The food and beverage sector in the UAE has grown fast over the last decade. Dubai alone has thousands of restaurants, cafés, and cloud kitchens operating across malls, high streets, and delivery platforms. The market value of the UAE food service industry crossed AED 130 billion in recent estimates, and Dubai remains the largest contributor. In those areas, the growth has been driven by tourism, rising disposable income, and the continued expansion of internet delivery platforms. At the same time, margins in the industry are tight. Most F&B businesses operate on single-digit profit margins, and a small error in costing or tax treatment can wipe out profits for months. This is where proper Accounting for F&B becomes central to survival.
Many owners focus on recipes, menu design, and customer experience. These matter. Yet the businesses that last are the ones that understand their finance from day one. Accounting for F&B does not merely involve recording sales and expenses but also tracking food cost, wastage, staff productivity, delivery commissions, and tax obligations. In Dubai and across the UAE, compliance requirements have also become stricter. VAT, corporate tax, and audit expectations require discipline. For this reason, many operators look for the best chartered accountants in Dubai to manage compliance and improve profitability.
At SSCOGLOBAL, we have closely worked with restaurants, cafés, and cloud kitchens across the UAE, and we have seen common patterns. New restaurants begin their operations with strong brand identities yet their accounting systems remain underdeveloped. Established restaurants have access to data yet they fail to perform proper data analysis. Cloud kitchens operate at high speed yet they encounter difficulties when attempting to monitor expenses across different delivery platforms. Accounting for F&B connects all these elements. When done right, it gives owners clarity. It shows which menu items make money, and which ones only add volume. It shows where wastage occurs and how to control it. It also ensures compliance with the Federal Tax Authority, which has clear requirements for VAT records and tax filings.
Why Accounting is imperative for F&B
The F&B sector is unique because of inventory movement. Food inventory is perishable; it moves daily, prices fluctuate, and suppliers change rates based on season and demand. This makes Accounting for F&B more dynamic than accounting for a trading company. A restaurant can have hundreds of ingredients moving through the kitchen every week. The cost of goods sold depends on the price of each ingredient. A 10% increase in chicken prices will directly reduce profit margins. Business owners will fail to observe the profit reduction until their tracking system breaks down.
Industry reports show that restaurants typically spend 28–35% of revenue on food. In Dubai, high rent and staffing costs push expenses even higher, rent alone can be 10–15% of revenue in prime areas. On top of that, delivery platforms take 18–30% in commissions. Because margins are tight, accurate F&B accounting is critical. Even a 1% improvement in cost control can significantly boost profits.
The best chartered accountants in Dubai understand these industry dynamics. They go beyond bookkeeping. They help build cost structures, implement inventory controls, and create reporting that owners can use daily. They also ensure compliance with the Federal Tax Authority. The FTA requires VAT-registered businesses to maintain records for at least five years. These records include invoices, credit notes, import records, and accounting books. Restaurants that do not maintain proper records risk penalties. Late VAT returns can lead to fines starting from AED 1,000 and increasing with repeated delays. Incorrect filings can lead to higher penalties.
The Structure of Accounting for Restaurants and Cafés
A strong accounting system is based on proper chart of accounts. Restaurants need categories that reflect their operations. Sales should be split by dine-in, takeaway, and delivery. Costs should be split into food cost, beverage cost, staff cost, rent, utilities, and marketing. Accounting for F&B becomes useful only when data is structured in a way that shows trends. Owners should be able to see weekly sales and weekly food cost. Monthly reports are helpful, but weekly reports allow faster decisions.
Inventory management plays a central role. Many restaurants in Dubai import ingredients or rely on multiple suppliers. Prices can change often. Accounting for F&B requires regular stock counts. Most successful operators perform weekly or bi-weekly stock counts. This helps identify wastage and theft. It also helps maintain accurate cost of goods sold. Without stock counts, food cost percentages can be misleading.
The best chartered accountants in Dubai often implement integrated systems. These systems connect point-of-sale for example foodics data with accounting software such as quickbooks, zoho or tally. This allows automatic posting of daily sales. It also helps track payment methods, including cash, card, and online platforms. Integration reduces manual errors. It also speeds up reporting. In a fast-moving environment like a cloud kitchen, speed matters.
VAT and Compliance for F&B Businesses in the UAE
VAT was introduced in the UAE in 2018 at a standard rate of 5%. Restaurants and cafés must charge VAT on most food and beverage sales. Accounting for F&B must include accurate VAT treatment for sales and purchases. Input VAT on purchases can be reclaimed if records are maintained correctly. Output VAT must be reported on sales. Errors in classification can lead to penalties.
The Federal Tax Authority requires businesses to file VAT returns either quarterly or monthly, depending on turnover. Records must include tax invoices that meet FTA requirements. These invoices must show supplier details, VAT registration numbers, invoice dates, and tax amounts. For restaurants, POS systems must be able to generate compliant invoices. The FTA has issued guidance that electronic records are acceptable if they are accessible and stored securely.
Corporate tax has also become relevant. The UAE introduced a 9% corporate tax on business profits exceeding AED 375,000. Many restaurants now fall within the scope of corporate tax. Accounting for F&B must therefore include proper profit calculation. Expenses must be documented. Related party transactions must be recorded. Transfer pricing rules may apply if a restaurant group operates multiple entities.
