Key takeaways
- SFA says licensed food businesses may only sell or supply food prepared on their licensed premises or obtained from other licensed food businesses. Check every supplier’s licence before the first order.
- Compare quotes on the same specification, pack size and delivery terms, then weigh credit terms, minimum orders and delivery days alongside price.
- Set a par level for each item: usage per day × days until the next delivery + safety stock. Order the gap between par and what is on the shelf.
- Receive every delivery against the order: temperature, quantity, quality and the invoice. Get a credit note for anything short or rejected before the driver leaves.
- Track price changes and score suppliers each quarter, so you consolidate on evidence rather than habit.
Food cost is decided long before a dish is plated. It is decided when you choose who to buy from, how much you order, what you accept at the back door and whether anyone notices when a price creeps up. Many small F&B businesses in Singapore run purchasing through a chef’s WhatsApp chats and a pile of delivery orders. That works until the chef is on leave, a supplier quietly short-ships, or the month-end statement does not match what arrived.
This guide sets out a simple supplier management system for a restaurant, café or small group: choosing suppliers, comparing quotes, understanding terms, setting par levels, placing orders, receiving, handling shortages, tracking prices and scoring suppliers. It links to our guides on food cost, recipe costing and stock takes, which cover the other half of the cost picture.
Choosing suppliers: start with licensed sources
The first check is legal, not commercial. SFA’s page on businesses that need a licence or permit for food retail says: “Licensed food businesses may only sell or supply food that is prepared on their licensed premises or obtained from other licensed food businesses.” In practice, that rules out buying stock for resale from an unlicensed home kitchen or an informal contact, however good the price.
For imported ingredients, the importer must hold the right SFA licence or registration and a permit for each consignment. Most restaurants are better off buying from licensed importers and distributors than importing themselves. For where Singapore food imports come from, see official food supply statistics. Our SFA food import licence guide explains what importing involves if you ever consider it.
Beyond the licence, look for:
- Product specification. Can the supplier give a written spec for each item: cut, size, grade, origin, pack size and shelf life?
- Cold chain. Do chilled and frozen goods arrive in refrigerated vehicles, and will the driver wait while you probe temperatures?
- Delivery reliability. Ask how they handle stock-outs. Do they call before substituting, or just send something else?
- Paperwork. Clear delivery orders, tax invoices and monthly statements save hours at month end.
- A named contact. A salesperson or account manager who answers when there is a problem is worth more than a slightly lower price.
Keep at least two approved suppliers for your critical items, such as your main protein, rice or noodles, and cooking oil. You do not need to split orders between them, but you need someone to call when your main supplier cannot deliver.
Comparing quotes like for like
Supplier price lists are hard to compare because items are rarely identical. One quotes chicken thigh per kilogram, boneless and skinless; another quotes per carton with skin on. Before you compare, fix the specification and convert every quote to the same unit.
- Write the spec for each item you buy regularly: product, grade, size, pack, origin if it matters, and whether it is fresh, chilled or frozen.
- Ask for quotes on that spec for your realistic weekly volume, not a one-off order.
- Convert to a usable unit. Price per usable kilogram matters more than price per carton. If one product has more trim or glaze, account for the yield. Our recipe costing template shows how to apply yield.
- Add the hidden costs: delivery charges, small-order surcharges, and any charge for returning crates or pallets.
- Test the product. Cook it the way your kitchen does. A cheaper item that shrinks more or needs extra prep can cost more per plate.
Record the quotes in a simple sheet with the date, so you have a baseline for tracking price changes later.
Credit terms, minimum orders and delivery days
Price is only one part of the deal. Three other terms shape your cash flow and your kitchen routine.
Credit terms
Many trade suppliers offer credit terms once you have an account with them. “30 days” usually means payment is due 30 days after the invoice date; “60 days” gives you twice as long. Some suppliers count from the end of the month in which the invoice is dated, which gives you longer again. New accounts may be asked to pay on delivery or in advance until they have a trading history. Read the exact wording on the account form and the invoice, because “30 days” and “30 days from end of month” can differ by weeks.
Longer terms help cash flow, because you can sell the food before you pay for it. But do not let terms hide a higher price, and do not stretch payments beyond what you agreed, because suppliers remember who pays late when stock is short. Our cash flow guide covers how supplier terms fit into your weekly cash plan.
