Invoice payment management: what every restaurant owner needs to know
When you opened your restaurant, chances are invoice payment management wasn’t top of your list of priorities. And with good reason: you’re passionate about hospitality, not bank account details.
The restaurant business is complex enough as it is – even on a good day. Not to mention what it’s like when there is a labour shortage or staff absences or a global pandemic. When the day is done, you want to collapse onto a sofa, not into a pile of paper marked with addresses and due dates.
The trouble is, left unchecked, invoices will eat away far more of your time than they should – along with your energy and profit margins. So, how do you keep on top of invoice payments? Is there a way to make it simple? How do you get payments out the door so you can invite more customers in?
Here’s what you need to know.
Manual invoice input isn’t worth your time
Tracking supplier invoices is time-consuming and pretty dreary.
If you’re following the pattern of many restaurants, you’re receiving PDF invoices by email or paper invoices that change hands at the backdoors of your kitchen along with an accompanying shipment of beers, disposables or fresh veg.
First, you have to track these invoices down, and then you organise them – printing, scanning, categorising – and then send them off to accounts at the end of the month. All in all, you’re going to be wasting about an afternoon a week on this tedious task.
Or if you’re the one looking after the accounts, you’re going to be in for an even rougher ride. Trawling Excel spreadsheets, setting reminders on your phone to pay the right suppliers at the right time, logging on to your bank for each transfer.
You’re doing all this while trying to track fluctuating ingredient prices, ensuring that you’re not paying for what you don’t need, and sometimes the numbers don’t make sense. Even with the best will in the world, doing everything manually leads to mistakes. An invoice might get lost, or you can end up paying the same invoice twice. It’s a lot of hassle, and it’s not necessary.
Accounting software doesn’t solve everything
Don’t get us wrong, we love accounting software – Xero, Quickbooks, the works. To start with, these tools can help you keep track of your invoice history.
That’s crucially important when you need to monitor ingredient costs and compare them against your own prices. Or if you need to see what’s going to waste, or how you can lower your sitting inventory. In an industry that’s marked by wafer-thin margins, you can’t afford to overlook these minutiae.
If you’re trying to do this manually, you’re going to drive yourself nuts – and not just because the price of brazils won’t stop rising. So you’re going to want some accounting software that can give you a heads up when it’s time to substitute ingredients or switch suppliers.
Here’s the catch though… even with industry-leading accounting software, you’re going to be missing a key part of the puzzle: dealing with accounts payable.
When you need to pay a supplier, you’re still going to be manually entering and validating invoices in your accounting software. This, in short, is madness.
At a time when you can pay your friends in a couple of clicks on your phone, why should your restaurant’s invoices be taking up so much of your time?
The right invoice payment process can win back four days a month
Valéry, founder and manager of Liberty’s Burger, runs a chain of restaurants and dark kitchens. A typical day for him involves managing orders, deliveries, the kitchen, and service.
What it doesn’t involve is much invoice payment management. Even when he was opening up a new franchised dark kitchen and he had to deal with a whole load more suppliers. Everything from electricians to furniture suppliers and plumbers – all could be paid for with a couple of taps on his phone. As simple as sending a message on a social network.
We’re going to have to toot our own horn here, so excuse us, but this was possible because Liberty’s Burger uses Libeo.
Libeo pulls all their invoices together, connects to their bank, and pays all their suppliers a few days before the due date in one click. It’s basically the best invoice experience you could hope to have – because you barely notice it happening. All the verification checks are handled for you, the approval system is automated, and… well, quite frankly we could go on about it for a while.
A good invoice payment system lets you up your game
All that automation doesn’t mean Liberty’s Burger loses control. When they do want to pay close attention – when they want to track the price of a kilo of carrots, check a payment history or get an overview of your supplier commitments – they can find what they need on Libeo in moments.
Liberty’s Burger doesn't have to stick to the larger wholesalers for the sake of ease. Their easy invoice payment system means they can be as choosy as they like. And they’re keen to work with artisans: the butcher delivers every other day, their bread comes from a burger bun specialist, and their raw vegetables come directly from farmers you can find at the most prestigious market in the region.
To stop us from beating our own drum too much, we won’t delve into the details here, but be sure to check out why your invoice payment system is more complicated than it needs to be. Or get in touch if you’d like to learn more.