5 Benefits of Accounts Payable Automation for Restaurants
For decades, industries – from retail to manufacturing – have enjoyed the benefits of accounts payable (AP) automation technology. Yet, only recently has accounts payable automation for restaurants become a featured item on the menu of restaurant technology options. But why?
I would argue it’s not due to the common perception that the restaurant industry consists primarily of tech-averse luddites who shudder at the idea of introducing change of any kind – let alone one that hands over the keys to the checkbook.
Change can be hard, no doubt. I mean…let’s be serious – there’s a-really only one a-way to properly prepare a tortellino – as an example – for you Chef’s Table fans. So, the way we’ve always done it matters in the restaurant industry. We get that – we really do.
We also understand why restaurants have been cautious of introducing new technologies into their operations. Because not all technology is restaurant technology!
Not all technology is restaurant technology!
Technologies – such as Optical Character Recognition (OCR), smart process automation, API integrations – have been around (and consistently improved) for decades. Yet, only until recently have they been applied to specifically meet the needs of the restaurant operators. While the restaurant industry is an industry that values tradition, it also has unique requirements that generic automation solutions cannot address.
Let us look no further than the example that is Account Payable (AP) automation technology.
What is Accounts Payable Automation?
To answer this question, I did what most people do…I googled “What is AP Automation?” and ended up at Wikipedia. Here’s the definition of account payable automation, according to Wikipedia…
Accounts payable automation, or AP automation, is a term used to describe the ongoing effort of many companies to streamline the business process of their accounts payable departments. The accounts payable department’s main responsibility is to process and review transactions between the company and its suppliers. Processing an invoice includes recording important data from the invoice and inputting it into the company’s financial, or bookkeeping, system. After this is accomplished, the invoices must go through the company’s respective business process in order to be paid.
What is Accounts Payable Automation for Restaurants?
How does that translate for the restaurant industry? Accounts payable automation for restaurants enables restaurant operators to digitize invoices, automatically extract line-item details from those invoices, integrate the data with accounting, and better manage costs using robust cost management reports and dashboards. Simply email, scan or snap a picture of vendor invoices and let the system do the heavy lifting.
But…what if there are hundreds of transactions every month, or even every week!? What if each vendor invoice looks a little different? And, what about vendor credits or local grocery receipts? What if we write on the invoice?
Or, what about pack sizes, catch weights and units-of-measure (UOM)? What if prices are always changing and vendors make mistakes that go unnoticed? What if we don’t even have an accounts payable department?!?
Perhaps you’ve gotten past those questions and have given the technology a try, but you’ve been burned by choosing the wrong platform or a provider. What happens when your AP Automation provider overlooks what makes your business unique? Or, doesn’t take your issues or the integrity of your data seriously? Does that mean the industry should write off AP Automation technology as a whole? Absolutely not!
Accounts Payable Automation for Restaurants or Automated Everything for Everyone?
The times seem to be a’changing. The perception, the attitude, and the investment in restaurant technology is shifting. Restaurant operators are becoming more accepting to systems that can make their lives easier.
And why wouldn’t they?!? We’re automating everything!
A quick return trip to everyone’s favorite search engine provides a snapshot into society’s effort-at-large to automate anything from our homes to our jobs to our lives!
But, before you go ahead and start automating your entire restaurant – from the kitchen, a la Spyce, to robot servers – you should first understand and evaluate the benefits.
5 Benefits of Accounts Payable Automation for Restaurants
Below are 5 benefits that should make the decision to pursue accounts payable automation for your restaurant…automatic!
1. Time Savings
How many restaurant operators do you know that have too much time on their hands? Easy answer: None.
By automating accounts payable in your restaurant, you get a 2-for-1 deal when it comes to the benefit of time. First, you’ll save yourself and your team hours every week, or even every day (!), by digitizing your invoices and avoiding the manual, mundane tasks of data entry, line-by-line GL coding, and paper pushing. Second, these time-consuming tasks will be completed more quickly…and therefore, sooner – giving you access to financial reporting before the end of the month when it’s too late.
We all know that time is money. So, whether you work with an outsourced bookkeeper or manage accounting in-house, it’s costing you at least $15/hr for someone to key, code, and tediously review vendor invoices. You’re not only wasting someone’s valuable time…you’re wasting money.
Time is a limited resource. So, when we’re saving time, we’re not just saving money. We’re also gaining time. And, you can use that time in much better ways, such as keeping your vendors honest and monitoring your food cost trends and profitability. (See #4 & #5). Mind blown!
