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October 10, 2019
5 Ways to Improve Your Restaurant’s Bottom Line with Automated Invoice Processing
Daily back-of-house keeps you busy, although staying on top of invoices and accounting nitty-gritty isn’t always the first thing on your mind during service hours. But the paperwork is certainly critical to your business, even if it’s what you least love about running a restaurant.
Today, many restaurants are overdue for an upgrade in their operations. The upgrade solution lies in restaurant management software that streamlines routine invoice processing, replaces repetitive manual data entry and integrates with other systems like a POS system and accounting. With a restaurant management system, instead of guessing how your business is doing, you get a precise picture each day. You can’t imagine using a cash register instead of a POS system, and the same applies to the back-office – the technology’s there, and smart restaurants are using it.
Here are five ways a restaurant management system, and automated invoice processing in particular, can improve your life and benefit your restaurant’s operations:
1) Say Goodbye to Data Entry
Invoices come in all shapes and forms, on paper, jotted down and electronically, and traditionally, it’s left until the end of the week or period to start entering these various receipts. But that’s where things have changed fundamentally. The right restaurant management system (RMS) takes over the daily processing of invoices via a mobile app your staff uses to snap photos.
When Greg Casten, owner of The Tavern at Ivy City Smokehouse in Washington, DC, implemented an RMS with automated invoice processing, MarginEdge, he was able to let go of paper pushing and embrace a “bigger, better sense of control” focused on big picture cost-tracking. His team uses a mobile app to take pictures of credit memos, petty cash receipts and service bills, uploads them and lets the software turn everything digital within 24 to 48 hours. Rather than keying in data, he and his team spend time looking at what the numbers tell them about the business and how to reduce food and liquor costs.
2) Get Immediate Food and Beverage Costs
Do you know what you’re paying for ingredients each and every day? How about your real-time plate costs? Daily invoice processing delivers precise answers in real time, with no guessing. Todd Enany, co-founder of Sunday in Brooklyn, thought he was tracking big ticket items on his menu just fine, but when he rolled out his new RMS, it revealed some surprises, such as produce like avocados and specialty lettuces costing as much as some proteins. It led to some menu analysis, as he reflects, “We looked at every item . . . our goal was to increase quality and value for our guests while helping our bottom line. That was a moment of real savings.”
Prices aren’t static, and with invoices processing every 24-48 hours, you have a system monitoring price shifts, something that you can’t do on your own. With the right RMS, it’s simple to set up alerts if prices move, and there’s no hiding where the high-cost items are.
Similarly, you need to pinpoint profit margins on your sales. You put out great dishes, but do they make you any money? When you combine daily invoice processing with the sales data already in your POS, you get the complete picture on both ingredient prices and menu costs. You can then make menu adjustments, and there are no nasty surprises at the end of the period.
3) Reduce Coding Mistakes
Late nights and early mornings in the restaurant business make it hard to face the constant stream of paperwork – after all, nonstop line-item coding isn’t the reason you got into the industry. DC’s Greg Casten admits to spending 30 to 40 hours coding and inputting invoices every week before switching to automated invoicing with MarginEdge.
By processing invoices digitally and cutting manual data entry, coding mistakes have been eliminated. Setup at the start was quick, and the software now handles the line-item coding the same way every time the item comes in. More significantly, the system is robust enough to organize and code items together when vendors use different product names. If one vendor calls an item chickpeas, and another uses garbanzo beans, a sophisticated system like MarginEdge can recognize they’re referring to the same ingredient and code consistently.
4) Instant Access to Invoices
As a business owner, you run the restaurant whenever, wherever you are. With the right restaurant management software, the paperwork you need is always on hand, conveniently stored in the cloud. In Greg Casten’s case, this completely transformed the storage overload that was so overwhelming he was renting a tractor-trailer truck to contain years of accumulated invoices!
What initially convinced him to switch to cloud-based software was the control it gave him when his business was expanding, “As I was opening other units in different locations, it was getting harder and harder for me to put my hands on the invoices I needed when I needed them.” His confidence in managing business growth depended on being able to go to the source invoice and investigate a vendor price issue quickly.
5) Transform Bookkeeping into Financial Management
With all the time saved by cutting out repetitive, manual processing, your accounting team – whether internal or external – can be engaged in performing more advisory work rather than scrambling to keep up with an overwhelming number of bookkeeping tasks. Javier Retamar, CFO of fast-growth Maple Street Biscuit Company, saw the implementation of a top RMS make a huge impact on the role of his accounting department. Javier notes, “MarginEdge allowed our team to go from being purely an accounting department to being more of a finance department. Now, it’s not just about inputting things after the fact, we can have the time and tools to analyze.”
A restaurant management system with invoice automation not only helped Sunday in Brooklyn, Ivy City Tavern and Maple Street Biscuit Company reduce paperwork and storage costs, it also cut food costs and streamlined operations overall. With easy-to-use software, simple changes have led to big savings — from one to two percent of gross.
Many others have also reaped the benefits of back-office automation from MarginEdge, the leading restaurant management platform and pioneer in automated invoice processing. By handling the data entry, pulling information from your POS, crunching the numbers and providing critical reports, MarginEdge can help you save time and money and make the right decisions at the right time.
To learn how MarginEdge can help you say goodbye to the paperwork, reduce costs and streamline your restaurant’s operations, contact us to get a free demo.