Cash Flow, Control, and the Cost of Convenience: What Restaurants Miss When They Consolidate Software
by The Ottimate Editorial Team
Restaurateurs, operators, and chefs want to focus on crafting fine cuisine and giving guests optimal dining experiences. To do so, many turn to all-in-one platforms like R365. But while such systems can handle many back-of-house tasks, they fall short in certain areas. Let’s zoom in on AP processing and explore what your restaurant or franchise might be missing out on.
An all-inclusive restaurant management application has an attractive value proposition. It promises to combine accounting, payroll, inventory, HR, workforce management, and more within a single suite. These features are integrated and centralized and delivered via a SaaS model with transparent monthly pricing options.
The Hidden Costs of Consolidation
However, while an all-in-one platform seems cost-effective, versatile, and convenient at first glance, it sacrifices performances in mission-critical areas. One of these is accounts payable (AP). The accounting module in a consolidated restaurant management system can handle basic invoice and payment processing and perform rudimentary OCR to extract limited data. But it only offers basic automation for processing standardized documents that have complete and accurate information.
The trouble is that – as every restaurant operator knows – documentation and workflows are often as messy as the kitchen after a weekend rush. Invoices, receipts, and POs might be missing details, have handwriting scrawled on them, and be in unconventional formats. A typical restaurant management platform cannot handle these anomalies, leaving staff to scramble and spend time they can ill afford to waste on completing manual processes.
A consolidated system also struggles to process and provide visibility into expenses that fall outside of basic food, beverage, and supply orders. These include CapEx projects, additions to buildings and facilities, and repairs. All of these impact cash flow and profitability, and yet most restaurant management platforms don’t have a way to combine them with daily expenses to provide a full spending picture.
The Power of Purpose-Built Tools Like AP Automation
A restaurant management platform can perform many of the daily payroll, workforce management, and operational features that restaurant managers need to keep their business running smoothly. But when it comes to accounting, your business will be better off using a purpose-built platform that utilizes AI for AP automation. A system such as Ottimate can:
Manage and reconcile statements. Most consolidated platforms can’t distinguish between these and individual invoices or only allow you to pay all the invoices on a statement. Ottimate categorizes statements as a different document type and suggests when to pay outstanding items based on your cash flow needs. It also automatically checks to see the status of each individual invoice listed so you can keep better track of spending.
Optimize invoice and payment workflows. Ottimate learns from every invoice, PO, and receipt you conveniently import into the system. It also continuously analyzes user behavior to automate routine tasks. For example, if you consistently order the same amount of certain inventory items from a vendor, it can automatically process their invoices and payments (if they stay within the tolerances you outline). This simplifies approval workflows so your staff can focus on preparing delicious food and serving it to your valued customers.
Process invoices with incomplete information. Using even more robust and accurate machine learning than large-language AI models, Ottimate applies advanced pattern recognition. For example, if you’d ordered bananas but a vendor mistake led to “banaas” showing up on the invoice, Ottimate would read previous documentation from this supplier and know what they intended to include. This ensures straight-through invoice and payment processing without users needing to investigate incomplete or erroneous details.
Cash Flow is King
Whether you’re running a standalone restaurant or a multi-location chain, margins are slim. An AI-driven AP automation not only helps your restaurant improve spend management but also enables you to maximize cash flow. Here’s how:
Leverage pack-size mapping. On a purchase order, you might request delivery of 24 individual boxes of a certain ingredient. Your supplier lists this on the invoice as one case. Ottimate learns that this is the same quantity, even though it seems to be two different pack sizes. It then moves the invoice quickly through your approval process.
Validate costs and quantities. Ottimate ensures you’re paying the right amount for the correct quantity of the goods you expected by using validation tools. These reconcile the line-item details on invoices with those on POs and/or receipts and automatically flag discrepancies. Ottimate also compares catalog pricing to what you’re being invoiced for and what you received. This helps you maintain more accurate inventory and keep recipe costing under control.
Choose flexible payment methods and schedules. Ottimate VendorPay offers you ultimate payment processing flexibility. It allows you to compensate suppliers, utility providers, and more via check, ACH, spend card, or virtual card and time these payments to maximize cash flow.
Pay on time or early. VendorPay ensures that you promptly pay vendors for critical goods like perishables so that you don’t have to take certain items off the menu. It also helps you make lease or rent payments so that your tenancy is continuous. When early payment discounts and rebates are available, you can use VendorPay to take advantage of these savings. Other payments can be made on 30- to 90-day schedules to maintain adequate cash flow.
Real Talk with Don Dittmar
When it comes to picking a partner to enhance your restaurant’s operations, you need deep industry knowledge, tailor-made functionality, and true understanding of front-of-house and back-of-house challenges. Ottimate (originally Plate IQ) was initially designed just for restaurants, combining full functionality with an intuitive interface that’s quick and easy to use. To give you more insight into what true AP automation can offer you now and where it’s heading in the near future, we caught up with Don Dittmar, VP and Head of Product at Ottimate.
Q: What new Ottimate features can restaurateurs look forward to?
A: We’re releasing a spend control and analysis dashboard. This is a direct response to feedback we’ve received from restaurant clients who usually have to wait until expenses have hit their books or they’ve completed month-end closing to see the impact on cash flow and profitability. Our new tool provides this at the point of capture. As soon as Ottimate’s AI imports a document, the data becomes available in the dashboard.
Q: What real-world advantages will this provide for restaurants?
A: It helps them avoid the traditional lag when trying to analyze their expenditures, spending, cash flow, and profitability. This dashboard provides real-time insights so they can continually monitor and adjust their spending and payments. For example, if they placed regular orders with vendors but are having an unexpectedly slow month, they can match their upcoming spend to the changing needs of their business. This helps reduce shrink and waste and avoid overbuying.
Q: Is there other forthcoming functionality that will benefit restaurants?
A: Yes. We’re enhancing the Ottimate mobile app. Again, this is something restaurant owners have been asking for. It will enable them to process invoices, initiate payments, and perform other mission-critical tasks on their smartphones and tablets. Sometimes a head chef needs to sign for an order or a back-of-house employee has to receive a back door delivery unexpectedly. This updated functionality gives them that flexibility and supports day-to-day change management.
Q: What else will the new version of the app enable restaurant operators to do?
A: It will include a light version of our catalog match functionality. This enables restaurant staff to validate inventory items. If a vendor like Coca-Cola is offering promotional pricing, it ensures that they’re paying the discounted rate rather than full price. This will also help flag any anomalies on an invoice automatically.
Ready to Transform Your Restaurant’s AP Processing?
Think your all-in-one platform is “good enough”? Let’s talk about what it’s costing you and discuss how AI-powered AP automation can benefit your business in a personalized demo.