How to design a chart of accounts for an F&B business

Most Xero accounts we inherit for F&B businesses have a chart of accounts that was either copied from the Xero default template or assembled organically as the business grew. Neither survives contact with multi-outlet, multi-channel F&B reality.

Designing the chart of accounts is the single most consequential decision you make at Xero setup. Done well, it's invisible — every report works, every reconciliation makes sense, every owner question has an obvious place to look. Done poorly, it's a daily friction that everybody learns to work around until eventually someone has to do a full rebuild.

This piece walks through how we design a chart of accounts for an F&B business in Singapore — the choices that matter, the patterns that hold up at scale, the mistakes that don't.

The principle: structure mirrors how the operator thinks

A good chart of accounts isn't designed to make the accountant's life easier. It's designed so the owner can ask “is Outlet B's delivery business profitable?” and the report falls out of the structure without manual reconstruction.

For F&B that means three orthogonal dimensions: what the transaction is (the account), where it happened (the outlet), and how it happened (the channel). The Xero design lever for each:

• The chart of accounts handles what: food cost, beverage cost, rent, labour, marketing, utilities, etc.
• Tracking category 1 handles where: Outlet A, Outlet B, Outlet C, Catering, HQ.
• Tracking category 2 handles how (channel): Dine-in, Takeaway, Delivery (GrabFood), Delivery (Foodpanda), Catering events.

Each dimension is independent. Every transaction gets tagged across all three. The reports then cut however the owner wants.

The revenue side

The most common F&B revenue mistake: one account called “Sales”. Owner can't see which part of the business is generating which dollar.

The structure we use for revenue:

• Sales — food
• Sales — beverage
• Sales — alcoholic beverages (if applicable — GST and licensing both differ)
• Sales — retail / merchandise (if applicable)
• Sales — catering (separate from dine-in because the cost structure is different)
• Service charge income (separate; this is not pure revenue if any portion is distributed to staff)
• Discounts & promotions (contra account, kept visible)
• Refunds & voids (contra account, by channel via tracking category)

Channel and outlet are then applied via tracking categories on every transaction. The owner can see:

• Total food revenue across the business
• Total food revenue at Outlet B
• Food revenue at Outlet B via dine-in vs delivery

All from the same underlying data, with no manual reclassification.

Why platform commissions get their own structure

Delivery platforms charge significant commissions (commonly quoted in the 20-35% range). Recording revenue net of commission hides the gross. Recording it gross with no contra hides the commission cost.

Our pattern:

• Record gross order value in the revenue account, tagged with the channel tracking category for the platform
• Record platform commission as a separate expense account (“Delivery platform commissions”), also tagged with the platform tracking category
• Refunds, promotional discounts (operator-absorbed vs platform-absorbed) each get clean treatment

The result: gross revenue per platform, commission as a percentage of platform revenue, net contribution per platform — all visible monthly.

The cost of goods sold side

The pattern most operators inherit: a single COGS account, all food and beverage purchases lumped in. The owner can't see food cost separately from beverage, and certainly can't see it by outlet.

Our COGS structure:

• COGS — food: fresh ingredients, grocery, dry goods, kitchen consumables that go directly into product
• COGS — beverage (non-alcoholic)
• COGS — alcoholic beverages (separate because margin and licensing differ)
• COGS — packaging: takeaway containers, cups, cutlery for delivery and takeaway
• Staff meals: contra account to COGS, adjusted monthly per a defined policy

Each one tagged by outlet. The owner can now ask “what is food cost as a percentage of food revenue at Outlet B this quarter” and the report runs immediately.

Labour and manpower

F&B labour cost is the second largest cost line for most operators and the most actionable on a weekly cycle. The structure has to be granular enough to make that actionable.

• Salaries — kitchen
• Salaries — front of house
• Salaries — management
• Salaries — HQ / overhead
• CPF — employer
• Service charge distributed to staff(separate; this is variable manpower cost)
• Casual / part-time wages
• Benefits, training, uniforms

With outlet tracking, the owner can see labour cost by outlet and by role. The 38%-of-revenue labour ratio at Outlet C — the kind of number that surfaces a rostering problem before it becomes a margin problem — is visible weekly.

Operating costs — outlet vs overhead

The single most useful split in the operating-cost section is outlet-controllable vs head-office overhead. Outlet-level P&L becomes meaningful only when outlet-controllable costs can be separated from overhead allocations.

Outlet-controllable typical lines:

• Rent — outlet
• Utilities — outlet
• Cleaning & maintenance — outlet
• Outlet supplies (non-COGS)
• Outlet repairs
• POS & payment processing fees per outlet

Head-office / overhead typical lines:

• HQ rent
• Software subscriptions (Xero, POS, payroll, marketing tools)
• HQ salaries
• Professional fees (accountant, secretary, legal)
• Marketing — group-wide
• Insurance

The structure lets the owner answer both “is Outlet B profitable on its own controllable costs?” and “what does overhead per outlet look like?”

GST tax codes

For GST-registered businesses, every account needs a default tax code. The default should reflect the typical treatment for that account; exceptions get coded transaction-by-transaction.

Typical defaults for an F&B operator:

• Revenue accounts → standard-rated (output)
• COGS food/beverage → standard-rated (input) where supplier is GST-registered
• Wages and CPF → out of scope
• Rent → standard-rated input (where landlord is GST-registered)
• Insurance → exempt or out of scope depending on type

Get the defaults right; the variance handling becomes the edge case, not the rule.

Tracking categories — the discipline

Tracking categories are the F&B operator's best friend in Xero. They make the chart of accounts work across outlets and channels without bloating the account list itself.

The discipline:

• Every transaction gets tagged across both tracking categories at posting — outlet and channel
• Auto-rules code as much of this as possible (transactions from Outlet A's POS feed default to Outlet A; transactions on the GrabFood payment terminal default to Delivery — GrabFood)
• Manual entries (a vendor invoice that covers multiple outlets) get split at posting

Skipping the tracking discipline is the single most common reason a chart of accounts “works” in theory but produces unusable reports in practice. The design is only as good as the consistency of the tagging.

What we'd do at incorporation

For a new F&B operator setting up Xero from day one, our recommended sequence:

1. Draft the chart of accounts on paper, against the expected revenue and cost lines for the operation
2. Define the tracking categories (outlet + channel) before any transactions hit Xero
3. Build account-level GST default codes
4. Set up bank feeds with reconciliation rules that auto-apply tracking categories
5. Train the bookkeeper and any operator-side touchpoint (manager submitting receipts, etc.) on the structure
6. Review the structure after the first month-end close; adjust if any account is consistently misused

The whole exercise is two to three days of work at setup. The alternative — retrofitting after a year of messy accounts — is two to three weeks of cleanup work.

What we'd change if we were inheriting one

For an inherited Xero with a poor chart of accounts, the play is different — see our piece on Xero cleanup for the full sequence. The headline: don't try to fix history. Design the new structure, apply it prospectively, and adjust historical periods only as far back as is needed for current obligations.

The chart of accounts is the foundation. Everything downstream — reports, dashboards, tax filings, owner decisions — gets easier when the foundation is right and harder when it isn't. Worth the two days at setup.

— The Acuitas team