The best chartered accountants in Dubai help businesses align with these rules. They ensure that accounting records support tax filings. They also help plan for tax efficiency. For example, they may advise on cost allocation between branches or on structuring franchise operations.
Cost Control and Profitability in the F&B Sector
Profitability in F&B depends on tight cost control. Food cost and labor cost are the largest components. Accounting for F&B provides visibility into both. Owners should know their prime cost, which is the sum of food cost and labor cost. Industry benchmarks suggest that prime cost should stay below 60% of revenue for most restaurants. If prime cost rises above this level, profits shrink quickly.
Menu engineering is another area where accounting data helps. Sales data can show which items sell most often and which generate the highest margins. Accounting for F&B allows owners to calculate contribution margins for each menu item. Items with high sales but low margins may need price adjustments. Items with high margins but low sales may need better placement on the menu.
The best chartered accountants in Dubai often provide dashboards for clients. These dashboards reflect the daily sales, cost of food rate percentages, and labor cost rate percentages. The system enables users to make instant choices between different options. The owners can test supplier prices and portion sizes when food expenses exceed their target limits. The system lets them change their work schedule when their personnel expenses increase.
The Rise of Cloud Kitchens and Their Accounting Needs
Cloud kitchens have changed the F&B industry in Dubai. They do not have dine-in spaces and depend mainly on delivery platforms. This reduces rent costs but increases dependence on technology and logistics. Accounting for cloud kitchens focuses on delivery platform commissions, packaging, and delivery charges, which can make up about 25%–35% of total revenue.
Cloud kitchens also manage multiple brands under one roof. Each brand may have different pricing and cost structures. Accounting for F&B must track performance by brand. This allows owners to see which brands are profitable. It also helps with expansion decisions. If one brand performs well, it can be scaled across locations.
The best chartered accountants in Dubai help cloud kitchens build cost allocation models. Shared kitchen costs must be allocated across brands. Staff costs must be divided accurately. Without proper allocation, profit figures can be misleading.
Building a Scalable Accounting System from Day One
Many restaurant owners delay professional accounting until problems arise. This approach creates risk. Accounting for F&B should start before opening. Budgeting, costing, and system setup should happen during the planning stage. Opening budgets for restaurants in Dubai often range from AED 500,000 for small cafés to several million dirhams for full-service restaurants. Investors expect banks to provide accurate financial reports which investors need to make investment decisions. Therefore, the establishment of early accounting standards establishes financial credibility within organizations.
The best chartered accountants in Dubai offer their support to businesses starting from the pre-launch stage. Their services include establishing accounting software and registering VAT and developing cost frameworks. The staff prepares financial plans and future projections. The forecasts enable business owners to determine their break-even points.
Cash flow management is critical. Even profitable restaurants can face cash shortages if expenses are not timed well. F&B operations need cash flow forecasts as a fundamental requirement for their financial accounting system. The system guarantees timely payments to both suppliers and staff members. The system also enables organizations to prepare for their seasonal business variations. The F&B industry in Dubai experiences increased sales during tourist periods while experiencing decreased sales during summer months. The organization achieves better operational stability through its planning activities for these business cycles.
The Role of Professional Advisors
SSCO Global works with F&B clients across different stages. Startups need system setup and budgeting. Growing businesses need performance analysis and cost control. Established groups do need audit support and tax planning. Accounting for F&B evolves as the business grows. Systems that work for a single café may not work for a multi-branch chain. Advisors help adapt systems over time.
About the Author
The UAE remains a competitive market. New restaurants are open every week. some succeed, while many closes within the first three years. Industry estimates suggest that around 60% of restaurants may close within three years if financial discipline is weak. The implementation of effective accounting practices for food and beverage operations increases business survival rates while delivering precise financial information which guides better decision-making processes.
FAQ’s
What is Accounting for F&B?
Accounting for F&B means tracking all money coming in and going out in a food business. It includes sales, food cost, staff salaries, rent, and taxes. Restaurants need it because profit margins are small. If costs are not tracked daily, a restaurant can lose money even when sales look high.
How is restaurant accounting different from normal business accounting?
Restaurant accounting deals with perishable inventory and daily sales. Food items expire and prices change often. Sales come from dine-in, takeaway, and delivery apps. Because of this, Accounting for F&B requires daily tracking of inventory and costs which is different for normal accounting where inventory movement is slow.
Do cafés need accountants?
Yes. Even small cafés need clear records and tax filing.
Who are the best chartered accountants in Dubai for restaurants?
Firms with F&B experience who handle VAT, tax, and cost control.
How much does restaurant accounting cost in Dubai?
On average, small outlets may pay AED 1,500–3,000 monthly.
What taxes do restaurants pay in UAE?
5% VAT and 9% corporate tax on profit above AED 375,000.
How often should accounts be checked?
Sales daily, costs weekly, full reports monthly.
What is food cost percentage?
It is ingredient cost compared to total sales. Usually between 28% and 35% is considered a good food percentage.
About the Author:
Sana Fatima
Sana Fatima is the author of this piece of writing and an aspiring Chartered Accountant. She possesses practical knowledge in finance, accounting, taxation, audit, and business law dynamics. She uses her skills to translate difficult tax and accounting subjects into comprehensive materials. Her writing helps business teams and non-specialists understand the rules which govern their work.
