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

Introduction

The Food & Beverage (F&B) industry in Singapore is a dynamic and competitive sector. From hawker stalls to fine-dining restaurants, the success of an F&B business depends not only on food quality and customer service but also on sound financial management. Proper accounting practices help business owners keep track of revenue, control costs, and comply with Singapore’s financial regulations.

In this article, we explore the key accounting considerations for F&B businesses in Singapore in 2025, including bookkeeping, tax compliance, profit margin analysis, and financial best practices.

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1. Understanding Revenue and Cost Structures in F&B

F&B businesses have unique financial structures compared to other industries. They deal with high operating expenses, fluctuating costs, and strict regulatory requirements. Here are some key financial components that every F&B business owner should track:

Revenue Sources

• Dine-in and takeaway sales – The primary source of revenue for restaurants and cafes.
• Delivery and online orders – Increasingly significant due to platforms like GrabFood, Foodpanda, and Deliveroo.
• Catering services – Bulk orders for events and corporate clients.
• Beverage and alcohol sales – Additional income for restaurants and bars.

Key Cost Components

• Cost of Goods Sold (COGS) – Includes raw ingredients, packaging, and food wastage.
• Labour costs – Salaries for chefs, servers, and kitchen staff.
• Rental and utilities – A major expense, especially in prime locations.
• Marketing and promotions – Advertising, influencer collaborations, and menu updates.
• Licensing and compliance costs – Licenses from the Singapore Food Agency (SFA), alcohol permits, and hygiene certifications.

By tracking these costs effectively, F&B owners can better manage their cash flow and profitability.

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2. Importance of Proper Bookkeeping for F&B Businesses

Accurate bookkeeping is essential for F&B businesses to keep track of their financial transactions, detect errors, and ensure compliance with Singapore’s tax regulations. Some bookkeeping best practices include:

Daily and Weekly Record-Keeping

• Record all cash and card transactions at the end of each day.
• Reconcile Point-of-Sale (POS) system reports with actual sales figures.
• Monitor inventory levels to prevent stock shortages or over-purchasing.

Handling Cash Flow Efficiently

F&B businesses often deal with tight cash flow. Business owners must:

• Keep track of accounts payable and accounts receivable.
• Ensure prompt payment to suppliers to maintain good relationships.
• Set aside funds for taxes, rental, and emergency expenses.

Use of Accounting Software

Many F&B businesses use cloud-based accounting software like Xero, QuickBooks, or MYOB to automate bookkeeping tasks. These tools integrate with POS systems and provide real-time financial reports.

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

Understanding GST Registration

• F&B businesses with annual revenue exceeding SGD 1 million must register for Goods and Services Tax (GST) with IRAS.
• GST-registered businesses must charge 9% GST (effective from 2024) on their food and beverage sales.
• Quarterly GST filing is required, and businesses must keep proper tax records for at least five years.

Corporate Tax Considerations

• Singapore’s corporate tax rate remains 17% on chargeable income.
• New startups can enjoy tax exemptions under the Start-Up Tax Exemption (SUTE) Scheme, reducing their tax burden.
• F&B owners should take advantage of allowable tax deductions, such as rental, utilities, and depreciation of kitchen equipment.

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4. Managing Payroll and Employee-Related Expenses

The F&B sector is labour-intensive, and payroll management is crucial. Here are key considerations:

CPF Contributions and Work Passes

• Employers must contribute to the Central Provident Fund (CPF) for Singaporean and PR employees.
• Foreign workers require valid S Pass or Work Permit, and employers must pay a foreign worker levy.

Overtime and Shift Allowances

• Employees working beyond 44 hours per week are entitled to overtime pay under the Employment Act.
• Weekends, public holidays, and late-night shifts may require additional allowances.

Payroll Software for Automation

Using payroll software like Talenox, Payboy, or HReasily ensures compliance with CPF contributions, IRAS filings, and timely salary disbursement.

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5. Inventory and Cost Control Strategies

Effective inventory management is critical for F&B businesses to control costs and reduce wastage. Key strategies include:

1. Implementing Inventory Tracking Systems

• Use software like MarketMan or FoodZaps to monitor ingredient usage.
• Conduct regular stock checks to prevent overstocking and spoilage.

2. Reducing Food Wastage

• Introduce portion control and monitor plate wastage.
• Donate surplus food through initiatives like The Food Bank Singapore.

3. Supplier Management

• Negotiate bulk discounts with suppliers to lower ingredient costs.
• Compare multiple vendors to secure the best deals on fresh produce and dry goods.

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6. Financial Planning and Budgeting for F&B Businesses

To ensure profitability and business growth, F&B owners should set up a proper financial plan. Key areas to focus on include:

Cash Flow Forecasting

• Plan for seasonal fluctuations in demand (e.g., festive periods, Chinese New Year).
• Maintain a cash reserve to cover at least 3-6 months of operating expenses.

Break-Even Analysis

• Calculate the break-even point to determine the minimum sales needed to cover costs.
• Monitor key performance indicators (KPIs) like gross profit margin and cost-to-revenue ratio.

Financial Reporting for Decision-Making

• Monthly profit and loss (P&L) statements help track business performance.
• Annual audits ensure compliance and provide insights into financial efficiency.

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

1. Not Separating Personal and Business Finances

Many small F&B business owners mix personal and business expenses, making tax filing difficult. Always maintain separate bank accounts.

2. Poor Record-Keeping

Failing to document transactions properly can lead to inaccurate financial reports and penalties from IRAS.

3. Ignoring Profit Margins

While high sales are good, profitability is key. Track food costs, labour expenses, and operating overheads to maintain healthy margins.

4. Late GST and Tax Filings

Delays in GST and corporate tax filing can result in fines and penalties. Work with a professional accountant to ensure timely compliance.

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Conclusion

Accounting for F&B businesses in Singapore in 2025 requires careful planning, financial discipline, and compliance with tax regulations. Whether you run a hawker stall, café, or full-service restaurant, proper bookkeeping, inventory control, and payroll management are crucial for long-term success.

By leveraging accounting software, financial reports, and professional accounting services, F&B owners can streamline operations, improve profitability, and focus on delivering great food and service.