Optimizing AP Operations for a Multi-Location Hospitality Group with Invoice Processing Outsourcing

Optimizing AP Operations for a Multi-Location Hospitality Group with Invoice Processing Outsourcing

The client is a U.S.-based hospitality group that manages eight restaurant locations across the East Coast. Each restaurant had its own unit accountant responsible for managing financial tasks like invoice processing and vendor coordination.  

However, seasonal fluctuations, inconsistent vendor pricing, and staff bandwidth issues made AP management increasingly difficult. The client decided to outsource their invoice processing and pricing updates to ARDEM to improve efficiency, accuracy, and scalability.

The Challenges the Client Faced

1. High Seasonal Invoice Volume

Several restaurants were located in resort areas, where business volume spiked drastically during the summer. Sales during peak season increased up to five times the normal levels. So, during peak periods like summer vacations and holidays, invoice volume surged.

This overwhelmed the internal accounting team, which already had a unit accountant assigned to each restaurant. It highlighted the limitations of their existing AP operations model.

2. Manual Invoice Processing Despite EDI

Even with EDI integrations in place for major suppliers, manual review and correction of invoices were still required. This was due to frequent data mapping issues, system limitations, and occasional technical errors in automated invoice feeds. The AI provided by Restaurant365 also failed to improve invoice accuracy over time.

3. Operational Complexity Across Unique Concepts

Each restaurant operated as a separate unit with its own accountant, inventory setup, and POS data. This made it difficult to standardize invoice workflows or centralize operations. Everything functioned as an exception, requiring constant manual oversight and customization.

4. High Payroll Costs

Payroll expenses were disproportionately high, reaching up to 48% of revenue—far above the company’s goal of 35%. These costs were inflated due to a large in-house support structure, the heavily manual nature of accounting tasks, and the additional need for interns and temporary hires during peak seasons.

5. Overextended Internal Teams

Each restaurant had a dedicated unit accountant, many of whom lacked formal accounting backgrounds. These team members handled daily sales reconciliation, bank deposits, data entry, and more. While committed, they were stretched thin, and the structure was labor-intensive, costly, and unsustainable for scaling the business.

6. Vendor Price Inconsistencies & Unit of Measure Issues

Vendors offered similar products under different brand names and packaging. This created discrepancies in unit pricing and measurements. It led to incorrect invoice entries. As a result, AP operations were often plagued with mismatches and errors, delaying invoice approvals and payments. 

7. Internal Resistance to Change

Restaurant managers and operations teams often resisted process changes, primarily because they were focused on guest-facing tasks and did not want additional administrative burdens.

Investors involved in the business also had differing priorities—one favoring financial transparency and structure, while the other focused solely on operations and discouraged inventory tracking.

8. Ineffective Use of Technology

Despite significant investment in systems like Restaurant365, the company had not yet realized the expected time and cost savings. AI tools underperformed, and EDI and Fintech integrations did not translate into measurable efficiency gains. The lack of consistent system uses and staff training further limited the impact of these tools.

9. Past Outsourcing Failures

A previous outsourcing initiative failed due to poor communication, language barriers, and a lack of understanding of the company’s internal processes. The assigned personnel struggled to adapt, and the team member leading the effort internally lacked the communication skills to bridge the gap, leading to the abandonment of the partnership.

10. Manual Price Update Process

Food and goods prices changed weekly across vendors. The client lacked a structured process to manage timely updates in their procurement system (Compeat).

11. Scalability Challenges

The client was preparing to launch a 9th restaurant location and needed an AP outsourcing partner who could scale quickly without increasing headcount. 

Why the Client Partnered with ARDEM

The client sought to offload the repetitive tasks to focus more on strategic finance roles, which led them to explore invoice processing outsourcing as part of a broader business process outsourcing services initiative.

1. Scalable Invoice Processing Outsourcing Services

ARDEM offered a flexible resource model that could scale up or down based on weekly invoice volume without fixed FTE constraints.

