Roger Gregg, co-founder of Lightyear and publican with venues in Australia and the UK, shares why he and Chris started Lightyear and why every hospitality business needs to be investing in payables automation
"We quickly realised that the cost of processing paper bills is huge, but you won’t see the cost to process paper bills as a line-item on your P&L, but the cost is there, in wages and salaries, office space, storage space, unidentified supplier overcharging etc"
- Price checking.
- Data-entry in Point of Sale.
- General Ledger coding.
- The approvals process.
- Credit note management.
- More data-entry into accounting software.
- Chasing missing bills.
- Supplier Statement Reconciliation.
- Stock-take variance resolution due to errors.
- The cost of the desk of the person/s doing the data entry.
- The cost of the filing cabinets.
We quickly realised that the cost of processing paper bills is huge, but you won’t see the cost to process paper bills as a line-item on your P&L, but the cost is there, in wages and salaries, office space, storage space, unidentified supplier overcharging etc. The list goes on.
Lightyear is different from anything else in the market. Lightyear is the world’s fastest Accounts Payable software. It offers:
- Real-time line-by-line data extraction, so no more data-entry
- Automatic price-checking, so no more overcharging
- within a customisable approvals workflow, so no more paper shuffling or lost bills
- Automatic supplier statement reconciliation and error handling, so no more time-consuming manual reconciliations
- and online archive storage for 7 years, so no more, well...filing cabinets.
But the reason that Lightyear has become so successful so quickly is not just due to its benefits and features, but because of how absolutely simple it is to use.
Firstly, supplier adoption is a breeze. All a supplier needs to do is email you their standard bill, straight out of their system, to your dedicated Lightyear account - email@example.com, for instance. The supplier will continue to send paper with the delivery of stock, but in parallel, they’ll simply email you a PDF copy of the bill. It costs the supplier absolutely nothing and there are no installation requirements on your supply chain.
But secondly, from a venue and finance team’s perspective, it is simple. And we mean crazy-simple. Lightyear has been designed to mimic the flow of a paper bill through an organisation. In real-time, bills get presented to individual chefs or managers (or whomever) for approval, before immediately transitioning to General Managers / Finance (or whomever) for Sign-off, after which bills/credits/data gets written to Accounting Software (and inventory systems if required), and dropped into an online archive for the regulatory period.
All bills, immediately available for managers, directors and finance teams to access from anywhere. All bills, automatically price-checked against your agreed supplier pricing.
Want to know how much was spent on food last week? Or, when did you last buy champagne flutes, and what was the product code? All information immediately and easily accessible to the venue team, without the need to access the accounting software.
Lightyear isn’t only an invaluable tool for finance and business owners - it is also a hugely important tool for venue managers. Here are 3 examples of tangible and immediate benefits to that hospitality group we were working for.
Price-checking of food deliveries - increased Gross Profit
By loading up the cost per kilo/unit of our 20 most commonly purchased proteins (220g salmon, 250g rumps, 180g burger patties etc), the group identified $19k of overcharging in a 3-month period - call that $75k (£38K) per annum - that correction increased food GP by 0.4%.
In addition, removing the need for chefs to manually price-check (an exercise which obviously wasn’t working as it should), saved 1,500 hours per annum, which meant 1,500 less casual hours, which equated to $35k (£17K) per annum. That saving reduced labour as a percentage of turnover by 0.4%. All up, implementing Lightyear improved food margins by 0.8%.
Beverage stock-takes - improved Gross Profit and less Stock on Hand
Whilst price-checking of beverage did result in a small increase in beverage GP of 0.2%, the main savings and benefits were seen during stock-takes. Lightyear allowed our Operations Managers to automatically keep stock-systems up to date with deliveries. There were now no data-entry errors, which resulted in stock-takes becoming faster and more accurate, but it also resulted in more than 4% reduction of stock-on-hand levels. By having our inventory systems up to date, managers were able to order more accurately, and stop erring on the side of caution. That resulted in there being more than $100k (£50K) more in our bank accounts, rather than on shelves.
Consumables and Expenses - less overspend
By allowing managers to see in real-time what they were spending on print, entertainment or advertising for instance, managers were less likely to overspend. They were no longer tracking expenditure on spreadsheets. Lightyear allowed them to see in real-time what they had spent, and to budget better.
All up, implementing Lightyear resulted in direct savings in food and beverage to the tune of close to $200k (£100K), it also allowed Head Office to reduce their head count in Accounts Payable by 4 to 2, resulting in a further $150k (£75K) of savings. All up, Lightyear generated savings of around $400k (£200K), for £0 outlay, and only around $1k (£500) per month.
The beauty with Lightyear is that it offers immediate benefits to decision makers right through hospitality organisations - owners, directors and managers. And with everyone seeing their own benefits (and seeing them quickly), internal adoption is also very smooth.
Too often in the past, we have all signed up for technological solutions, only to find that the cost to implement, maintain and use the system negates any benefit the system might provide. But Lightyear is different, and that is in part due to the huge hidden cost of a manual paper-based Accounts Payable process - costs that become evident very quickly as Lightyear is inexpensively and easily implemented and adopted.
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Alternatively, Roger will be hosting live webinars to discuss this topic further.
Sign up for a webinar below where i will be sharing the secrets behind how my pub the Carrington in Surry Hills, Sydney, Australia, uses Lightyear to control our costs Register below.