Front-of-house restaurant technology may be barreling full speed ahead into the future, but the back of the house is still stuck in the past. The bulk of restaurant operations continue to occur through pen-and-paper bookkeeping and communication and through email, lengthy processes that cost businesses time and money — all the while in an industry with notoriously thin margins. This lack of transparency not only keeps restaurants from making the smartest decisions for their business, but also sees them lacking access to comprehensive, up-to-date information.
“Everything in this industry is completely offline — the catalog management, the ordering process, receiving, and then payments,” Plate IQ CEO Bhavuk Kaul told PYMNTS in an interview. “We’re taking the pieces we’re good at, trying to automate those, and partnering with other folks who are doing other parts and figuring out how we can integrate and offer a cohesive solution to our customers.”
For its part, Plate IQ automates accounts payable (AP) for restaurants and other businesses and recently announced a partnership with food service procurement and supply chain solution Foodbuy Foodservice. The tie-up will allow Plate IQ’s restaurant customers to utilize the procurement solution’s Manufacturer Rebate Program, to orchestrate group purchases to earn bulk discounts from manufacturers and suppliers.
Where Foodbuy Foodservice provides restaurants with rebates and discounts, Plate IQ provides them transparency into pricing when they are purchasing ingredients. The AP provider’s restaurant partners include McDonald’s, Burger King, Au Bon Pain and Nobu, among others.
Keeping Restaurants in the Loop
Typically, when restaurants are looking for suppliers they are limited to the options that Google presents to them, skewed toward businesses with the best SEO to the exclusion of, say, small, local suppliers with high-quality ingredients.
“If you’re running a restaurant, you’re starting out with your first restaurant … there’s no way to discover those suppliers,” said Kaul.
Even once a restaurant has settled on a supplier, that restaurant is often on its own when it comes to pricing, without access to information about how much they should be paying or how much other businesses are paying. This system leaves restaurants vulnerable to price gouging and other deceptive practices.
“There is an opaqueness or lack of transparency in what the price should be for the ingredients based on the quantity they buy,” he explained. “Across the stores, and across the other restaurants around the area, they are paying different prices for the same item on the same day, from the same supplier.”
By taking the process online, the company lets restaurants opt into price alerts, view cost changes, compare pricing across locations and find opportunities for better deals.
Time is Money
In today’s labor market, the time spent navigating through the muddle of outdated technologies is often time that restaurants cannot afford to lose.
“Before us, restaurants were manually uploading invoices and pushing them to a manufacturers platform,” said Kaul. “We are trying to automate a lot of those back-end processes.”
He noted that, even before the pandemic, there were questions of whether to automate these processes or hire more staff. Now, restaurants cannot even fill their existing positions. In order to make ends meet, restaurants are forced to find ways to get more value from the workers they have, which means finding ways to make the business run more efficiently.
The technology exists to automate and consolidate all the paper forms, phone calls and emails, making the system run more efficiently and enabling more processes to be done from home, as workers increasingly prefer remote options. Now, it is a question of getting restaurants on board.
“For us, the biggest challenge has always been awareness,” said Kaul. “People are not aware that technology like ours exists.”
“Post-COVID, I think there’s a lot of pent-up demand, which is helping us see that restaurants and businesses are very interested in payment automation now,” said Kaul.
Indeed, restaurants are recovering from the devastating effects of the early months of the pandemic. Data from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, find a plurality of restaurants expect their 2021 revenue to grow from 2019, and digital ordering is upping their order volume, with restaurants expecting a higher digital mix than before the pandemic.
With more orders to fulfill, the inefficiencies in the system become increasingly pressing. After all, more meals mean more ingredients, which means more paper checks and invoices, a time-intensive process at a point when time is one of the many things that restaurants cannot afford.
Additionally, the combination of the rise in online ordering and the change in U.S. Postal Service leadership has made paper mail less reliable, so systems that depend on sending checks by mail are exposed to additional delays and other vulnerabilities.
“The pandemic itself has definitely exposed the cracks in the system,” said Kaul. “So, there’s a bigger push toward moving more and more payments to a digital format.”