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A Quick Guide to Accounts Payable Best Practices for Restaurants

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Zachary Fagenson
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Restaurants succeed thanks to the continuous accomplishment of countless tasks. While some seem small, like refilling guests’ drinks, and others large, such as ensuring the restaurant is adequately staffed, all of them must happen, without fail, regularly to ensure success.  

Nothing illustrates the busy flow of a restaurant like accounts payable. Restaurants are among the few businesses that purchase raw ingredients, turn them into a (delicious) product, and sell them directly to consumers. As such, restaurants are constantly buying items that require constant replenishment. So, while some businesses may purchase supplies that last weeks, restaurants get days if they’re lucky; having an efficient accounts payable process that ensures everything is priced correctly and securely and quickly paid is just as complicated and important as payroll.  

Businesses with inefficient AP processes can spend up to five times as much, per invoice, as businesses that have invested in a streamlined process, according to CFO magazine. While technology is integral to improving the process, it’s also a far different workflow.   

Accounts payable automation helps restaurants track accounts payable activity and is usually comprised of four steps:  

  1. The AP platform serves as a document repository for invoices and other paperwork as it comes into the restaurant. Physical invoices are scanned or photographed from mobile or desktop devices. Electronic invoices are emailed or fed directly to the platform.  
  2. All invoice data is converted into transactions and recorded within the system. AP automation technology automatically identifies, extracts, and applies the correct GL codes to individual line items.
  3. Once in the system, invoices are routed for approval. Operators can determine approval process routing through customized rules by location, vendor, category, or amount. All approval process workflows are accessible through a centralized email or dashboard, and an audit log tracks all decisions.  
  4. Payments are sent directly and securely through the platform when it’s time. AP automation should allow multiple payment methods, including check, ACH, virtual card, or other digital options, including those offering digital payment rebates.  

With a technology-driven process, restaurant companies can reap several benefits. The main thread underlying them all is that managers and accounting teams can spend more time improving business performance and results using AP automation data instead of being bogged down by a constantly growing stack of paperwork. The benefits include:  

Reduce Processing Time   

Manual AP processes require store-level managers to spend valuable time on data entry rather than on the floor. AP automation eliminates time-consuming, error-prone data entry, enabling managers to focus on customers and front-of-house operations.  

Eliminate Internal Errors   

Invoice mistakes squeeze your restaurant group’s margins. A single data entry error can result in hours spent tracking down the cause. Restaurant AP automation tools accurately and automatically identify, extract, and apply the correct GL codes to individual invoice line items.   

Improve Visibility 

Manual AP processing isn’t transparent and can lead to accounting and reporting anomalies that are difficult to fix. AP automation provides an audit trail showing every step of the process and allows you to correct problems quickly.   

Conduct Contract Price Verification   

AP automation technology captures more precise data and delivers detailed reporting to ensure contract price verification to hold vendors accountable 


Finally, and perhaps most importantly, a technology-driven AP process sets the groundwork to adequately prepare your restaurant group for growth.   

Without the right systems and processes, accounts payable can become even more costly and time-consuming as you grow larger. A restaurant-specific AP automation solution streamlines the accounts payable process, improving the process and generating increasing value no matter how many locations you open.