6. Common Accounting Mistakes to Avoid in F&B Businesses

1. Poor Inventory & Waste Management

• Overstocking perishable ingredients can lead to financial losses.

2. Delayed Supplier Payments & Cost Overruns

• Unpaid invoices or excessive spending on bulk orders can cause cash flow issues.

3. Not Allocating GST & Tax Reserves

• Many F&B businesses fail to set aside GST and corporate tax reserves, leading to financial strain.

4. Mismanaging Payroll & Overtime Compensation

• Lack of proper staff scheduling and overtime pay tracking can lead to compliance penalties.

Avoiding these mistakes ensures better financial control and sustainable operations.

---

7. Leveraging Accounting Software and Automation

Best Accounting Solutions for F&B Businesses

• Xero & QuickBooks – For automating bookkeeping, invoicing, and tax compliance.
• Revel & Lightspeed POS – Integrated point-of-sale (POS) and accounting systems for restaurants.
• Google Sheets & Financial Dashboards – For tracking menu profitability and food cost analysis.

Automation enhances financial accuracy, efficiency, and business scalability.

---

8. Why Engage a Professional Accountant for F&B Businesses?

A professional accountant can help F&B businesses optimize tax planning, manage cash flow, and ensure compliance with Singapore’s financial regulations.

Key Benefits of Hiring an Accountant:

• Tax Planning & GST Compliance – Ensures accurate filings and tax deductions.
• Cost & Revenue Optimization – Helps track ingredient costs, menu pricing, and profitability.
• Financial Forecasting & Expansion Planning – Supports business growth and franchise expansion.

Hiring an accountant allows F&B businesses to focus on customer service while maintaining financial stability.

---

Conclusion

Accounting for F&B businesses in Singapore in 2025 requires effective financial management, tax compliance, and strategic budgeting.