Restaurants are already busy adjusting to consumer trends toward mobile payments and a rough transition to EMV payments. But there's also a back office payment problem with slow, costly paper checks and invoices for payments to restaurant vendors and suppliers.
While corporations for years have touted the benefits of converting clunky, paper-based business-to-business payments to speedy digital approaches, restaurants are one of many lagging verticals where old-fashioned methods are cutting into revenues, according to San Francisco startup Sourcery Technologies Inc., which offers a B-to-B payments app for eateries.
Sourcery got its start in 2012 and now serves hundreds of restaurants and food-service providers that use its app to cut time and expense by shifting payments from paper to electronic channels. But an equally important feature of the app is the data it unlocks about the cost of food ingredients and other insights that can help restaurants improve operations, said Na’ama Moran, Sourcery's CEO.
Sourcery users begin by scanning invoices for restaurant supplies, including daily deliveries of fruit, vegetables, other staples and equipment, and uploading them into the cloud-based app, where Sourcery preps them for payment based on the restaurants’ preferred methods and timing.
Many restaurants do receive vendor bills electronically, but the majority of invoices are confined to paper, a longstanding industry tradition that can be difficult to break, Moran said.
“Restaurants are late adopters when it comes to payments, and most get about 250 paper invoices a month from everyone including suppliers of small ingredients and fresh items to major commodity distributors, and they really struggle to stay on top of it all,” she said.
Sourcery changes the payment flow by routing all incoming and outgoing payments into the app, whose accounting software is optimized for restaurants. In many cases there are cost savings available for switching to a more modern payment method, Moran noted. The app also automatically produces trend analysis and insights about spending.
“The other big plus is the visibility restaurants gain from Sourcery with real-time data about how much they’re spending on components for certain dishes and menu items where prices may have fluctuated, affecting profits,” Moran said.
Pricing to use Sourcery varies based on the size of the business, and while it still requires direct input from employees, the app can greatly reduce the amount of time restaurants spend coping with payments by centralizing and simplifying processes.
“Restaurants paying for bookkeeping tend to pay a lot less for that function, and the insights they get through Sourcery can lead to some incredible financial gains,” Moran said. “Sourcery can turn a stack of paper into a list of actionable items.”
Sourcery clients include Portland, Ore.-based Elephants Delicatessen and several corporate foodservice operations, including for the employees of Airbnb and Dropbox. The app integrates with other accounting software and restaurant management applications including QuickBooks, Sage and NetSuite, Moran said.
Sourcery recently took in $5 million from investors that include Marker LLC, Steadfast Venture Capital and Palantir and the company has earmarked the funds for building an accounts-receivable feature for vendors, and for branching into other industry verticals.
Moran, a technology veteran who immigrated years ago from Israel, met the company’s co-founder and product chief, Siberia-born Peretz Partensky, a few years ago while camping a few years ago at the Burning Man festival in Nevada. The pair next plans to expand Sourcery to serve vendors and suppliers serving restaurants and other industry niches, Moran said.
“With the new funding, we’re looking forward to growing our platform’s capabilities and offering our toolset to more verticals in the very near future,” she said.