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Managing vendors is a bit like playing whack-a-mole. Just when you think you’re up-to-date, a price changes, an order is delayed, or an invoice is overdue. Even if you’re keeping your books well, tracking and organizing vendor payments can take up valuable time in your week—and if you don’t stay on top of price changes, you can easily throw your budgets into disarray. To streamline vendor payment management, follow these four steps:
1. Organize Your Bills
The first step to wrangling your vendor payments is to organize your bills. Keeping paper invoices in a filing cabinet is a good way to lose track. Scanning invoices or requesting e-statements, on the other hand, can help you keep accurate records of your bills and allow you to log them into your spreadsheets or accounting software quickly.
Likewise, using a vendor payment platform can cut out the middleman. Simply snap a picture of your invoice and let the software scan and update inventory and accounts payable.
2. Move to Electronic Payments
Yes, moving to electronic payments allows you to pay your vendors more quickly. But it helps you reconcile your accounts more quickly, as well. Electronic payments are much easier to track, as well.
Most e-payment solutions provide a dashboard, as well. That allows you to analyze payments over time, track down payments vendors claim they didn’t receive, and look for discrepancies between payments and items received.
One of the biggest pain points in vendor management is inconsistencies between invoices and items received. These inconsistencies are compounded by paper receipts that are hard to track and take time to record, file, and organize. Moving to electronic invoice payments can help reduce the time you spend tracking down missing items (or dollars) and simplify your accounting processes.
3. Track Vendor Prices Over Time
Because vendor prices can often change with the market, it can be difficult to spot when prices are rising significantly and if you need to find a new vendor as a result. Tracking prices over time through electronic payments and building a report can show you changes over time. It can also help you relate changes in prices to changes in food costs and labor costs as well.
A restaurant management software solution can also help you track vendor prices. And it can help you compare prices across vendors so you know you are always getting the best price.
4. Schedule Payment Dates Ahead of Time
A crucial aspect of managing vendors is ensuring payments are sent on time. Set a schedule for vendor payments (like on the 1st and 15th) and schedule them ahead of time to ensure you don’t miss any payments. If you’re using a solution like MarketMan, you can streamline that process by scheduling payments in bulk.
Common Mistakes in Vendor Management
When you’re managing a restaurant, there are so many different things to pay attention to — and vendor payments can fall through the cracks easily. Some common mistakes include
- Late Payments: There is never a scenario where a restaurant relies on a single food vendor. Most restaurants use a host of vendors to supply different types of ingredients — from produce to dairy to liquor. With orders arriving at different times with different items, it can be easy to lose track of payments without automation.
- Inconsistent Ordering: Staying on top of your inventory can be difficult, and without a constant watchful eye, your pantry can fall below par levels and result in inconsistent or late ordering.
- Poor Accounting: If you’re tracking orders, invoices, and prices by hand, it’s easy to forget to carry the ones or add the remainders. Even in a spreadsheet, human errors can accumulate quickly.
- Inefficient Ording: Without a way to track prices over time, you might not be getting the best price for your inventory items.
Those types of mistakes can happen to anyone — and can silently drain your finances at the margins. Inefficient orders can lead to the inability to meet your customer’s demands, and late payments can lead to compounding fees and strain your vendor relationships. Without proper vendor management, you may be scratching items off your menu early — or worse, losing money on high-price ingredients.
Implementing a Vendor Management Solution
Managing your vendors can be a full-time job, easily. Luckily, there’s a better way: implementing a vendor management solution can help you save time, optimize your processes, and automate your ordering.
What to Look For in a Vendor Management Platform
A restaurant vendor management platform can help you unlock insights about your operations, inventory, and even your menu prices based on the information you receive from orders and invoices.
To ensure you’re getting the most out of your vendor management software, you should look for the following features:
- Invoice and Order Tracking: Above all else, your solution should track invoices and orders as they come in from vendors.
- Online Payments: Submitting payments electronically can help cut down time, reduce errors, and highlight discrepancies.
- Inventory tracking: Matching invoices to inventory can help you calculate and track your costs quickly, accurately, and efficiently. When you receive an order, you can update your inventory immediately.
- Accounting Integrations: Integrating your vendor payments with your accounting software can ensure you’re always using accurate data in your books.
MarketMan’s Vendor Management Solution
MarketMans’ all-in-one platform can help you manage vendors with ease. You can track all bills in one place, choose what bills to pay and when, and even automate orders based on your inventory levels.
You can track vendor prices down to the recipe and ingredient level, as well, allowing you to optimize menu items and prices. MarketMan integrates with all major food distributors, POS systems, and accounting software so you can rest assured your solution will be plug and play.