A well-designed AP workflow covers five distinct stages. Problems in any one of them affect the accuracy and efficiency of the entire process.
Invoice capture
The workflow begins when an invoice arrives. In a restaurant operation, invoices come from multiple vendors in multiple formats — electronic invoices from integrated vendors, PDF attachments by email, paper invoices from delivery drivers, and EDI feeds from major distributors. Capture means getting every invoice into a single system where it can be processed consistently, regardless of how it arrived.
Manual capture — typing invoice data into an accounting system by hand — is where the most data entry errors originate. OCR-based capture, which reads invoice data automatically and maps it to the appropriate fields, eliminates most of that error risk and significantly reduces the time required per invoice.
Coding and matching
Once captured, each invoice needs to be coded to the correct general ledger account and matched against the corresponding purchase order. GL coding errors — assigning a food cost invoice to a supply category, for example — distort COGS and produce a P&L that does not accurately reflect what the business spent.
PO matching is the step that catches vendor pricing discrepancies. When an invoice price differs from what was ordered, the system flags it for review rather than passing it through to payment. For operators who have negotiated specific pricing with vendors, automated PO matching is the mechanism that enforces those agreements at scale.
Tip: Invoice variance tracking is most valuable when it covers line-item detail, not just invoice totals. A vendor who invoices at the correct total but adjusts individual ingredient prices may not be flagged by a system that only checks the summary amount. Line-item matching catches those discrepancies before they accumulate.
Approval routing
Approved invoices need to be reviewed and authorized before payment is processed. The approval workflow should route each invoice to the right approver automatically — based on location, invoice amount, vendor category, or escalation rules — rather than relying on manual email coordination.
Approval bottlenecks are one of the most common causes of late vendor payments, which strains relationships and can result in lost early-payment discounts. Automated workflows with built-in reminders keep approvals moving without requiring the accounting team to chase down reviewers.
Payment processing
Once approved, the invoice moves to payment. A modern AP workflow supports multiple payment methods — check, ACH, and virtual card — with the appropriate controls for each. Virtual card payments can generate rebates that offset processing costs. Positive pay, which validates checks against a list of issued payments before honoring them, is a fraud prevention measure worth having in place for any operation processing significant payment volume.
Restaurant365 offers check, ACH, virtual card, and other digital payment options with no cost for virtual card payments, and Positive Pay is available at no additional charge.
Recording and reconciliation
Every payment needs to be recorded in the general ledger accurately and matched against the bank statement. When AP is connected to accounting natively, journal entries are created automatically as invoices are approved and payments are processed. When it is not, someone has to create those entries manually — which takes time and introduces the possibility of posting errors.
