For restaurants, manually managing and issuing payments can be a resource-draining headache. When done correctly, things run as usual. Mistakes, however, can result in disastrous consequences. Whether it’s an enterprise restaurant operator with hundreds of locations paying thousands of invoices or a small business owner juggling dozens of payments alongside everything else that happens in each day, payments can be a distraction from what matters most: Improving operations and guests’ experiences. AP automation can help restaurants solve the puzzle.
A check for how much?
Despite the growing ubiquity of electronic payments, paper checks continue to account for a large share of payments, according to the Association for Financial Professionals’ (AFP) 2022 Payments Cost Benchmarking Survey. It can cost as much as $5 to issue, print, and send an individual check. For restaurants that operate on tight margins, the aggregate costs can quickly snowball. There’s a significant time cost as well. More than one-third of those surveyed said they spend more than four hours a week processing checks, while 41% said they spend between one and three hours. In an increasingly challenging operating environment, restaurants can’t afford expenses that do not contribute to the top or bottom lines.
Restaurant operators of all shapes and sizes need an automated, integrated technology solution that sits between their banks, vendors, and other partners to facilitate accounts payable automation. The system should include robust permission and audit features to control and review all payments. Doing so improves the accuracy of restaurant operators’ payments and saves the business money and time to improve operations and, ultimately, guests’ experiences.
Automation and cost savings
In addition to the upfront time and money saved, there are additional cost savings for large restaurant operators who make multiple payments to the same vendor from different locations. An interconnected platform can consolidate all of the invoices into a smaller number of payments, saving processing costs. In the cases of businesses that process thousands of checks, the savings can climb in the thousands of dollars.
With AP automation in a robust, automated, and integrated payment system with a vibrant partner ecosystem can also earn restaurant operators credits, whether from vendors or the issuers of secure, fast virtual credit cards that, in many cases, can offset the cost of the solution itself.
AP automation checklist
There are a few things to keep in mind and a few questions to ask when considering accounts payable automation for your restaurant. The first is whether it tightly integrates with vendors and financial institutions. Without those connections, back-office staff will be burdened with pulling data out of one system and inputting it into another, with extra time likely needed to ensure everything is correct. The second is visibility. Does the system alert you and confirm when a payment is made? Does the proposed solution take hold of your funds and take them off your books before the payment is complete? What about fraud prevention and protection? Who is responsible should something go awry? A complete payments solution provides security and the ability to partner with your financial institutions for maximum protection. Finally, is the system restaurant industry-specific? While many accounting, finance, and payments rules and best practices reach across industries, the restaurant business is a unique case with its own specific needs.
Peace of mind and payments
Given the sensitive nature and importance of payments, restaurant operators need complete control of who can create, approve, and send payments. At the same time, it’s essential that the system internally handle bank reconciliations to ensure the funds are available for a smooth payment. The same system should be cloud-based to allow approvals to move forward whether those responsible for them are in-store or office. Virtual, multi-level approval workflows give finance leaders control and insight into payments without creating delays while logging every piece of the puzzle to quickly identify and correct problems.
The restaurant industry is known for its ability to accommodate and evolve as circumstances change. POS systems replaced order pads. Delivery apps overtook the telephone. Now is when automated, integrated, and responsive payments solutions and accounts payable automation will replace paper checks to empower those once buried under paperwork to refocus on making their restaurant and guests’ experiences as successful as possible.
Restaurant365 is an all-in-one, cloud-based, restaurant-specific platform that incorporates accounting, inventory, scheduling, operations, payroll+HR, and reporting. R365 is integrated with your POS system, as well with your vendors and bank, facilitating automated accounts payable and bank reconciliation.