Accounting for Restaurants and Cafes in the UAE

Restaurants and cafes are high-volume, thin-margin, cash-and-card businesses. The accounting challenge isn't complexity per transaction — it's volume, timing and leakage. The goal is a daily routine that turns POS data into reliable numbers.

The daily cycle

1. Close the POS at end of day and print the Z report (sales by payment method, discounts, voids, refunds, VAT).
2. Count the cash and compare it with the POS cash total; record any shortage or surplus.
3. Bank the cash intact and record the deposit.
4. Post daily sales to the ledger by category (food, beverage, delivery) and payment method.
5. Reconcile card settlements when the acquirer pays — usually net of fees and a day or two later.

If the POS and the accounting system are separate, someone re-keys these totals every day. If they're integrated, they post automatically — see integrated POS vs separate POS and accounting and POS and accounting software for UAE retail.

VAT

Restaurant sales are normally standard-rated at 5%. Menu prices are usually shown VAT-inclusive; extract VAT with the VAT Calculator: VAT = gross × 5 ÷ 105. Service charges and tips need care: a mandatory service charge is generally part of the taxable consideration, while genuine voluntary tips handed directly to staff may be treated differently. Confirm the treatment with an adviser. A simplified tax invoice is usually appropriate for walk-in customers — see tax invoice vs simplified tax invoice.

Food cost and margins

Food cost % = cost of ingredients used ÷ food sales. Many operators aim for roughly 28–35%, varying by concept. Calculate cost of goods sold properly:

COGS = opening stock + purchases − closing stock

Use the COGS Calculator and read COGS and gross profit. Track:

• Prime cost (food + beverage cost + labour) — commonly the number to watch.
• Wastage and spoilage, recorded separately from sales cost.
• Theoretical vs actual usage — recipes say what you should have used; a gap points to waste, over-portioning or theft.
• Menu item margins — see profit margin vs markup.

Delivery platforms

Aggregators pay you net of commission, often with VAT on the commission and marketing fees. To keep books accurate:

1. Record gross sales per platform as revenue.
2. Record commission and fees as expenses, with input VAT where you hold a valid tax invoice.
3. Reconcile each payout statement to the bank deposit, and chase differences.
4. Track refunds and adjustments the platform makes.

Recording only the net payout as "sales" understates revenue and VAT output and hides the real cost of the channel.

Staff and payroll

Hospitality is labour-heavy. Keep a payroll register, pay through WPS, and accrue end-of-service gratuity and leave. See the UAE gratuity calculation guide and the WPS SIF Generator. Overtime rules matter on long shifts — see UAE overtime pay rules.

Fixed costs

Rent, DEWA/utilities, licences, equipment and maintenance. Capitalise kitchen equipment and fit-out and depreciate — see fixed assets and depreciation.

Controls that matter

• Voids, refunds and discounts reviewed daily by a manager.
• Role-based POS permissions — cashiers shouldn't void or edit totals.
• Daily cash count with a second person.
• Stock counts at least monthly, weekly for high-value items.
• Supplier invoices matched to deliveries.

See the internal controls checklist.

One system for POS, stock, VAT and the ledger

Pyalm Books includes a built-in POS with product search and barcode scanning, stock control and multi-store support, with every sale posting to stock, VAT and the ledger — no end-of-day re-keying. It also handles purchases, bank reconciliation and VAT return reporting, and it's free during beta.

Rules and thresholds change. Confirm the current position with the Federal Tax Authority (tax.gov.ae) or a qualified adviser before you file or pay.