2. Deep Understanding of Restaurant ERP Systems

ARDEM has experience working in Restaurant365 and Compeat, ensuring smoother integration and accurate invoice handling.

3. Process Improvement Mindset

The client needed more than a processing vendor—they wanted a partner who would flag discrepancies, suggest improvements, and bring structure to chaotic AP workflows.

4. Expansion Readiness

With plans to onboard EFT payment processing and new locations, the client required a partner who could support growth with minimal onboarding.

How ARDEM Solved the Client’s Problems

1. Centralized Invoice Processing Across Locations

The client was struggling with fragmented invoice processing across eight different restaurant locations. ARDEM began by taking over end-to-end invoice processing outsourcing tasks. We processed 450–500 invoices per week across all 8 restaurant locations. We improved speed from 30–40 invoices per day to 100+ invoices per day within three weeks.

We used PDF-to-Excel tools (like PDF24) for VLOOKUP-based validation of line items. We ensured each invoice was handled in alignment with client policies, eliminating the burden on individual staff accountants.

2. Scalability to Handle Volume Fluctuations

Invoice volume spiked during holidays and vacation periods, especially around times like Independence Day. ARDEM’s service-based model allowed flexibility in manpower—scaling the effort from 400 to over 500 invoices per week, with daily improvements from 30–40 to 100 invoices per day over three weeks.

Our ability to allocate additional resources as needed helped ensure timely processing, even during peak periods.

3. Improved Accuracy in Unit Pricing and Measures with Weekly Price Updates

A major challenge involved discrepancies in unit prices and measures due to inconsistent vendor formats. ARDEM further improved AP operations by taking ownership of vendor price updates. ARDEM tackled this by developing a system for cross-verifying missing information using vendor websites.

We also created a weekly calendar and strict time slots for these updates, ensuring the Compete ordering platform used by the restaurants always reflected current prices. This led to systemic improvements and eventually became the benchmark process for the client’s in-house team as well.

4. Smart Use of Tools to Save Time

To avoid time-consuming manual data entry from PDFs, ARDEM employed internal tools such as PDF24 to convert files into Excel for faster processing using formulas and VLOOKUP. This dramatically reduced manual labor while maintaining accuracy.

5. Transparent Communication and Issue Resolution

To increase visibility, ARDEM shifted issue reporting from Excel logs to shared Microsoft Teams channels, fostering collaborative learning. We flagged mismatches in item pricing, units, and system data.

Our team worked closely with the client’s controller to correct systemic issues in Restaurant365. By flagging discrepancies openly, the team enabled faster resolutions and more consistent standards across all eight locations.

6. Continuous Improvement and Collaboration with Client

The client’s controller was highly supportive, regularly providing input and helping implement ARDEM’s suggested process improvements. We shared daily reports on invoice status, pending issues, and completed tasks.

We held weekly calls to review issues, track KPIs, and align on improvement plans. This close collaboration resulted in better integration between outsourced and internal teams.

7. Expansion Readiness

Impressed with the improvement in efficiency and accuracy, the client entered discussions with ARDEM to expand the scope of business process outsourcing services. The client requested ARDEM to manage a 9th restaurant’s invoice processing from launch.

Our discussions are underway for EFT payment processing once vendor credential access is resolved. Flexible service-based pricing allowed ARDEM to expand the team as volume increased without contractual FTE restrictions.

How the Client Benefited from ARDEM’s Services

✅ Faster Invoice Turnaround 

Improved invoice processing from 30/day to 100+/day with high accuracy, enabling timely vendor payments.

✅ More Efficient Use of Staff Accountants

The client’s in-house team now focuses on strategic finance tasks rather than manual data entry.

✅ Improved Vendor Price Accuracy

Weekly price updates and discrepancies flagging improved inventory costing and procurement decisions.

✅ Structured Process for Future Scaling

With new restaurant locations and additional AP services on the horizon, ARDEM established the operational foundation to support the client’s growth.

✅ Collaborative Relationship & Continuous Improvement

Client’s controller actively engages in process reviews and supports optimization efforts, creating a true partnership model.