Large Restaurant Operators Lament Payment, Ordering Delays With Non-Digitized Small Suppliers

The restaurant industry has been notoriously slow to adopt new technologies. Even as consumer-facing routines such as ordering and payment rapidly digitized during the pandemic, processes behind the scenes have remained mostly manual for many restaurants. Yet even for forward-thinking restaurants that have taken advantage of the digital tools available to bring their operations online, there is only so much they can do. After all, for B2B transactions, digitization is a two-way street.

Brandon Stewart, president and chief operating officer at Kensington Hill Capital, which owns and operates 55 Jimmy John’s locations across Alabama, Florida, Georgia and Ohio, spoke with PYMNTS about the challenges that the franchisee faces in trying to maintain digital efficiency in an industry whose supply chain can be stuck in the past.

“I think our electronic ordering systems are dated — trying to order product and things like that,” said Stewart. “If it’s from a major distributor, you don’t have a problem, but there are all these ancillary things that you need in stores … Even if [you’re ordering] online, it’s still multiple websites, and we don’t have an efficient way for our guys to get us those orders centrally.”

In a moment of fortuitous timing, the company automated its operations with a digital restaurant management platform shortly before the pandemic hit, such that payment processes were already digital at a time when restaurants were scrambling to turn any kind of profit. Stewart noted that, in comparison shopping for different tech products, he landed on Restaurant365’s solution after noting another franchisee’s success with the company’s software.

“It just made our back office more efficient,” he said. “We were thinking that we might have to hire somebody else to handle [those processes], and all those thoughts went away when we went to more of a digital back office.”

In June, Restaurant365 acquired Compeat, a company known for its restaurant back-office, workforce and business intelligence software. The combined company serves over 28,000 restaurants, and its products include tools to digitize accounts payable (AP), accounts receivable (AR), inventory management and payroll, among others.

Read more: Restaurant365 Buys Compeat To Boost Restaurant Back Offices

For all the digital upgrades that Kensington Hill Capital has made, however, it is still subject to the limitations of dealing with other businesses and institutions. Stewart noted that local governments often still use paper mail, such that dealings with these offices for matters such as business licenses can be a headache.

“I think that’s probably my biggest pain point in the back office,” he reflected.

By having its operational processes digitized, Kensington Hill Capital is ahead of the curve.  Bhavuk Kaul, CEO of Plate IQ, which creates AP automation tools for restaurants, among other products, told PYMNTS in an interview that many restaurants still operate primarily through pen-and-paper accounting.

“Before us, restaurants were manually uploading invoices and pushing them to a manufacturer’s platform,” said Kaul. “We are trying to automate a lot of those back-end processes … For us, the biggest challenge has always been awareness — people are not aware that technology like ours exists.”

See also: Plate IQ Automates Restaurants’ Back-of-House Operations to Save Time, Cut Costs