B2B Payments

Plate iQ And Predicting With Paper

YC-backed Plate iQ thinks they have a way the smartphone can be leveraged against the ever-growing pile of supplier invoices restaurateurs face week in and week out.

“[Restaurants] have this huge problem around invoicing — which is they get a ton of paper invoices. At the restaurant I was talking to, they have about 10 locations, and they have about 300 paper invoices a week,” Plate iQ Cofounder Bhavuk Kaul said. “Food costs make up about 30/33 percent of their total costs, and since food is perishable, the price varies because of seasonality, oil prices and all sorts of things. That affects their margins.”

“The other part is all that data needs to go into their accounting software. So that’s where the genesis of the product started — sitting inside a restaurant,” Kaul added.

Kaul and Ram Jayaraman, his cofounder, turned their attention to leverage the world of smart devices and their capacity to turn paper into images into usable textual information.

Developing from what Kaul called “a bottoms-up approach,” Plate iQ has built its product so that restaurant owners can easily snap an invoice photo with a phone and, via Plate iQ’s software, see that data digitized through optical character recognition and dropped into the startup’s cloud-based dashboard. Once located, that raw input can be turned into structured searchable information.

“We trained the system using some machine-learning techniques early on, which improved it a lot. So we tell the system ‘tomatoes are a type of vegetable,’ and then the system can recognize later on that chili tomatoes also must be a kind of vegetable … Or ‘I know this vendor only sells wine,’ so it’s highly likely that other produce they sell is also wine,” says Jayaraman, explaining how the system works to order the raw data. Users can also quickly manually tag data that’s incorrectly categorized.

With the data rendered, managers in food service will, in theory, be better able to track information over time — food prices for example — all in one source, as opposed to spread out over a series of invoices and spreadsheets. That food cost data likely won’t lead restaurants to radical menu changes but can allow managers to better tailor the selection.

“With us [the chef] can quickly see the real price of making a dish,” adds Jayaraman. “You can add all of the ingredients you want, in all of the sizes you want, and [the software] automatically costs it to him in real time in like a minute. And he can compare should we do a seafood dish today, or a chicken dish, or a veggie dish? And you can also imagine tweaking it — should I put parmesan cheese on it, or maybe can I substitute some other cheese … that might be actually two cents cheaper per dish. And restaurants being a low-margin business literally every cent matters to them.”

Cost management, however, is only part of the Plate iQ vision. The startup is looking toward the future when its software can be used to … well, get a better look at the future.

“Our goal is to get it into the predictable stage, where we can start predicting data and understanding it for them — how much their inventory should be. At what day of the week should they buy?” adds Kaul. “There is a lot of that information we can extract from this data over time. So we’re putting together a group of guys who understand data really well.”

Plate iQ is about a year old and launched its SaaS business in June. At this phase of the game, the firm reports about 65 customers, the vast majority of which are located in San Francisco — though there are a few New York locations as well.

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