Data, data everywhere! Particularly if your clients are in the hospitality business, from restaurants to country clubs to hotels, you may be implementing new tech tools that generate a lot of data.
Tech solutions like a point of sale (POS) system, inventory management software, or automated invoice processing tool can provide new efficiencies for businesses — and create an unprecedented amount of data, particularly for the back office.
Data is only beneficial if it is used to improve your organization and your client’s bottom line. Examining how data is gathered, from beginning to end, can help you take full advantage of the resources in front of you. When your data meets certain parameters, you can gain precious insights to apply to your client’s business (particularly in transaction-heavy industries like hospitality).
The quality of your back office data ultimately depends on how it was gathered. Here, we’ll explore three specific qualities — accuracy, efficiency, and timeliness — that can make back office data particularly valuable, and how you can prioritize these “data goals” in the way you set up your systems.
Quality Assurance in Your Data: Issues with Manual Invoice Processing
A good place to start in your data journey is by examining your overall approach to back office activities. If your team is still processing invoices and vendor payments by hand, you are likely grappling with a number of different quality assurance issues.
Here are a few ways manual processes impact your data:
- Inputting invoices by hand: Hospitality businesses typically receive a large number of invoices every week from many different sources like email attachments, paper invoices, Electronic Data Interchange (EDI) invoices, etc. Individually uploading or even mailing these invoices takes a large amount of time, leading to large delays in processing (and the occasional misplaced invoice).
- Manually adding your GL codes: Coding invoices for your general ledger (GL) is not only a time-consuming task, but the repetitive, tedious nature of data entry leads to simple errors that can snowball into larger inaccuracies. Over time, data entry errors can impact the overall accuracy of the numbers you use to make fundamental business decisions.
- Searching out approvals: The people who work in hospitality are always on the go. If your AP team still has to track down approvers to pay invoices, there is a delay in successfully processing invoices. Questions about invoice status can hold up data processing across the entire AP system and cause large inefficiencies.
- Siloed data storage: Manual invoice processing can make it difficult to actually use data. Particularly if your firm still uses a filing cabinet for paper records, your team has effectively siloed data that could be effectively used across the organization. Even a simple client question such as, “how much did we pay for canned tomatoes with Vendor X over the course of last year?” would require a large amount of shuffling paper for your team.
A manual Accounts Payable (AP) process can lead to inaccurate, inefficient, and tardy data.
Ensuring You Are Gathering High-Quality Data
AP automation that generates high-quality data can help solve for these common manual invoice processing issues. Instead, the data that automatically has the characteristics your business is looking for: accuracy, efficiency, and timeliness.
Automation has positive ripple effects across your organization, particularly in regard to accuracy.
An invoice processing solution scans your invoices to capture line-by-line details. This automatically digitizes line-item info like cost, quantity, and product name. After these invoice items are matched to your chart of accounts one time, they are then automatically coded correctly to your GL on every future invoice.
Automating tasks that used to be done by hand means that data entry is standardized and consistent. The process can make all of your reports more accurate, which is especially important for business-critical reports like a profit and loss (P&L) statement.
When you have more confidence in financial data, it drives what you can do with the data. For instance, at Plate IQ’s Tech Talk at the 2022 National Restaurant Association Show, panelist Sean Skuro, VP of Accounting & Finance at One Table Restaurant Group (Tendergreens, Tocaya), discussed how automation impacted his organizational reporting.
After Plate IQ automation, P&Ls for the company have maintained a much higher rate of accuracy. “Our P&Ls are coming out more accurate. Before we first started on this automation journey, anywhere from a 100-500 basis point fluctuation,” Sean explained.”Now, we only have a 10 basis point fluctuation from preliminary to final. When we put out preliminary P&Ls in those first few days, they’re final, essentially.”
As Sean explained, this increased accuracy impacted One Table Restaurant Group’s end-to-end business results. It can also help drive accountability and ownership of data across your organization, encouraging your team and your clients to rely on measurable trends to make decisions.
Because technology enables efficient operations, automation can give time back to your team members. With automation efficiently gathering data, your team won’t need to spend time on tasks like:
- Waiting for paper invoices
- Entering data in multiple places and systems
- Applying the same GL codes by hand week in and week out
- Tracking down the source of mistakes caused by manual data entry
- Stuffing paper checks into envelopes
Instead, with automated controls in place, your staff are free to focus on more rich analytics and strategic reporting. And when reporting is required, AP automation replaces filing cabinets filled with paper that made reporting tedious and inaccurate. Your data is centralized, indexed, and searchable. There is “life after AP automation”, and your team and your clients can work on other value-added tasks with the time freed up by new efficiencies.
Finally, without the time-consuming roadblocks caused by manual AP processes, you are able to access data while it is still “fresh”. Rather than wait for the next batch of invoices to arrive, a paper check to be mailed, or records to be filed, your team can access relevant data very quickly.
Plate IQ customer WHG Companies described how managers physically bundled up paper invoices and mailed them to the centralized AP department every week. With this “snail mail”, some invoices took two to three weeks to get to the central office.
Sarah Zuehlke, the Lead Accountant at WHG Companies, described how her team “was getting emails and things from vendors saying, ‘why haven't you paid us?’ Well, it's because we still haven't gotten your bills.”
The hospitality business moves fast, and even something small, like a few mispriced invoices, can add up quickly. Waiting for reports prevents managers from proactively making changes and quick decisions.
With automated invoice processing, you can remove many of the delays caused by the manual process. An automated system quickly centralizes data in the cloud, so your team can start using it almost immediately. Rather than spend staff hours gathering data, your team can spend more of their time analyzing, reviewing, and talking about the data instead.
Timely data allows you to proactively make a change in a business, within the relevant period, while you can have a bigger impact.
Accurate, Efficient, and Timely, Oh My!
Generating data is one thing; making sure it is useful to your business operations is an entirely different beast. AP automation can help you rise to the challenge, ensuring your actionable data is accurate, efficient, and timely.
Ready to hear more about how an AP solution like Plate IQ can help your back office and your client’s bottom line? Contact Plate IQ to schedule a personalized demo for your business.