This is valuable time that we can surely use better than sitting in front of a computer screen getting carpal tunnel syndrome. I mean, making tortellini never gave anyone carpal tunnel syndrome!
2. Line-item Accuracy
I’m going to go out on a limb and say that if your restaurant is doing manual data entry, there will be errors. There’s really no arguing against this one. And, I’m sure you’ve experienced it. When it cmoes to raeding this blgo psot, I can get away with making a few erorrs. You can probably still read it, and it’s no big deal, right? Sure!
True for a blog post, but what about your financial data?!? Still right? Wrung!
When you’re required to manually key hundreds, if not thousands, of line-items from stacks of vendor invoices…again, there will be data entry errors. You may see both intended and unintended “oopsies”. Nobody wants to deal with that. Instead, you want an accounts payable automation system that can automatically recognize and extract line-item level data from your invoices, bills, and receipts.
State-of-the-art accounts payable automation for restaurants should be able to accurately identify, extract and apply correct GL codes to individual invoice line-items automatically.
That’s right…imagine applying a GL code in the system once and never having to manually code that item again! GL codes are applied accurately any time the system recognizes that item going forward. To ensure this level of accuracy, your AP automation solution (or restaurant invoice processing solution) should leverage state-of-the-art OCR technology backed by teams of quality control operators to capture invoice line-items correctly and in a timely manner – every time, all the time. And, all of this data should flow right into your accounting, recipe and inventory management systems.
3. Process Controls & Oversight
Any solutions worth their salt who are claiming to be accounts payable automation for restaurants should offer robust and configurable workflow functionality allowing users to set their own criteria for approval routing and process control depending on the circumstances.
All businesses have their own way of doing things. Your team, your operations, and, ultimately, your business rules are unique. Accounts payable automation for restaurants allows you to automate your existing business workflows while maintaining, or even increasing, control over the process. The difference is that it is done digitally – which means less time, less effort, and less room for error.
Not only that, accounts payable automation software for restaurants makes it easy to reconcile periodic vendor statements, monitor contracted price variances, and prepare for audits.
4. Anytime, Anywhere Accessibility
Whether you’re managing one restaurant or multiple concepts across the country, you can’t spend 100% of your time at the restaurant or in the office. Not to mention, a paper invoice can only be in one place at a time. Accounts payable automation for restaurants allows you to access invoices and related documentation along with cost management reports and dashboards from anywhere on any device.
AP automation solutions also act as a digital document archive that offer robust search functionality. It’s like Google for your invoices! You can search by vendor, invoice number, date ranges, items and descriptions, and more. And, the best ones are cloud-based and mobile-friendly which means you can access them anytime and anywhere.
5. Deeper, Real-time Insights into Spend
With all of that extra time, accurate data, and anywhere accessibility to your AP process, what are you going to do with yourself?!? Find ways to further cut costs and improve your margins, of course!
Modern AP automation software built for the industry should go well beyond invoice processing. Instead, it should offer cost management features that include real-time price variance alerts, COGS reporting, and drillable, dynamic reports and dashboards.
Accounts payable automation for restaurants should be specifically designed to empower operators with greater insights into food costs in real-time. It should enable insights into how food costs are trending over time and what each store’s progress and performance toward budget goals are at any given time. Best of all, this information is easy to view, analyze, drill-down and share. Instead of relying on transcribing this data into Excel spreadsheets, it’s immediately available, dynamic and interactive.
Ready to see it for yourself?
If you’d like to learn more about accounts payable automation for restaurants can benefit your restaurant, we can help! Simply request a demo of xtraCHEF, and we’ll show you how easy it is to implement accounts payable automation at your restaurant and begin saving time and chopping food and labor costs right away.
Request a demo today!
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Don't hate it. Automate it.No one likes data entry or paper pushin'Code invoice line-items in our system once...and that's it. Configure rules to review only the invoices you want to see. Accurate data delivered to accounting & inventory.
Analyze costs. Visualize profits.Improved visibility boosts your bottom-lineReal-time visibility into food costs enable more informed purchase decisions, data-driven vendor negotiations & insight into how fluctuating prices impact the bottom line.
Connect the Kitchen & BookkeeperOn-demand access to invoice images & dataSecure, anywhere access and a powerful search engine make it easy to keep financial information flowing across the house, across locations or across the country.