QSR invoices: Your direct line in to a mother lode of savings
As a restaurateur, you can always contract with service providers to capture and crunch the numbers on everything from credit card swipes and customer activity to real estate and culinary trends. But the fact is that you already have a goldmine of valuable data right in the invoices which you may now be either overlooking or outright ignoring every day.
Invoices are jam-packed with a treasure trove of information about your purchases, your contracts and your ability to reduce costs. When analyzed as a full set of data, these records offer actionable insights that should guide your business decisions.
The following four areas offer key insights that operators can get from their invoices as well as ways to be gain access to this kind of data.
These are naturally occurring incidents in restaurant purchasing. In fact, a recent study by spend-management technology firm, Buyers Edge, found that 35 percent of 11,000 individual invoices analyzed had at least one overcharge.
Whether accidents or intentional "mistakes" by less-than-reputable distributors, overcharges include any item for which the price charged to the operator is greater than the contractually agreed-upon amount.
Many restaurant purchasing managers scan invoices visually and would easily spot overcharges on their "top 20 percent" items, but are likely to miss such overages on items further down on their list of purchases. But through careful analysis of invoices, they can be identified and billed back to distributors in cases of discrepancies.
These types of problems are easily audited for contract compliance through spend management software, which may offer commodity price-monitoring and price-checking against agreed-upon markup structures, as well. These software solutions also issue bill-backs to distributors for overcharges and create automatically generated messages to distributors about the status and frequency of discrepancies.
Category spend analyses
By breaking purchases up by category, operators can identify specific areas where they consistently over- or under-spend. Likewise, useful information can be obtained about trending items and areas where spending exceeds operator goals.
For instance, a sports bar may pay close attention to their chicken wing prices, but fail to note the relatively large investment being made in pre-packaged "wet napkins" provided with those orders. But, a category analysis on disposables or napkins can easily uncover the expenditure on such auxiliary items.
New value opportunities can also appear through invoice evaluation, particularly by identifying new contract potential. By keeping a close eye on spend across categories, operators may be able to uncover opportunities to save money through the volume of purchases with a particular manufacturer.
If, for example, an operator is purchasing more dressings from three different manufacturers, a real opportunity exists to consolidate those purchases with one manufacturer with an agreement that locks in lower pricing via direct manufacturer contract. Furthermore, operators may find non-contracted spend with contracted manufacturers that can be added to their agreements to save money.
For example, a meat supplier contract may include items like deli meats as part of a contract for bacon, allowing an operator to extend valuable contracted pricing to their pastrami or ham purchases.
Invoice tracking software also gives operators access to their aggregated spend. When procurement and supply chain professionals must manage national spend they may find it difficult to normalize invoice data from multiple distributors. But a single destination that tracks the parties items are purchased from, as well as the amount spent and location-level detail can be very valuable in analyzing a brand's overall spend.
As an example, operators who buy produce from a broadline, as well as a specialty produce distributor may find it challenging to categorize and analyze purchases when they must log in to multiple systems, download PDF-documents or spreadsheets, and then try to normalize and combine the data from the different distributors.
"With complex distribution networks, operators need one location to make informed procurement decisions," Buyers Edge Manager of Client Relationships Katie Wankel, said. "You need multiple vendors, but you also need one stop to go for all of your data."
The take-away from all this is that invoices truly do hold key information that is ultimately far more valuable than simple documentation of how much a business owes any particular distributor that week. By looking at invoices as data repositories instead of simply purchase recaps, operators can reap the benefits of that stockpile of information about the cost-efficiency of their businesses.
Andy Rosenbloom is a foodservice professional who heads up the Marketing Teams at Dining Alliance, Consolidated Concepts, Buyers Edge and other GPO Platform Brands. Andy’s insights come from the cross-section of the Operators, Distributors, Manufacturers, Service Providers and Trend-Watchers.www