This is a guest post from our partners at MarginEdge.
These days, restaurant owners have far more on their plates than delicious food. With restaurant ownership comes business management, and that means keeping an eye on economic shifts. Inflation is the subject du jour for obvious reasons: August’s overall consumer price index was up 8.3% compared to 2021, with food prices up 11.4%. It’s not all bad news for restaurants though, as purchasing groceries to cook at home increased 13.5% from a year ago and eating out only rose 8%.
While this difference may push guests to opt for dining out rather than in to save money, 8% still doesn’t have us popping the Moët (or André, if we’re being realistic).
At a time when everyone is worried about rising costs, it’s solid business practice to delve into the nitty gritty of business operations, where incremental changes can have major effects on cash flow and revenue. Although not usually top of mind for business owners, streamlining invoice management can actually be one of the biggest weapons for fighting inflation.
Here are four ways proper restaurant invoice management can help fight inflation:
1. Automatically track food costs
This one might be obvious, but it's an important point nonetheless. Tracking food costs by hand on a spreadsheet is time consuming. It’s also no longer the most efficient way to monitor your purchasing. Automated invoice management systems categorize purchases for you and track costs, and all you have to do is snap a picture.
2. Save on labor costs
The only way to know what your food costs are is to track product prices from your invoices. Often this is done manually on a spreadsheet, which requires consistency and a ton of human hours spent entering data. This may feel like the more cost-effective option at first glance because you can do it in-house with someone already on your payroll, but when you look at the numbers, it doesn’t always add up.
Using an invoice management system like QuickBooks can end up saving your business money in the long run. According to payscale.com, the average salary for a restaurant general manager is about $51,000 a year, so if your manager is spending more than three hours a week on paperwork, the invoice management system has already paid for itself.
3. Prevent accounting discrepancies
No one likes to admit it, but sometimes invoices go missing. They get lost in a stack, fall behind a desk or get tossed out with the shipment packaging. While it’s not the end of the world, it can mess up cash flow and create headaches chasing down vendors to get their receipts for your bookkeeper.
Invoice management systems prevent these slip ups by keeping digital copies of everything coming in every week. Knowing what is in stock at any given moment will let you order accordingly if a price is higher or lower than usual.
4. Pinpoint waste with theoretical usage
Proper invoice management can help fight inflation when used in combination with taking regular inventories. Invoice management systems tell you what you bought, POS data tells you what you sold, and inventories tell you what you have on hand. From there, it’s just math, which thankfully technology and a restaurant management system (RMS) can calculate for you.
While an invoice management system and RMS can’t tell you why the waste is happening, it can quickly show you where it’s happening so you can do something about it. Being able to nip waste issues in the bud is a powerful way to combat inflation rising product prices.
MarginEdge, a restaurant management software, now integrates with QuickBooks Online to help reduce paperwork and costs while streamlining your restaurant’s operations. Learn more here.
