How Automating Accounts Payable Can Help You Clean Up For 2022
by Jillian Straw
The end of the year is a time for reflection (at least, once you’ve survived the holiday rush and taken a few deep breaths to decompress).
As 2021 comes to a close, you may be tying up loose ends and looking toward next year. If you’re wrapping things up, nothing allows you to greet the new year like a clean desk, clean schedule, fresh eyes and… maybe a tidier accounts payable process.
Manual invoice processing can be a complicated, time-consuming task. Accounts Payable (AP) automation can enable you to avoid many of the invoice headaches you may have experienced this last year. Here’s how invoice automation can help you clean up in the new year.
Reduce paper through AP automation
As a restaurant owner or operator, you probably know the struggle of a misplaced paper invoice. Multiple shipments arrive at your restaurant throughout the week, and it can be easy to lose (or dirty) an invoice. Even if you are able to keep track of all your papers, sorting through which invoices have been entered, which are approved, and which are outstanding can be messy.
The restaurant industry is starting to ditch paper invoices and move toward a digital invoice ecosystem. If your vendor is part of the Electronic Data Interchange (EDI) system, your invoice data can seamlessly feed into your invoice system and accounting system.
And if your vendors still deliver paper invoices with shipments, you can scan invoices into your AP automation system in bulk instead of manually inputting information by hand. When an invoice is digitized, assign a General Ledger (GL) code to each individual line item. After the initial setup to assign these GL codes to digitized line items, the process is automated, removing the need to print out and code paper invoices.
You can build on these efficiencies and use even less paper. When it comes time to get approvals, you don’t need to print invoices out to get physical signatures. Instead, route approvals through complex, customized digital workflows in the automated system.
Automation also works to eliminate human entry errors, creating a foundation of more accurate data. With so many moving pieces in your restaurant, small errors can have a large impact on your overall books. Any errors made in the invoice process will ultimately skew your reporting and take up even more time to sort out.
AP automation both cuts down on your paper use, as well as reduces the labor hours spent on handling paper documents. With less paper and more digital automation, you can reconcile invoices faster.
The shift toward invoice digitization can have a dramatic effect on the paper you use at your restaurant. For example, using Plate IQ as their automated invoice processing software, the Karl Strauss Brewing Company reduced their AP paper use by 95%.
Streamline vendor payments with electronic billpay
If you are still using a manual AP process, adopting electronic billpay can add efficiencies to your AP process, while also saving time for your staff, cutting down on errors, and improving your relationships with vendors.
First, issuing paper checks to your vendors requires a long process of printing, physical signatures, and stuffing envelopes. Even once your checks are mailed, you need to track your payments during potential mail delays to make sure checks arrive on time.
Switching to digital payments via a network like Plate IQ’s VendorPay allows you to avoid the hassle of writing paper checks. AP automation consolidates all invoice approval and payment onto one central platform. A digital payment ecosystem allows you to pay invoices online through all different types of payments, such as virtual cards, ACH, and individual vendor portals, as well as automated check printing, email, or phone call payments.
When you streamline your entire vendor payments process, you may end up paying vendors faster, allowing you to take advantage of early payment discounts.
Without worrying about manually tracking vendor payments or completing check runs, your team can use their time for other tasks, like increasing reporting in different areas or reviewing spending trends.
And with a payment method like a virtual card, you can get cash back on your invoice spend — the ultimate reward for cleaning up in the new year.
Replace your filing cabinet with a digital system of record
Your AP automation system can do more than just clean up the extra invoices lying around the office and streamline your payments. It can also serve as a complete invoice digitization tool, creating a digital record of your invoice information.
The old system of record? A massive filing cabinet, stored somewhere in the central office. If someone needed to know any historical sales information, like how much a case of tomatoes cost at this time last year, or how many pounds of ground beef you ordered last month, you would need to check a paper record. The process is time-consuming and inefficient (and that’s assuming that all items are coded correctly).
With an AP automation system, invoices are digitized in line-item detail, capturing header data and line-by-line details like product names, quantities, and pricing. Your GL codes are applied automatically to your invoices, creating a smaller chance for error in the initial coding.
With this information digitized, you can be freed from a filing cabinet system. Electronic digital management allows you to search invoice data. If you ever need to reference the details of an invoice or payment, it’s easy to verify and find the right documentation without sorting through paperwork. An invoice solution like Plate IQ stores invoice securely for up to seven years, allowing you to check your invoice history over the long-term.
In addition, for the “work from home” era, you don’t need to be in the office to check this digital system of record. You can manage invoices remotely by checking your invoice history from anywhere.
As CFO Steve Foster from Northstone Country Club summarized:
Now, you just open Plate IQ, you find whatever you want, whenever you want it, wherever you are. If you’re on the beach, and somebody says, ‘Hey, did you buy a driver from Titleist on August 3?’, you just go look and see if you got it right.
Be prepared for end-of-year reports and tax season
Most restaurants prepare a wide range of year-end financial reports. These reports can inform your strategic planning as well as lay the foundation for a smooth tax season. AP automation and invoice digitization can help you avoid weeks spent combing through your ledgers and spreadsheets to create reports.
With invoice automation and automatic GL codes, you know your coding is correct, which provides a solid foundation for many different areas.
Your restaurant receives thousands of items as inventory throughout the year. These items need to be coded correctly for inventory purposes, but also for your taxes. You need to know that you are applying the correct taxes to each code — for instance, food items may not be taxed in restaurants, but items like your cleaning chemicals are. Invoice digitization can help ensure that you have correctly applied categories and can generate accurate numbers come tax season.
In addition, with your inventory spend automatically clearly categorized by GL code, you are able to drill down into expense categories and plan your expenses for 2022.
Finally, as you examine your expenses during tax season, your accurate invoice and expense data are easily accessible in a centralized dashboard. If you do need specific information for your taxes, your digital files are searchable, making it possible to pull up any scanned invoice when needed.
Automate AP Next Year with Plate IQ
The holidays should provide some time to rest, reset, and take a reflective look at the year ahead. The new year is an opportunity to examine new options and make changes that can help remove any pain points in your business.
It may be time to think about streamlining your invoice coding, reducing paper, adding efficiencies into your payment processes… all things that will make your desk, and to-do list, a little less cluttered in the new year.
Interested in taking advantage of AP automation efficiencies for your business?
We can help clean up your vendor payment process with new innovations in digital invoice technology.
Reach out to Plate IQ below to get a free demo.
Jillian Straw writes for Plate IQ, covering technology in the hospitality industry from a background in restaurants and operations management.
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