Expense Management for the Food and Beverage Industry
Hospitality has been one of the industries hardest hit by pandemic-related changes. Business owners in the food and beverage industry are used to making the most of slim profit margins and unpredictable sales forecasts, but even an experienced owner may be struggling in today’s business world.
Gaining more control over your expenses is critical to maximize the power of each order. The right tools can bring new staff up to speed fast, minimize waste, and help you build stronger plans to keep your kitchens and your books operating smoothly.
Challenges in the Food and Beverage Industry
Many businesses in the food and beverage industry operated on slim profit margins even before pandemic restrictions became a factor in 2020. Restaurants, bars, and catering services have been in a precarious position navigating changing restrictions over the last year. Here are some of the top challenges facing the food and beverage industry.
High employee turnover
Employee turnover at restaurants is 75%, and some fast food establishments see greater than 100% annual turnover. Managing continuous hiring and training is a serious cost concern in food and beverage companies.
Food costs and waste
Half of restaurant professionals rank food costs as a top challenge. When your business depends on something perishable, your profits can spill or spoil in front of your eyes. Food and beverage professionals need tools for easy, clear inventory tracking to minimize waste.
Inaccurate cash flow reports
Hospitality professionals juggle rent, loans, payroll, bills from suppliers, equipment or uniform rental fees, and more on a daily basis. They’re also tracking sales and catering deposits to balance the books. Accurate, up-to-date cash flow is a make-or-break challenge for most small businesses, and especially businesses with as many moving parts as a restaurant.
Fixed costs hold firm for your business, whether you’re operating at 50% capacity, 25%, or carryout only. You still need to pay for rent, essential equipment and software, credit fees, and administrative expenses. You may even be investing in additional furniture, heating and lighting equipment, and decor to create a functioning outdoor space. Food and beverage businesses have to walk a tightrope to price a menu or service that’s profitable, but still attracts customers, especially at reduced capacity.
Top Expense Management Software Features for Restaurant Owners and Caterers
Food and beverage industry professionals need software solutions that cater to their needs. Here’s a few of the top features to look for in an expense management system.
Hospitality businesses need to be able to adjust plans at a moment’s notice. That’s not only true when an unexpected party arrives hoping for a table. The food and beverage industry has been more unpredictable than ever as state guidelines change.
Even finance professionals and bookkeepers can miscategorize expenses in the general ledger. Look for expense management software with clear, customizable categorization features so you can capture inventory and expense reports accurately.
You’re managing hundreds of receipts from customers, vendors, and suppliers. Capture expense-related receipts with a click of your smart device’s camera and let your expense management system automatically assign it to the correct category for easier, faster, more accurate reporting.
Built-in travel management
Not all food and beverage operations happen in a restaurant. If your staff are traveling for events or to launch new markets for say you food delivery app, it’s critical that the expenses occurred through business travel are synced right into your usual expense management system. Look for a solution that can deliver expense tracking, policies, card management, and travel bookings on one cohesive platform.
As Todd P. from DoorDash reports, TravelBank is “great for corporate travel. Simple and straightforward. Takes the guessing and headaches out of traveling for work.”
Expense Management Software Benefits
Effective expense management can result in steadier operations for your entire business. Focusing on improvements in this area can ripple outward to reduce stress for managers, finance employees, and service staff. Choosing a system that’s well-crafted to your industry’s needs can benefit critical areas of your business.
Improved training processes
A clear, simple expense reporting system makes it easier for new employees to get up to speed. In an industry with high average turnover rates, it’s important to choose tools that are easy for newcomers to learn.
More stable cash flow
A cash flow problem can sink your business. Fluctuations in weekly or even daily sales could signal the need for a budget adjustment. Eliminate manual reporting and get updated information at your fingertips so you can respond to changes and maintain healthy cash flow.
Tracking sales and inventory more accurately improves your ability to predict upcoming supply needs. This helps avoid unnecessary orders and reduce waste, preserving as much profit as you can.
Cost control has always been a key concern for business owners in the food and beverage industry. Choose expense management software with the same care you give to selecting the freshest products. A clear, accurate expense reporting system can make a meaningful impact on your daily operations.