How Procurement Software Helps Restaurants
What is Procurement Software?
Procurement software is software that helps businesses organize the process of purchasing supplies. The software will usually include tools that make it easy for companies to make and receive orders, communicate and coordinate their contact with different suppliers, and provide records of all previous orders.
The software will often integrate with other tools a business uses, such as inventory management or POS systems, to provide the company with a streamlined way of managing inventory.
Using a software solution to take care of procurement can be an improvement over doing so manually. This is because procurement software streamlines the ordering process, saving managers or business owners time and potentially money.
How Procurement Software for Restaurants Works
Restaurants that want to use procurement software should connect to their suppliers through the software. This enables them to make and manage orders. Here is how it works.
Step One - Import Supplier Catalogues
The first step to setting up procurement software for a restaurant is to import supplier product catalogs. By doing this with all the suppliers you work with, you'll be able to see the most up-to-date information all in one place and create unified orders from various suppliers.
You can also use the tool to request product information from new suppliers. This can be useful if you are worried about relying on a small number of businesses or if you want to add a new item to your menu but it's unavailable at your existing suppliers.
Step Two - Search for Products and Create an Order
You can then search the catalogs from within the procurement software for the specific ingredients your restaurant needs. Add items you want to buy to your order list. The software will create a single order with a running total for each supplier, so you know exactly how much you are set to spend.
If you are likely to make an order repeatedly, you can create custom order guides to use when you need to restock. If necessary, you can set the software up so it sends this guide out at predefined times.
Step Three - Send the Order
Once you are happy with the order, review it and use the software to send it to suppliers. Even if you are dealing with multiple companies, you'll only have to create a single order. The procurement software will automatically send them out to individual businesses.
Step Four - Keep Up to Date
Restaurant managers can keep up to date with the order by tracking it from within the procurement software dashboard.
From the dashboard, you can see a record of all your orders, including what exactly you have bought, how much it cost, as well as when each order is expected to arrive. If there are any problems, such as if you notice you have under or over-ordered a particular item, you can contact the suppliers to fix the issue as soon as you see it.
Step Five - Accept the Order
When the order arrives at your restaurant, the software will automatically accept it so you have an accurate record of your inventory. If you notice there are errors, such as missing or damaged items, you can manually adjust the order to reflect the actual amount of each ingredient received. Doing so helps you keep accurate records of inventory.
Step Six - Sync with Data from Your Other Tools
You can use the data from your inventory and POS systems to create more accurate orders. The procurement software will make suggestions about which ingredients and how much you should order based on the amounts you have at hand and how much you regularly use.
Step Seven - Check Historical Records
The final step is to keep an eye on your ordering records. Doing so enables you to track expenditure so you can budget more effectively. You can also spot when you may be overspending and use this information to either adjust orders or search for new suppliers.
Your procurement software may also provide insights into price changes so you can quickly see how items are increasing (or decreasing) in price and decide what steps to take. For example, you could use the procurement software to search for a new and cheaper supplier or adjust your menu prices to reflect the more expensive ingredients.
How You Benefit
Procurement software benefits restaurants in several ways.
Restaurants have several ordering challenges as they frequently buy large amounts of perishable goods. The fact that this stock quickly becomes unusable means restaurants need to have a way to ensure they are ordering enough of each ingredient to satisfy demand without ordering too much.
Restaurants that over order risk the items becoming unusable. This can eat into what are often already tight profit margins. Estimates suggest that preventing waste can cut a restaurant's costs by between 2 and 6 percent.
On the other hand, restaurants unable to satisfy demand because they have run out of a product will create less waste but are more likely to provide a poor customer experience.
Here are some specific ways that procurement software can help restaurants.
Save Time When Ordering
Restaurants often have multiple suppliers. One of the problems this causes is that putting in separate orders for each supplier can be time-consuming.
Procurement software simplifies the ordering process in several ways. Restaurant owners can connect with each of their suppliers through the software so they can see up-to-date catalogs of available ingredients, alongside information about the products they order often.
Managers can then use this information to create orders that purchase from multiple suppliers as if it was a single order, ultimately saving time. While the purchases are made together, pricing totals are listed by the vendor so restaurant owners have an accurate idea about how much they are spending with each supplier.
Create Order Guides
Another way restaurants can save time is through order guides. Once a restaurant has a good idea of how much of each ingredient it needs to satisfy demand, orders will often not vary much from week to week. Because of this, procurement software will usually include the ability to create order guides.
Restaurant owners can save these guides and send them off at regular intervals. By taking care of these orders automatically, procurement software helps free-up time for managers to focus on other parts of their job.
Keep Optimal Inventory Levels
We have written a lot about how important it is for restaurants to manage their inventory effectively.
When restaurant owners receive a purchase using procurement software, it automatically updates inventory. This ensures they always know how much stock they have. It stops owners from ordering too much, which can lead to wasted food or money, or too little, which can lead to being unable to fulfill demand.
Make Order Suggestions
Another way procurement software helps keep optimal inventory levels is by combining data on sales and ingredient usage. With this data, the software makes suggestions about how much of each item restaurants need.
Reduce Reliance on Individual Suppliers
While you may already have suppliers you are happy with, there are a ton of different companies out there.
Procurement software allows restaurant owners to search for new suppliers and import their catalogs into the system. This can be useful for menu changes, to prepare for late deliveries, or simply for the knowledge that you always have extra options should something go wrong with an existing supplier.
Keep Track of Food Costs
Restaurants must keep food costs at a sustainable level. Alongside labor, food is one of the restaurant's biggest expenses. Keeping track of price increases is one way to keep your food costs in check.
Procurement software provides visibility here by tracking price changes over time for every item you order. If you notice a crucial ingredient has gone up in price an unacceptable amount, you can search for a supplier at a more reasonable price.
Good procurement software enables users to track all orders made through the app. By showing the status of all orders in the dashboard, managers can gain a good overview of when different deliveries are set to arrive, helping with planning for the week ahead.
This has the extra benefit of making it easy for managers to keep track of how much they are spending. They can navigate historical transactions to see weekly costs, highlighting opportunities to reduce expenditure.
Features to Look Out For
To ensure the above steps all work, there are several features you should ensure your procurement software has.
Choosing cloud-based procurement software ensures that whenever you make an order or adjust ingredient levels, these changes are reflected instantly with all other users. It also enables integrations with other tools and helps provide you with up to date reporting.
Integrates with Other Tools
Procurement software should work well with your other tools, especially your inventory software. By combining the data from these systems, you'll be able to get a better overview of how much stock you have, how quickly you use it, and how much you need to order.
Works on Existing Mobile Devices
Procurement software that works on mobile devices makes it easy to update and create orders on the go. Instead of having to use a computer to accept orders, you can do it as soon as you receive it.
Additionally, by working on the smartphone you already own, it means you won't have to purchase any additionally (expensive) hardware to track your orders.
Procurements software makes ordering supplies easier. It lets restaurant owners order all their supplies from a single dashboard, potentially saving time. It also gives them higher visibility into price changes and how much they are spending which can lead to food cost savings.
Finally, procurement software can be part of a restaurant's overall process of inventory management, helping reduce waste while ensuring all items are stocked.