There are three primary ways for restaurants to pay their bills: manually writing checks (stuffing, licking, stamping envelopes, and taking them to the post office), using credit cards or digital banking, and lastly using a third-party provider like Bill.com, QuickBooks, or your restaurant management system (RMS). While there are pros and cons to each method, the right method is going to be the one that ultimately works best for your restaurant’s needs. Since MarginEdge provides bill pay functionality for restaurants, this blog will discuss the benefits and drawbacks to paying bills through a third-party provider.
Time is Money and Mailing Money Takes Time
Paying your bills through an online or third-party provider when you can write checks yourself may seem like a silly expenditure. Kind of like kombucha. Is it just $6 fizzy vinegar, or does it actually help with digestive issues? We can’t answer that because we’re not scientists. But we can answer the question of what’s in it for restaurants when they choose to pay their bills and invoices through their RMS. The biggest benefit is how much time it can save you and your operations team.
With labor and supply chain shortages stretching operators’ thin (and we mean Brooklyn-style pizza crust thin), time is an even more valuable commodity now more than ever. Tools that save you from having to manually write checks, stuff envelopes, and deliver them to the bank every other week are going to make a powerful impact on your productivity and sanity. Waiting in lines at a bank and having to practically shout at your bank teller Linda through your face mask that you’d like to make a wire transfer in 2021? Fuhgeddaboudit. If your RMS is already processing your invoices, the information should be all in one place and you can see all your bills, pick when you want to pay them, and send your payments all in one place, from anywhere, at any time.
We do have to acknowledge that there are those out there who see this as a drawback. They enjoy their bi-weekly trips to the bank. The therapeutic monotony of stuffing checks into envelopes. The slightly sweet taste of envelope glue (why is it sweet?!). That’s cool, my guy, you do you. But for those operators out there who would love to spend more time with guests, be able to help out the kitchen and front of house more often, or just stop having to buy so many envelopes and check stock, utilizing your RMS’ bill pay function makes it all possible.
Don’t Be a Fool, Use a Safer Tool
The second benefit for restaurants using bill pay is fraud and theft protection. Online transactions are secure, and there is an audit trail to show you who did what and when. You can also track payments digitally to make sure the funds were deposited and received by your vendors. An RMS will also allow you to monitor and control which users have permission to approve payments, monitor payment history, and easily see support documentation if any discrepancies come up. With an RMS, operators can have greater segregation of duties and control over their payables process, which decreases risk and increases financial security.
Greater Flexibility When it Comes to Planning Cash Flow
The last benefit is how an RMS can help manage and optimize your cash flow by letting you easily see what is due when all in the same place. An RMS gives operators a more powerful advantage when it comes to paying vendors because your digitized invoices live in the same place, on the same platform. With both the traditional check method and 3rd party bill pay providers, you have to have either hard copies of the invoices on hand, or a separate digital resource with all the invoice information. Unless you enjoy being chained to the desk in the back office, bill pay through your RMS offers a more flexible option because you can monitor and pay from anywhere. This means even if you are on a beach 500 miles away from your restaurant, you can still make payments. We’re not saying anyone wants to pay bills on a beach, we’re just saying with an RMS, you can. An RMS shows you all of your invoice data at once, so you can sort bills by vendor, due date, or amount due, and plan accordingly so that your payment scheduling is optimized, keeping your cash flow steady.
When evaluating which RMS to use with bill pay in mind, you should look for a solution that doesn’t charge additional fees for each check or payment. On average, restaurants can send anywhere from 30-80 vendor payments a month. Being charged for each payment can add up very quickly (and isn’t much different from paying for the checks, envelopes, and labor to send them yourself), so it is essential that restaurants looking to save on operating costs look for a free or included bill pay solution from their RMS. That way bill pay is one less 3rd party provider to keep track of and pay at the end of the month. When it’s already included, you’ll always know what your bill is going to be so there are no surprises.