Why your restaurant is missing out if you’re not using accounts payable automation
6 MINUTE READ
Delaget and RASI became API partners and started their mission together in 2019 to increase operational value and efficiency to growth-focused restaurateurs looking to streamline their process and scale by insights. The duos’ automation of accounts payable data has resulted in both time and financial gains for operators across the country.
It’s no secret that restaurants run on thin margins, little time, and countless activities in daily operations. If these restaurants utilize outdated processes like manual data entry and paper systems, their day-to-day lives are made even more difficult. On the other hand, savvy restaurant operators have learned that technology integration and point solutions can be their best business partners. Many modern operators heavily rely on integrated tech for an increasingly large portion of their business practices; quite a distinction from the industry even 15 years ago. Automation is the present, it’s the future, and it’s taking center stage in restaurants’ abilities to minimize costs and increase operational efficiencies.
Accounts payable (AP) automation is quickly becoming a frontrunner within these digital processes that restaurants are now adopting. This is due mainly to the fact that AP is a significant portion of the business that’s prone to human error and incredibly time-consuming with supplier invoices and vendor payments. Most restaurants have a multitude of vendors they work with, meaning they also have a wealth of contracts, different pay schedules, numerous invoices, and countless statement reconciliations. Operators simply cannot afford to lag behind and keep their accounts payable in the prehistoric paper age.
Accounts payable automation software saves operators time by replacing tedious manual processes with invoice scanning and automatic data entry, speeds up the approval and payment processes, and increases error detection and fraud protection. Want to learn the accounts payable automation best practices that will create a digital path of success for your restaurant? Keep reading!
Fundamental Roles and Tasks Within Accounts Payable
In most restaurants, a few key team members typically handle accounts payable management, and there are several processes involved, including:
- Receiving supplier invoices
- Verifying invoice accuracy against inventory
- Approving invoices
- Sending payments to suppliers
- Reconciling statements
Each of these steps relies significantly on your team members' focus, time, and accuracy, and controlling labor dollars is already a significant operational hurdle these days. Streamlining and automating that process ensures your labor dollars are better spent elsewhere. A fully digitized accounts payable solution frees up your team for revenue-producing activities, as it dramatically reduces the manual procedures involved.
Additionally, an accounts payable automation solution establishes a complete digital chain of custody. This begins from invoice reception to review and approval, down to payment and reconciliation. Even more beneficial is that multiple team members can access invoice information, request approvals, and view digitally stored drill-down information to understand where in the process the invoice sits. Specified user access becomes highly valuable when vendors call for payment and can be helped immediately. Empowering your team with accurate, readily available information sets the proper expectation for the vendor, sustaining a solid partnership, and it also sets your team up for success.
Considerations for Implementing Accounts Payable Automation Solutions
First and foremost, an operator must know exactly what their current accounts payable process looks like before they can implement a new solution. It’s vital to understand how many team members are involved in the processing, what their roles consist of, where the shortcomings are, where the opportunities lie, and what goals you have for automated accounts payable software. Operators can easily do this through simple communication with their management team, and the use of data analytics within their present practices. Look for trends and comparisons within payments, invoice entry, and more. Using data establishes a base case to make an educated decision wherein a new digital solution can increase efficiencies. A few important questions to consider are the following:
- Who handles invoice data entry?
- How long does invoice data entry take?
- How long does invoice review take?
- How many people touch an invoice through the review process?
- How often do exceptions occur?
- How long does exception resolution take?
- How long does it take for the vendor to get paid?
- How often do statement reconciliations occur?
- How accurate are payments and reconciliations?
After reviewing your AP process thoroughly, focus on the most manual parts of the process that are prone to inaccuracies and monopolize your team members’ time – this is costing you money. Those are the areas where you have the most to gain from digital processes, so it’s crucial to ensure your AP software solution alleviates those cumbersome and costly procedures.
