DSP Reconciliation and Recovery: Achieving optimal third-party delivery health
While delivery is not a new concept, the delivery channel itself is still new enough that most operators, even the most technologically savvy, have not mastered their processes.
As you know well, your restaurant(s) currently use many systems (in each location) to operate — and most of those systems also have their own portals to get data. To further complicate things, each 3rd party delivery service provider (DSP - i.e. UberEATS, GrubHub, DoorDash) has its unique portals to log into and export the delivery data needed to reconcile, balance books, and recover losses. This, in turn, makes it exceedingly difficult to get a complete view of your financial and operational metrics.
Why financial and operational health?
At Delaget, we believe that it’s important to diagnose not only the symptoms of an issue (delivery losses) but the underlying cause (operational delivery hiccups).
For a restaurant to achieve optimal financial and operational health, one must:
Have all your books balanced and tied out without room for human error
Optimize your time as a business, instead of spending hours in DSP portals, manually merging spreadsheets, and manually recovering delivery losses with DSPs, because time is money
Identify a process to recover losses and pad your bottom line
Maximize the profitability of third-party delivery to ensure channel success
In this article, we will outline the three steps an operator can take to get operationally and financially ‘healthy’:
Third-party Delivery Health 101: The Road to Operational and Financial Wellness
Step 1: Reconciliation
The first step to a healthy delivery operation is knowing the causes of delivery loss and how to prevent them.
Why is it necessary to reconcile?
Reconciliation is key to knowing the breakdown of these costs and tracking the impact on your bottom line. Additionally, if you do not properly reconcile, you can expect to:
Overpay fees and taxes
Be overstating or understating sales, making benchmarking and predictive sales goals a challenge, as next year’s LY data will be inaccurate
Lack of visibility into what happened, and why it happened – keeping you from improving processes
To reconcile, you can do so manually, or you can use the third-party tool Delaget Delivery.
To reconcile manually, you must first export orders daily, one location at a time, and then run POS (Point of Sale) delivery reports for net sales amounts. This must be done for each DSP (Delivery Service Provider) that you use. (Example: You use DoorDash, GrubHub, and UberEATS – so you must do the export for all locations in all three portals). Most accountants also do this process weekly, exporting each location’s weekly financial reports, running POS delivery reports for net sales amounts, and then repeating steps 1-2 for each DSP.
Next, you must run deposit reports from all banks. The next step is reconciling with the POS and tying out all weeks in spreadsheets. (Get a detailed guide on how to reconcile at our resource center).
Save man hours and end human error with Automated Reconciliation
Not only does the manual process take hours (36+ each month!), but it also allows for human error. To achieve peak delivery health, consider automating the reconciliation process.
With Delaget Delivery, you receive a daily and weekly report, and data flows from all your DSPs (Delivery Service Providers) straight into your Delaget dashboard, enabling you to get all the reconciliation and tie-out data with the push of a button.
Step 2: Recovery
Congrats! You’ve reconciled. Now what?
Step two in getting healthy is recovering those losses, which can be done by disputing the discrepancies directly with the DSPs.
Barriers and blockers
The process of recovery can be highly manual. You must log in to each DSP portal and scroll through the orders, finding any marked “canceled not paid” or “missing item”. Next, you must write down the restaurant number, Order ID, Order Date, Subtotal, Customer name, and Amount reimbursed for each one.
The biggest blocker to recovery is time (labor). This takes accounting and LP teams hours, and most DSPs have a limit to the number of order disputes per call.
Automation is here
The good news is that Delaget +Recovery will dispute on your behalf and recover lost revenue, and you can focus your time and energy on tasks that will continue to move your business forward.
This recovery service is fully automated, allowing for quick, accurate reporting and retrieval of revenue losses. With +Recovery, you can maximize your delivery profitability and get a lift in total sales without lifting a finger.
Gone are the days of blindly accepting the data from DSPs and missing out on that “money left on the table”. Now you’ve got more time and more money, and you’re set to drive action with reports provided by Delaget Delivery +Recovery.
Step 3: Use data to drive action
Whether you continue manually or take advantage of smart technology to reconcile and recover, you’re now sitting on a boatload of data that can help you improve overall delivery operations.
Take your manually consolidated masterpieces or the reports generated automatically by Delaget Delivery +Recovery, and examine the following:
Meta loss trends: Look at the data and analyze it critically: Do losses occur during specific times of the day or days of the week? Are there certain locations that report consistent missing items? If you’re spotting trends, that’s an easy place to start. For example, if one specific time of the day sees a spike in delivery hiccups that cause loss, go help in-store during that time and see what’s causing the issues – and adjust, as necessary.
Micro loss trends: Are there ‘repeat offender’ drivers that continue to cancel on you, before or after the food is made? If so, you can report them to the DSP or even block them from servicing your locations to stamp out the loss at the source.
Find the units that need your attention vs. those that don’t:The data might point to units that are more prone to delivery losses—Another great clue. Adjust staffing, a delivery protocol, and the number of DSPs running out of that unit, if possible, to remedy the issues at hand.
Analyze traffic patterns:Chances are you’re seeing a bump in delivery orders at specific times of the day. If you can, add staffing during these bumps, and help your team operations at these times of the day to help smooth things out.
Any way you slice it, a good data set is worth its weight in gold! You can’t afford to push it aside; instead, dive in and use it to inform operational decisions and improve your processes.
With three simple steps and smart technology, you can get to a state of complete financial and operational delivery wellness. Simply reconcile, recover, and use the data to perfect your business—and reap the rewards of maximized payouts, increased delivery profitability, and peace of mind knowing you’re not overstating fees and taxes.