How to Save Time and Unlock Costing Insights with Restaurant Invoice Processing Automation
Technology plays an important role in restaurant operations. Labor struggles, supply chain issues, and rising costs require operators to implement automation and efficiencies across their business and take control of costs.
Invoice processing automation is a foundational tool for restaurant operators. It allows them to win back time, save on bookkeeping, and unlock actionable costing insights.
These costing insights are perhaps the greatest benefit of invoice automation, particularly with all that’s stacked up against the industry.
Traditionally reserved for enterprise accounting and ERP systems, these integrated, affordable invoice platforms are now indispensable tools for restaurants of all types.
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What is invoice processing automation?
Invoice processing automation uses software to capture and digitize your supplier invoices.
The capture part is done via snapping a photo or scanning paper invoices. It also works with emailed invoices, paper receipts, utilities bills and EDI feeds, if you use broadliner suppliers.
Once invoices are captured, invoice automation systems digitize line-item detail and make each document searchable. You can then easily access, evaluate, and share expense information across your team and locations. Search and locate invoice and bill details by vendor, item purchased, amount and more.
Some invoice systems rely on human analysis to do the digitizing/processing. Other systems can process faster and without human error using intelligent software and ocular character recognition (OCR). This is essentially a machine vision system that turns invoice information into data, that fuels accounting and reporting systems.
Why is invoice processing automation important?
We don’t have to tell you how many invoices come flying into your operation each week.
Between produce, meats, dry goods, packaging, beverages, beer, wine, liquor…you’re probably getting at least three invoices a week. What do you do with all of them?
They pile up about as fast as they get spilled on, burnt, and generally destroyed. Are you able to extract the data you need from them before they’re trashed? And how do you store them to reference later if needed?
It’s no longer sustainable to blindly pay supplier invoices without first analyzing prices. And storing invoice papers in a back-office banker’s box literally locks away potential invoice insights.
Invoice processing automation is the answer.
You can set procedures with your staff so that they immediately snap a photo of each invoice that comes in. From there, the system will store the file in the cloud like a document management system, while also extracting critical product/ingredient pricing details.
These pricing details can feed into your inventory management and recipe costing systems, powering them with accurate, timely costing data. Integrated together, invoice automation and recipe costing systems unlock invaluable insights for you to make more informed decisions about menu engineering and pricing, purchase orders, and profitability.
5 Ways Invoice Automation Saves Time and Unlocks Costing Insights
You work too hard to not maximize the return on your Cost of Goods Sold (COGS). Your invoices hold the critical details you need to properly track your costs and optimize spend across your operation.
Here are five ways that automated invoice processing can help you consistently extract these valuable spend and cost insights.
1. Accuracy – Ensure exact invoice data is captured and uploaded to an accounting system
Digitizing invoices reduces human touches in your processing, keeping your data much more accurate than it would through manual entry. Clean, accurate data is the foundation on which insights are identified and decisions can be made.
Automation mitigates the input errors staff will inevitably make when receiving and inputting invoice data. And the expedited process of simply taking an image of the invoice will get them back to work (i.e., their priority) more quickly.
2. Actionability – Gain newfound insights from digital invoice analysis
Digitizing accurate invoice data is the first step toward data-driven decision making. Data-driven decision making unlocks actionability in your invoice automation process.
These platforms and procedures allow the system to complete the heavy lifting while you and other stakeholders – ops, finance, accountants, etc – are served easily digestible dashboards and recommendations.
If you want a snapshot of the health across your operation, it’s there. If you want to drill down into a specific span of service at one of your locations, it’s there too. You’ll always be able to see where money is being spent and which levers you can pull to adjust spending for short-term and long-term goals.
With automatically generated charts and graphs, you can visualize vital data in a variety of ways and make strategic decisions that hold vendors accountable, monitor cost fluctuations, and achieve target profitability.
3. Priorities – Get invoice receivers back to their critical daily tasks
Servers, prep cooks, bartenders and managers all have tons of tasks to complete prior to, during, and after service.
The last thing they need is to have to deal with receiving and processing vendor deliveries and invoices.
Invoice processing automation makes it quick and simple to get an invoice into the system so that staff can stay on their priorities. Simply designate one or two employees as invoice receivers. Have them download an invoice scanning app and there you have it — you’ve implemented automated invoice processing.
4. Accountability – Track vendor credits, returns, and handwritten invoice adjustments
What would happen if a supplier sent you 10 cases of caviar instead of 10 containers?
That’s a massive cost difference that will require some accountability. Identifying these mistakes and efficiently and accurately reconciling them is an essential benefit of invoice automation.
Accountability is especially key with so many products that spoil, spill, or may be missing from orders. Automation simplifies the reconciliation process by making fast, accurate comparisons between what you order, what you’re charged, and what you receive.
Many invoice automation systems include invoice approval mechanisms as checks and balances, to eliminate situations that’ll put you on the hook for unplanned costs.
5. Practicality – Eliminate the need to safeguard, copy, store, or transport paper invoices
Invoice processing automation makes paper invoicing obsolete. No more going back to reference illegible notes crammed in the invoice margins underneath coffee stains. No more transporting stacks of papers across town. And no more paying to store, ship, and generally deal with paper invoices.
Digitize and then wash your hands of it all.
Where do you go from here?
xtraCHEF by Toast can relieve you of tedious data entry, so that you and your team can focus on the day-to-day tasks required to deliver exceptional, profitable experiences. You can also check out data on the state of ingredient prices, powered by xtraCHEF such as chicken thighs, avocados, and eggs.
We combine machine learning with highly trained quality control operators to fully extract your invoice information. xtraCHEF by Toast can help you:
Cut data entry and invoice paperwork out of your day
Activate clean, accurate invoice insights for in-depth costing
Pass coded payables data to your general ledger and accounting system
xtraCHEF by Toast turns invoice details into costing insights, so that you can make more informed decisions for your restaurant’s profitability.
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.