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 restaurant AP automation become a featured item on the menu of restaurant technology options. But why?
We 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, and 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 industry 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 AP 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 Restaurant AP Automation?
How does automation translate for restaurant AP processes? 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 operators write on the invoice?
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 restaurants 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 restaurant 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?
Restaurant AP Automation or Everything Automated for Everyone?
The times seem to be 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?
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:
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 Restaurant AP Automation
Below are 5 benefits that should make the decision to pursue restaurant AP automation, automatic:
1. Time Savings
How many restaurant operators do you know that have too much time on their hands? The short answer: None.
By automating restaurant AP, 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, 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 restaurant food cost trends and profitability. (See #4 & #5).
2. Line-item Accuracy
If your restaurant is