3 Areas in Your AP Process that Automation Will Improve Manual Invoice Data Entry
Invoices come in a few different forms. Vendors typically send paper or PDF invoices to the restaurants, where many operators are still manually entering the data into their accounting system. These manual entries include various line items of data such as an address, invoice amount, items received, total due, and invoice due date. It’s all too simple for a manager to transpose numbers or flub dates after repeatedly performing this task with countless invoices in the batch – not to mention it’s an incredibly inefficient use of the manager’s valuable time. For an industry with narrow margins, manual AP data entry poses unnecessary risks to the business. An AP software solution will ditch the paper to scan invoice data, track, and categorize your expenses, thus significantly reducing the manual work involved. Moreover, digitized AP software can handle stacks of invoice data in a single batch upload with ease.
GL coding is yet another laborious task within the accounts payable process. The larger your restaurant, the more comprehensive the range of your GL codes. Likewise, the more invoices you receive, the more GL coding your team members are tasked with. It’s a vicious cycle that ultimately takes away from revenue-producing activities and opens the door for significant errors. Instead, digital AP software can automate this coding through machine learning. Digitizing invoices automates the GL coding process by extracting the data from each invoice and automatically classing it to each necessary GL. Additionally, a good, automated accounts payable solution will accurately store and recognize GL information to quickly code future invoices – this helps to make the review and approval process quicker and easier for your managers.
An overlooked but critical part of a strong AP process is a solid relationship with your vendors. Creating a deep level of engagement with your vendors will assist you in the long run with better communication for sub-items, scheduling (product and payment), and more. This, however, isn’t possible if you’re consistently paying your vendors late due to cash flow issues. By default, most suppliers set their preferred method of payments, and the restaurants comply, equating to disparate payment methods across the board. The oldest method of payment? Cutting and mailing checks. An AP automation solution reduces the manual process to scanning and approving invoices, ultimately standardizing digital processes and online banking in which operators can schedule payments to optimize their cash flow. Through the adoption of more modern processes, you can increase your vendor relationships because you’ll be eliminating those pesky late payments – a win, win for everyone!
The Overall Benefits of Accounts Payable Automation
A fully digitized AP software solution will save time previously consumed by tedious manual data entry and verification tasks while simultaneously eliminating human errors (your restaurant managers will thank you for taking this work off their plate). Further, the software will establish a straightforward, user-friendly approval process, ensuring that invoices are routed to the right people and processed in a timely fashion. Lastly, the AP solution will standardize your payment process, reliably getting payments to vendors on time, and strengthening your reputation with critical suppliers. In sum, AP software improves your internal processes, reduces opportunities for fraud, saves valuable staff time, and enhances your vendor relationships.
Selecting the Right Accounts Payable Automation Software
It’s vital to have AP software that caters to your restaurant’s needs, understands your operational processes, and, most importantly, integrates with your accounting and POS systems. Most generic accounts payable software solutions fall short of this measure. Without a steadfast integration, the automation is void. This is where partnerships like RASI + Delaget come into play. RASI’s restaurant-specific accounting expertise and software paired with Delaget’s franchise-specific expertise and custom data solutions make it easy for you and your team to find, understand, and act on key business intelligence without worrying about technology issues. This includes a fully digital AP software solution that’s uniquely built for the restaurant industry.
This software keeps things simple in 3 unique ways:
- Consolidates and manages all your data, integrating with any technology you have now or in the future – Eliminates manual processes with fully digitized AP management through machine learning GL, itemized invoice scanning and reconciliation, and digital storage; meaning, no more paper processing, late payments, or wasted time.
- Provides specific recommendations on how to improve restaurant operations to maximize revenue and margins – Easily tracks product price trending, manufacture deviations, AP payments status and trends, and contract compliance for increased supplier and AP management tactics.
- Tuned for the nuances and demands of the restaurant industry – Enables operators to find success through the analysis of industry data with valuable comparisons for individual brands, including exception-based reporting on item level details by synchronizing your inventory database.