Time is money in business, particularly in the ultra-competitive restaurant industry. Through streamlining operational functions, like the accounts payable process, restaurant owners and operators are able to implement cost-saving efficiencies. Automating accounts payable (AP) in restaurant accounting can eliminate manual, time-consuming tasks, optimize invoice processing, and add money to the bottom line.
Restaurants, with quick turnover stock and multiple weekly orders, face particular vendor payment challenges. However, not all accounts payable solutions are designed for the restaurant industry, so many restaurants piece together non-restaurant-specific accounting platforms. Costly custom integrations require importing, exporting, and setting up third-party platforms to process invoices electronically. This multi-system manual entry is unreliable and inefficient.
Restaurants looking to streamline their AP processes can choose to automate accounts payable with an “end-to-end,” restaurant-specific AP automation solution to help systemize accounts payable, from receiving orders to paying invoices.
Accounts payable, step-by-step
Accounts payable automation helps restaurants track accounts payable activity and is usually comprised of three steps:
Step 1: Capture
The accounts payable platform acts as a document repository for invoices and other paperwork as it comes into the restaurant. Physical paper invoices are scanned or photographed from mobile or desktop devices. Accounts payable automation – AP capture Electronic invoices are emailed or sent directly to the platform. All invoice data is converted into invoice transactions and recorded within the system. AP automation technology automatically identifies, extracts, and applies correct GL codes to individual line items.
Step 2: Approve
Once imported into the system, invoices are routed through workflows for approvals. Operators can determine approval process routing through customized human intervention 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.
Step 3: Pay
When it is time to pay an invoice, AP payments are sent directly and securely through the platform. Most AP automation platforms allow multiple payment methods, including check, ACH, virtual card, or other digital options.
Top AP tasks that you should automate
Accounts payable software for restaurants helps track accounts payable activity and is usually comprised of three steps:
Invoice processing: The manual entry of invoice line items is not only time-consuming, but also error prone. Accidentally keying in a small AP mistake can lead to hours tracking down the source, and paper-based failed, duplicate, or late payments can impact your bottom line. AP automation for restaurants can digitize invoice processing, recording vendor invoices as they come in. By automatically and accurately identifying individual line items, automated AP avoids costly human errors.
Data entry and GL coding: Data entry and GL coding are essential but time-consuming tasks for restaurant AP staff. Digitizing the AP workflow gets your management and accounting team away from the computer to do more strategic tasks. With automated invoice management and AP, managers have more time to focus on customer service and daily operations. Your AP team can leverage the time saved to complete other critical tasks, like reducing expenses or calculating business finances.
Payment processing: Automating the payment process can provide the most time savings of all accounts payable tasks. AP automation allows you to consolidate different payment processes onto one standardized system. You can eliminate manual printing, processing, and mailing checks, or uploading ACH files. Instead, AP automation enables automatic check, ACH, ACH+, or virtual card payments through one centralized dashboard. You can take advantage of early payment discounts, or even facilitate monthly rebates for the usage of virtual cards, maximizing your ROI in accounts payable.
Vendor price tracking: While internal mistakes can be tough to fix, vendor errors on supplier-submitted invoices can be even more difficult to manage – not only for your accounting team, but for your operations team as well. Automated AP empowers you to track price fluctuation, automating contract price verification to hold vendors accountable. And with invoices organized in one central system, with accurate line-item details, you can set variance alerts to gain insight into real-time food costs. Armed with this information, the operations team can act quickly to fix these errors without waiting on the accounting team for details.
Benefits of restaurant-specific accounts payable automation
Day to day, automating accounts payable with restaurant-specific accounting software can save you time and money. An integrated AP automation solution leads to faster invoice processing, increased labor productivity, and lower costs.
AP automation also impacts your business’ big picture in the long term. Without clear visibility into your accounts payable, you may experience irregularities in accounting and reporting. AP automation includes an audit trail, showing you every step of human intervention in invoices company-wide. With better visibility and control over financial data, you can see how to resolve potential problems.
Your automated AP solution also informs other business decisions by providing real-time and historical invoice data. In a fully-integrated system, complete with POS and cost management features, you can track price variance, theoretical versus actual food costs, and COGS. With an organized, streamlined accounts payable process, data-driven insights are automated.
Finally, if you plan on scaling your concepts or locations, the health of your business’ financial engine – including your accounts payable – is crucial. AP automation optimizes traditional accounting tasks, eliminating unnecessary manual work. With AP automation, restaurants can dramatically scale their invoice volume without increasing the size of their AP team.
Automatically extracting and digitizing information you need to know about your operations empowers you to better manage your cash flow and invoice data. Ensuring internal processes are flowing smoothly, automating accounts payable tasks can help you maintain or even increase control over your business.
If you’d like to automate accounts payable, consider an all-in-one accounting and back office platform created specifically for the restaurant industry. With Restaurant365 you can access your online AP dashboard anytime, whether you operate one restaurant or 100. Restaurant365 is a cloud-based restaurant management solution that’s integrated with your point-of-sale system, as well as to your food and beverage vendors, payroll vendor and bank. For more information, schedule a free demo today.