4 Ways AP Automation Helps Grocery Stores Drive Cost-Savings
by The Plate IQ Editorial Team
Food prices remain high for today’s grocery shoppers, despite signs that inflation may be cooling. In fact, the USDA expects increased prices for nine food categories—including poultry, dairy products, and cereal products—to stick around.
Not surprisingly, the food price hike is affecting how people shop for groceries. Forty percent of shoppers are visiting multiple stores to find the lowest prices, according to the latest Dunnhumby Consumer Trends Tracker. And grocery lists are getting shorter, as a recent PYMTS study found that nearly 60 percent of grocery shoppers have cut back on nonessential spending.
Despite the economic downturn, grocery stores must find ways to retain customers while cutting costs to maintain, and ultimately improve, their profit margins.
How AP Automation For Grocery Stores Drive Cost-Savings
One way grocers can cut costs is through accounts payable (AP) automation.
The average grocery store partners with many suppliers to stock their shelves. This means an inefficient AP process that relies on paper payments or manual processes can be costly for grocers.
Data from the American Productivity & Quality Center show that companies with little or no invoice automation typically spend more than $10 per invoice, compared to companies using AP automation that spend $2 or less. Using paper payments only adds to the cost, as companies can expect to spend $4-$12 per paper check.
Automating invoicing and digitizing payments can help grocers reduce their AP overhead and recoup losses with cost savings and new revenue.
End-to-End AP Automation for Grocery Stores
Some grocery stores string together multiple tools and processes to ease the pain and costs of a manual AP process. An integrated AP automation software can help modernize your grocery store’s invoices, approvals, and payments—eliminating manual data entry and streamlining payments—all in one platform.
1. Automate Invoice Management
Manual invoicing isn’t only time-consuming for your team. It also increases the risk of errors and the potential for late payments to suppliers. Automating your invoicing, however, can help drive productivity while improving your bottom line.
An automated accounts payable tool can help your team quickly upload invoices in bulk—via paper, PDF, email, and even EDI—and instantly capture and digitize line-by-line details without manual effort. Some tools, like Plate IQ’s invoice automation solution, can also automate the GL coding process by extracting line-item data from your invoices and automatically mapping it to the appropriate code.
Powered by deep-learning technology, our solution only gets smarter with time. As you upload invoices, the tool will swiftly learn how your team processes invoices, improving accuracy and reducing processing time.
2. Build Custom Approval Workflows
Approving invoices can take days or weeks to process, depending on the size of your grocery store. From shuffling paper invoices from desk to desk to manually reviewing each invoice, this step in the process can bring your AP to a grinding halt.
With custom approval workflows within your AP automation tool, your team can easily route invoices to the right approver in a few clicks. You can set custom rules to route invoices automatically using any invoice data and based on your team’s existing approval flow.
It’s another way to avoid late payments while increasing your visibility into any bottlenecks in the process, saving you time and resources while boosting your team’s productivity.
Invoice approval is made simpler with Plate IQ’s automatic reconciliation tool. Our smart technology automatically flags discrepant statements and missing invoices for your review—cutting down the time it takes to resolve any issues before approval. And if you have any invoice or approval-related questions, you can communicate with your team within the platform.
3. Digitize and Automate Payments
A manual, paper-intensive AP process can be costly, especially when paying your suppliers. It can lead to higher transaction costs and late payment fees that can add up rapidly for your grocery store.
Automating payments within your AP automation tool enables your team to pay all your suppliers on time and in their preferred method—within a single platform. You can schedule and approve payments, even allowing you to take advantage of suppliers’ early payment discounts. And finally, you can export payment data into your accounting system for quick and easy reconciliation.
Automating your AP not only saves you money but can also generate new revenue for your grocery store. With Plate IQ’s payment automation solution, you can pay suppliers directly from the platform via ACH transfers, paper checks, or virtual cards (vCards). That means reduced transaction costs, fewer to no check runs, and even monthly cashback rebates on qualified vCard payments.
“With inflationary and wage pressure, technology and AI solutions are a necessity to combat rising costs and razor-thin margins in the grocery industry. For this reason, Plate IQ was a logical solution to allow FMS to minimize back office costs for our retailers.” – Robert Graybill, CEO of FMS Solutions, the leading provider of bookkeeping and accounting services to the independent grocery industry
4. Modernize Recordkeeping
Physical recordkeeping is another piece of the AP puzzle that’s likely costing your grocery store. Consider month-end close as an example. If you’re managing paper invoices, your team is tasked with reviewing every single invoice against your accounts—manually checking for discrepancies and verifying account balances. This increases the potential for inaccurate financial reports.
AP automation tools like Plate IQ can serve as your digital filing cabinet where every invoice is searchable and secure. Your team has access to a full audit trail, with visibility into an invoice’s journey from submission to payment. Our automatic reconciliation tool also plays an important role: Proactively flagging missing or inconsistent invoices so you can quickly resolve any issues and accelerate your closing and reporting timelines.
As a bonus, you’ll even earn points with your CFO, who counts on your team to facilitate accurate recordkeeping and reporting.
Streamlining Your Grocery Store AP
Inflation has put a strain on shoppers’ wallets and your store’s profits. Leveraging AP automation for grocery stores can help offset current financial challenges by cutting back-office costs and generating new revenue.
AP automation tools like Plate IQ help mitigate the costs of manual invoicing, paper-based payments, and physical recordkeeping. As a result, you can improve your bottom line and focus more on providing a shopping experience that keeps customers coming back.
To learn more about how Plate IQ’s end-to-end accounts payable solutions can eliminate 90% of your manual accounting processes, with virtually limitless customization for routing and approvals, all while freeing up employee time and generating revenue through payments that earn cashback, Click Here.
The Plate IQ Editorial Team
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