The restaurant sector is no stranger to change. As the industry adapts to artificial intelligence (AI) developments, tech overhauls, and a transforming landscape from sit-down establishments to fast casual quick service, so must restaurant operational processes change to account for new methods of conducting business.
These adaptations impact the data that restaurants need to reconcile on a daily basis. For restaurants, third-party delivery service providers (DSPs) can hold two truths at once: they can help transform the restaurant sector by boosting revenue and broadening the customer base, and they come with distinct financial reconciliation hurdles stemming from inconsistencies in data among delivery platforms, bank transactions, and point-of-sale (POS) systems.
These inconsistencies require restaurants to devise a process to efficiently and effectively reconcile data daily, often involving resource-intensive reconciliations completed manually in Excel, where the majority of time spent is in extracting and matching transactions instead of researching issues, which often leads to a significant number of write-offs. Due to this, many restaurants are investing in solutions that help streamline and automate the financial reconciliation process.
Forvis Mazars hosted a webinar with Stephanie Sisel, vice president of operational accounting at KBP Brands, where she shared her experience working with Forvis Mazars and Trintech, an award-winning software as a service (SaaS) company, to help them meet their business needs as they continued to grow through process improvements and technology automation.
Based on the webinar, this article will delve into the steps that KBP Brands took toward automation. The company started with determining its need for automation, looked at its current state to inform their business case, planned for automation, implemented the technology, and noted challenges that could occur from a data perspective.
KBP Brands
KBP Brands owns and operates four iconic quick-serve restaurant brands: KFC, Taco Bell, Arby’s, and Sonic. KFC is the company’s longest running and largest brand, which operates nearly 800 stores. The company also operates approximately 50 Taco Bells, 120 Arby’s restaurants, and 90 Sonics. The total franchises span 32 states and boast more than 21,000 employees.
Sisel discussed how the company works with four separate POS systems dictated by the franchisor for each restaurant brand. “While the accounting is similar between KBP Brands franchises, they have differences that drive the need for specific reconciliation for each brand,” she said.
In addition to reconciliation differentiations, KBP Brands’ business has grown significantly due to expansion and the introduction to DSPs during the COVID-19 pandemic. Delivery became a popular method to obtain food from establishments during 2020 lockdowns: in fact, delivery made up nearly 5% of KBP Brands’ business and continues to grow exponentially today across their brands.
For those reasons, KBP Brands’ reconciliations became more complex and numerous over a short period of time. Sisel shared that a push to pursue automation at their company was threefold: 1) they needed to find better processes to reconcile data with DSP files more frequently than on a period basis, 2) automation could help mitigate risk, as several people within their brands were touching revenue and revenue reconciliation processes daily in Excel, and 3) manual processes that took up employees’ time could yield hours saved with the proper implementation of automation.
Thus, her team worked with Forvis Mazars to utilize Cadency Match and Certification and develop a plan to rollout the new tool across the various brands. Ultimately, KBP Brands decided to divide its project plan into phases, since going live with all four of its brands simultaneously would’ve been difficult. The first step was looking at the company’s KFC data. “Understanding your data sources and fields used and considering how you extract and validate data will help determine your success or failure in automating your reconciliation,” Sisel said. She encourages other restaurant executives to view the most granular level of data and then scale up to how you want to see the data in automated reconciliations.
For example, there are four different quick service brands with varying POS systems that KBP Brands must account for. Reconciling this data varies from each brand as some POS systems recognize delivery markup and promotions while others do not. It was crucial for Sisel and the team to look at how they reconcile from POS to cash for each type of POS transaction. These differences impacted sales, tax, and operating expenses. To cover all the fields needed for reconciliation, KBP Brands had to merge POS files, i.e., a transaction and tender files. In addition, the data needed to be validated and standardized from POS at the stores so that the reconciliation started with clean data.
Extracting the data came next. Sisel worked with the team at Forvis Mazars and used Trintech data flow services to pull the needed bank files when testing with KFC (KBP works with 85 financial institutions and an estimated 200 bank accounts for their bank files). Before automation, KBP Brands teams were logging into each of these banks daily and pulling the activity. After automation, they have consolidated their banking activity to one file, which gave the company immediate time savings.
KBP Brands worked with Forvis Mazars to apply Trintech’s Cadency tool specifically related to the Match and Certification processes. Together, KBP Brands and Forvis Mazars helped design and configure match rules within Cadency that automated the matching of transactions (instead of KBP Brands employees compiling data from each store daily). Sisel’s team is using the tool to correct master data inconsistencies (such as tax rates) and enable a detailed three-way match (from POS system to processor file and then processor file to bank). The team configured approximately 100 match rules within the Cadency tool to significantly decrease the daily time needed for transaction matching, allowing for timely management of exceptions rather than deferring them until the end of the period. Cadency also helped them conduct more real-time reconciliation, decrease manual compiling of data, and save hours of time.
At present, KBP Brands has gone live with the Cadency tool at Arby’s. The company chose this brand so it could learn best practices that could be applied to KFC, its largest brand (and likely its next process improvement target). Sisel says the company has already seen efficiencies with the first brand live; her teams used to view about 40 transactions daily (on the cash reconciliation side). With Cadency Match, they’re now viewing five or fewer transactions daily. KBP Brands is planning to move all of its brands onto Cadency and working step by step, as each brand has its nuances.
Case Study
In another instance, a multistate, multilocation restaurant reaped similar benefits from automation as KBP Brands. Its Trintech product decreased the company’s reliance on external vendors and the cost of those vendors, leading to significant time and cost savings. Manual processes and manual manipulation of files decreased once the team understood how to map out what they wanted to build inside their reconciliation tool. Automating reconciliations and matching data freed the team from time-consuming reconciling, allowing them space to improve other processes and focus on growth.
How Automation Can Help Your Business
Modern finance teams are driving incremental value through organizational change, process re-design efficiencies, analytics, and automation. As illustrated above, adopting automation for various processes can help restaurants streamline their operations and improve efficiencies. We know that change can be an obstacle, and we are here to help your business every step of the way.
Our CFO & Business Consulting team stands ready to help your company solve its complex business problems through customized technology-enabled strategies, accelerating your business into the future. For more information on Trintech products or automation tools, please reach out to Cheryl Levesque at Forvis Mazars.