Minimum order values
Suppliers often set a minimum order value or charge for deliveries below it. Minimums push you to order more than you need, which ties up cash and chiller space and raises waste. If a supplier’s minimum is too high for your volume, ask whether a lower minimum is possible on fewer delivery days, or move low-volume items to a supplier who already delivers to you.
Delivery days and cut-off times
Write down each supplier’s delivery days, delivery window and order cut-off time. These decide your par levels, because the gap between deliveries is how long your stock has to last. A supplier that delivers six days a week lets you hold less stock than one that delivers twice a week. Ask for a delivery window that avoids your lunch service, when nobody has time to receive properly.
Par levels and order guides
A par level is the amount of an item you want on hand right after a delivery arrives. Ordering to par replaces guesswork with a simple calculation that anyone on the team can follow.
Par level = average usage per day × days until the next delivery + safety stock
Order quantity = par level − stock on hand (rounded up to the supplier’s pack size)
Safety stock covers a busier-than-usual day or a late delivery. Keep it small for perishables with a short shelf life, and larger for dry goods that keep.
Worked example (hypothetical)
This example uses made-up numbers for illustration. A café uses an average of 12 kg of chicken thigh a day. Its supplier delivers on Monday, Wednesday and Friday, and the head chef wants a safety stock of 6 kg.
| Delivery | Days until next delivery | Par level | On hand before delivery | Order (2 kg packs) |
|---|---|---|---|---|
| Monday | 2 (to Wednesday) | 12 × 2 + 6 = 30 kg | 9 kg | 21 kg, rounded up to 22 kg |
| Wednesday | 2 (to Friday) | 12 × 2 + 6 = 30 kg | 7 kg | 23 kg, rounded up to 24 kg |
| Friday | 3 (to Monday) | 12 × 3 + 6 = 42 kg | 8 kg | 34 kg |
Notice that the Friday par is higher because the weekend gap is longer. If weekend sales are heavier than weekdays, use weekend usage for that calculation, not the weekly average.
The order guide
An order guide lists every item you buy from each supplier, in the order it sits on your shelves, with the spec, pack size, unit price, par for each delivery day and a column for the count. The person ordering walks the store, counts, subtracts from par and places the order. Review pars monthly, and whenever the menu or sales volume changes. If you find the same item in the bin every week, its par is too high. Our stock take guide covers counting accurately.
Purchase orders: put every order in writing
A purchase order (PO) is your written record of what you ordered, from whom, at what price and for which delivery date. It does not need to be elaborate. What matters is that every order exists somewhere other than one person’s phone.
- Who can order. Name the people allowed to place orders with each supplier, and tell the supplier. This stops duplicate orders and orders placed by staff who have left.
- What the PO shows. Supplier, date, delivery date, item, spec, quantity, unit and agreed price.
- Where it lives. A shared sheet, your accounting system or purchasing software. The receiver needs to see it at the back door.
- Approval limits. For a group, set a value above which the outlet manager or head office approves. Our guide to PO approvals and receiving covers setting these limits.
The PO is what makes receiving and invoice checking possible. Without it, the receiver can only check the delivery against the supplier’s own delivery order, which tells you what they sent, not what you asked for. Our cash control guide explains why separating ordering, receiving and paying also reduces the risk of fraud.
Receiving checklist: temperature, quantity and invoice
Receiving is where most supplier losses happen, because a rushed check at 11.30am lets short weights, wrong items and warm chilled goods into your kitchen. Write a receiving procedure and train everyone who might sign for a delivery. Our restaurant SOP template includes a full worked SOP for receiving chilled deliveries.
Temperature and condition
SFA’s December 2024 advisory to food establishments says ready-to-eat food should not be kept in the temperature danger zone of 5°C to 60°C for more than 4 hours, and that cooked and ready-to-eat food should be stored above raw food. Build your receiving standard around that:
- Probe chilled items with a clean, sanitised thermometer. A sensible house rule is to accept chilled goods only below 5°C and to reject anything at 5°C or above.
- Check that frozen goods are frozen solid, with no signs of thawing and refreezing such as ice crystals inside the pack or stuck-together portions.
- Check packaging is intact and use-by dates leave you enough time to use the stock.
- Put chilled and frozen goods away first, before you count dry goods.
Confirm your limits with your food hygiene officer and each supplier’s specifications, and record every reading in a receiving log.
Quantity and quality
- Weigh items sold by weight on your own scale. Do not rely on the label alone.
- Count cartons and check the contents of at least a sample.
- Compare every line with your PO: right item, right spec, right quantity.
