Accounting for Restaurants & Cafés
UAE 2026

In the restaurants or cafés, accounting revolves around purchases, sales, inventory, and reconciliation. Under the periodic method, all supplier bills are filed under cost of goods sold (COGS). In parallel, the accounting software records invoices from the point-of-sale (POS) and delivery orders from aggregators. For smooth operations, you must keep an eye on inventory by tracking recipe-based theoretical usage in Foodics versus the monthly physical count. Finally, you must reconcile the payouts from aggregators like Talabat, Deliveroo, Careem, and NoonFood, as well as cash and card terminal settlements, to the AED bank account. All four aspects impact your VAT filings and monthly profit and loss. The flow chart above shows where each transaction lands and who owns each step.

A UAE F&B chart of accounts needs to mirror the operating reality. Revenue must be split by channel, cost of goods sold must be split by category, and operating costs must be grouped by station. For instance, you can rely on the menu structure inside Foodics for revenue grouping for the POS stream. To avoid weeks of re-tagging and muddled books, you should set modifiers and categories in Foodics first and then map them to GL accounts before sales begin.

You must record each line item from each platform’s settlement statement as separate expense lines per platform (e.g., the Talabat Commission, Deliveroo Delivery Fees, and Careem Marketing) in your accounting system at reconciliation time and not at the moment of sale. If you do not split booking commissions, it will destroy per-channel margin visibility. The gross sales from platforms are recorded in the respective Platform Clearing Account from which commissions and fees are subtracted, and the net AED transfer clears the account when the amount is received in the bank account.

The Z-report is the closing-of-day snapshot consisting of gross sales, sales by payment method, VAT, voids, refunds, discounts, and tips. Daily reconciliation of this report is done in three legs. Card sales are tied to the Network International settlement. Cash sales tie to the physical cash count and the bank deposit slip. Aggregator orders match each platform’s payout cycle. Any short/over on cash should be posted as a Cash Variance adjustment the same day, since chasing these discrepancies later is heavy-duty forensic work. Reconcile the Z-report before any sale gets re-rung, then post the day’s sales summary into Zoho Books.

Food cost variance is the gap between the theoretical food cost and the actual food cost. The theoretical food cost is what Foodics recommends you should have used, based on recipe-driven ingredient deductions for every item sold. The actual food cost is calculated by subtracting the closing stock (physical count) from the sum of opening stock and purchases. Any gap (food cost variance) between these figures can be attributed to wastage, over-portioning, spillage, comps, staff meals, and theft. You must track food cost variance monthly at a minimum and weekly for high-value SKUs like proteins and alcohol.

Since UAE-registered aggregators like Talabat and Careem charge VAT on commissions directly, you can recover it as input VAT on your FTA filing. However, foreign platforms require you to apply the reverse charge mechanism (RCM), where you self-assess 5% output VAT and recover the matching input VAT. The net cash impact is zero, but you must still report it on VAT returns. You should check the tax invoice origin every quarter. Aggregators restructure their billing entities periodically, which can cause mistakes in RCM, the most common FTA audit findings in the UAE F&B.

Tips and service charges are treated very differently. A service charge is the restaurant’s revenue, and hence, it is subject to 5% VAT. Before you distribute the service charge among the staff, it must be recognized in the Service Charge Revenue account. A tip is generally treated as a pass-through to staff. It is held in a Tips Payable Liability account and not recognized as restaurant revenue, so no VAT applies to the tip itself. Card tips that hit the Network International settlement still need to be backed out of revenue and parked in the liability account before payroll distributes them. You should document your tipping policy since it is the first line auditors check.

Restaurants typically need to use accrual basis accounting and cash basis accounting in tandem. Accrual accounting provides a clear picture of profitability; however, cash basis accounting provides better insights into working capital health, which is a critical factor given the industry’s thin margins.

The 30-30-30 rule (sometimes extended to the 30-30-30-10 rule) is a framework for managing costs at a restaurant. It recommends that Cost of Goods Sold (COGS), labor costs, and operating expenses should each be 30% of the revenue, and the remaining 10% will be your profit margin. However, this is a general recommendation that may not apply to all restaurants and should not be taken as a strict rule.

Restaurants can rely on broadly used accounting software such as Zoho Books, Odoo, and Xero, or specialized software like Foodics.

There are various tools in the market that will tell a restaurant owner key metrics like prime cost percentage and revenue per available seat hour, but accurate recordkeeping is what forms the bedrock of such analysis. Our restaurant accounting map helps you confidently record accurate entries faster.