Plate IQ May 28, 2019
How to Automate Your Accounts Payable Process
With the advent of self-pay kiosks, kitchen display systems and even Flippy, the automated hamburger-flipping robot, it’s clear that automation has arrived to the restaurant industry. And timing couldn’t be better – with intense competition and continued margin pressure, not to mention an increase of nearly 10% in actual paper invoices being received, every operator needs to find cost efficiencies. Automation technology can be one restaurant solution worth considering, especially when it comes to your accounts payable process.
In most cases, you receive your goods, you verify that the items you’re receiving match the details on the invoice, you note the due date, and you file them away to be entered by a manager or accountant into your accounts payable software. Automation barely comes to mind when you’re first opening a restaurant. So, that begs the question: What is it and how can it help?
It’s easy to recommend automation, of course. But for many, the topic sounds scary – even threatening, perhaps. Are the robots coming to replace humans? Automation seems so expensive, how do I know where to make my investment? How can I avoid the headaches of my last tech deployment?
It doesn’t have to be this way.
Who likes to take time out of their day to stare into an endless void of paper? I’ll go out on a limb and suggest the answer is basically no one. If you count yourself in the camp of those overwhelmed by the sheer number of invoices and restaurant solutions claiming to solve these problems– and honestly, who wouldn’t considering the explosive number of offerings launched in recent years? – you should start with proven technology with demonstrable ROI.
Accounts Payable Software — the Benefits
For restaurant accounting, accounts payable automation software can help you handle one of the most dreaded tasks – invoice input and expense management – to improve your overall accounts payable process and food costing.
Currently, the average restaurant receives approximately 160 invoices per month, which the manager needs to input, pay, track and analyze over time in order to properly manage the business. And with food costs accounting for 33% of the average restaurant’s overhead, better accounts payable management is a practice that can transform the performance of your restaurant.
On paper, this problem may seem easy to solve. Managers simply need to keep better track of invoices, right? In the field, however, the problem is much more complex. Managers, pressed for time and either preparing or serving live guests, have little time for proper invoice input, let alone more sophisticated forms of performance management, such as food cost analysis.
Compounding the problem is the fact that most managers must manually input invoice information into their restaurant accounting software, which is a time-consuming and tedious task. In addition to properly recording each line item, the manager must make note of any substitutions or credits, delivery to delivery, and ideally verify that they have been properly charged. Making matters worse, many times the invoice management processes is still done with paper and pencil, creating even more room for error.
Accounts payable automation solutions are specifically designed to address this issue, to help restaurants optimize their operations, unlock actionable expense data and reduce costs. Businesses that are utilizing automation and cloud based accounting instead of locking their managers away in an office for hours at a time are seeing a decrease in labor costs of up to 50%.
Platforms such as Plate IQ harness the power of AI, machine learning and optical character recognition to give restaurants a full suite of tool to automate their accounts payable process, including invoice processing, vendor payments, invoice reconciliation, and cost analysis.
More specifically, accounts payable software can:
-Automatically extract, categorize and summarize invoice data, providing more detailed and accurate insights into your expenses, and allowing for a real-time tracking of spending by category or General Ledger (GL) code.
-Eliminate the risk of manual-entry errors and reduce the amount of time managers must spend on administrative tasks, as opposed to being with the customers that keep your restaurant running.
-Provide unparalleled line-of-sight into unit expenditures and profitability, including real-time cost-of-goods sold reporting. Currently, most restaurants, including some of the country’s very largest chains, are forced to wait for monthly P&L reports to track their expense performance. AP automation software eliminates this lag.
-Retain records without filing by storing all transaction details, including amount, pack size, and invoice numbers, securely in the cloud.
Even if you don’t intend to immediately conduct deep-dive food costing, the simple benefit of eliminating paper invoice management is significant. Some of our clients have reported time savings of 3 weeks when it comes to viewing their P&L, and 4 full days at the end of the quarter when closing out their books.
This gives time back to staff helps ensure the kitchen is running smoothly and guests are satisfied. What’s more, having fewer “to-dos” on their list can result in less stress for employees, and thus a more comfortable and friendly staff. When staff is happy, it tends to lead to improved guest experience, which is something every restaurant needs.
Choosing Accounts Payable Software
When selecting a platform to invest in, there are at least three important questions you should ask:
- Will the platform integrate?
It’s important that your accounts payable automation software integrates with QuickBooks, Square, Fintech and any other of the many broader restaurant accounting solutions you may use, like Compeat or Microsoft Great Plains. If the different applications and modules don’t integrate properly, your whole system could become inoperable. Carefully analyze potential solutions, ask the vendor if they have experienced any trouble integrating with the systems you currently use, and make sure to see full demos of software to ensure proper integration.
- Is the platform flexible?
As your business hopefully grows over time, your operations will become more complex and your technology needs will evolve. While it’s important not to over-invest, it’s critical to think about your decision through a broader lens, and make sure that you’re choosing a provider committed to live customer support, regular updates and best-in-class integrations.
- Can it read ALL of my invoices?
While the majority of invoices come in the form of standard text, approximately 30% of paper invoices received are either entirely hand-written or involve hand-written adjustments in the form of returns or credits. You’ll need to make sure that your solution has the capability to understand these adjustments so that you don’t have to worry about your books getting off balance.
- Is the platform easy to learn and use?
Busy restaurants don’t have much time to dedicate to training, and if the platform isn’t easy to use, it will be easy for staff to dismiss. Demo the platform thoroughly to ensure it will be simple for unit-level management to use during busy dining hours. After all, if your accounts payable solution isn’t making life easier, what’s the point?
While restaurant automation can seem like an overwhelming topic, the field of options quickly narrows when searching by solutions with proven ROI. When evaluating your ever-growing automation choices, it would be wise to consider asking Plate IQ for a demo as your first step…at least before investing in a hamburger-flipping robot.