Despite high consumer demand, the restaurant industry continues to face challenges that impact profitability and productivity. Labor shortages, disruptions in the supply chain and the need to digitize operations have elevated the cost of doing business and threatened already slim profit margins. Where restaurant technology may once have been a nice-to-have, it’s now essential to help mitigate the industry’s most pressing issues.
Challenges persist, even amid an upswing
It’s estimated that one out of three restaurants won’t survive their first year in business. Many factors contribute to this unsavory statistic, not the least of which is that restaurants are among the hardest hit industries of the pandemic. Even as restaurant sales are rebounding from the pandemic low, the industry continues to grapple with a tight labor market and supply chain issues.
Meeting customer expectations for digital experiences and implementing the solutions that enable these experiences are additional hurdles. Restaurants must balance the need for technology innovations that meet consumer demands and industry regulations with other capital improvements that facilitate growth and counter competition.
While front-of-house operations experienced a major shift amid COVID-19 restrictions, back-office operations also became more complex. Problems caused by an erratic supply chain are exacerbated when vendor payments are late or missed altogether, causing friction in vendor relationships and negatively impacting the customer experience.
Payments fraud, too, is a persistent issue. Restaurants with manual accounting and invoicing processes are more likely to experience billing errors and are more vulnerable to check tampering and forgery. For restaurants grappling with staffing and supply issues, payments fraud is an additional stressor they can do without.
5 benefits of integrated payables technology
Outsourcing back-office operations with an integrated solution that automates the payables process can help restaurants address their biggest challenges while reaping the benefits of a more streamlined approach.
- Improve vendor relationships. Vendors can choose their preferred payment method (ACH, wire transfer or virtual card) and get paid faster despite any disruptions that may occur with the restaurant. Check printing, ACH transactions, virtual cards and vendor enrollment are all managed by the back-office provider.
- Ease staffing issues. Labor shortages brought on by the pandemic aren’t limited to front-of-house – they’ve hit restaurants’ back offices too. With an outsourced solution, employees can spend less time dealing with payment-related issues and focus instead on more strategic areas of the business.
- Enhance security. The virtual card payments option available with integrated payables provides a guarantee of funds and the highest level of payment security available among electronic payment types.
- Receive revenue share opportunities based on vendor payment activity. This income can help restaurants offset costs to modernize the customer experience, upgrade point of sale equipment, make improvements to facilities, invest in employee retention efforts and manage other important initiatives.
- Save on costs. With the average cost per check being $4-5, reducing check payments to vendors creates a cost savings. Automated payments also reduce errors that can result in surcharges and late fees. Additionally, no-cost implementation like FIS offers with its integrated payables solution help restaurants save even more.
FIS offers an array of back-office solutions for restaurants including an Integrated Payables solution designed to reduce manual processing and facilitate more timely, efficient payments. To learn how we can help your restaurant save on costs and capture revenue share opportunities, contact us.