- Look at quality: colour, smell, firmness, size. Reject what does not meet the spec.
Invoice match
Match the delivery order or invoice to the PO and to what actually arrived. Check unit prices against the agreed price, not just quantities. Note any differences on the delivery order before signing, and have the driver countersign. This three-way match (PO, delivery and invoice) is the simplest control you can put on purchasing. Our guide to receiving deliveries covers the other checks at the back door.
Shortages, rejections and credit notes
Something will go wrong with deliveries every week: a short-shipped item, a substitute you did not agree to, a warm carton, a damaged tin. Handle each one the same way.
- Record it on the spot. Write the problem on the delivery order and get the driver to sign it. Take a photo of damaged or warm goods, with the thermometer reading visible.
- Send rejected goods back with the driver where possible, so there is no argument later about what happened to them.
- Tell the supplier the same day by message or email, with the photo and PO number.
- Ask for a credit note for short or rejected items, and log it against the invoice.
- Check the statement. At month end, make sure every credit note appears on the supplier’s statement before you pay.
Unclaimed credits are pure loss. A short list of open credits, reviewed weekly, stops them slipping through. If a supplier repeatedly short-ships the same item, that belongs on their scorecard.
Tracking prices and scoring suppliers
Prices rarely jump in one obvious step. They drift up a few cents on a few lines, often without notice. Over a year, that drift can wipe out the margin you built into your menu prices.
- Keep a price history for your top 20 to 30 items by spend. Each week, compare invoiced prices with the last price and the agreed price.
- Ask for notice. Agree with each supplier that price changes are notified in writing before they take effect.
- Update recipe costs. When a key ingredient changes price, update it in your recipe costing so you can see the new cost of each affected dish. Our menu pricing guide covers when to reprice.
- Re-quote once or twice a year for your biggest lines, using the same spec, so you know whether your current price is still competitive.
A supplier scorecard
A scorecard turns impressions into evidence. Score each main supplier once a quarter on the same criteria, using your receiving log, credit note list and price history. A simple 1 to 5 scale is enough.
| Criterion | What to measure | Where the data comes from |
|---|---|---|
| Price | Price against quotes and against last quarter; unannounced increases | Invoices, price history |
| Accuracy | Deliveries that matched the PO in full | PO and receiving log |
| On time | Deliveries inside the agreed window | Receiving log |
| Quality and temperature | Rejections for quality, spec or temperature | Receiving log, photos |
| Credit notes | How quickly credits are issued and applied | Credit note list, statements |
| Service | Response to problems, notice of stock-outs and price changes | Messages and emails |
| Terms | Credit terms, minimum order, delivery days | Account agreement |
Share the scorecard with the supplier. Most good suppliers want to know where they are slipping, and a documented record gives you a stronger position when you negotiate.
Consolidating suppliers and e-invoicing
Many outlets end up with more suppliers than they need: one for each chef’s favourite item, plus a few from past promotions. Every extra supplier means another delivery to receive, another account, another statement and another minimum order. Consolidating can cut admin and may give you better pricing on higher volumes. The trade-off is dependence, so keep a backup for critical items. Use your scorecard to decide who stays.
Paperwork is the other half. InvoiceNow, Singapore’s Peppol-based e-invoicing network, lets suppliers send structured invoices straight into your accounting system instead of paper or PDF. IRAS is phasing in a requirement for GST-registered businesses to submit invoice data through InvoiceNow-Ready Solutions. Our InvoiceNow guide explains the dates and what it means for F&B. When you choose or review suppliers, ask whether they can send invoices through InvoiceNow.
Where your POS fits into purchasing
Your POS knows what you sold, and that is the starting point for knowing what you should have used. ChaChaCha’s inventory features include recipe-level stock deduction, so each sale deducts ingredients according to the dish’s recipe, and recipe costing per menu item. That gives you a theoretical usage figure for each ingredient to set par levels from real sales, and a way to compare what you should have used with what your stock take shows. Recipe costing shows how a supplier price change feeds through to each dish.
Reports show sales by item and by period, and sales data can flow to Xero through the accounting integration, where supplier bills are usually managed. For purchase orders, receiving against orders, stock transfers between outlets and other purchasing workflows, ask us to confirm what fits your setup, and get the answer in writing from every vendor you are comparing, including us. Our comparison of restaurant inventory software in Singapore covers other options. If you are budgeting for new systems, see our guide to grant support for POS systems, or talk to us about your outlet.
