restaurant management software

Modernizing your restaurant management software is good for business

By Hamed Arbabi

These days, unpredictable interest rates, ongoing labour shortages, supply chain disruption, and the rising cost of living have created a high-pressure environment for many Canadians, including those working in hospitality.

Between employees, customers, vendors, and operational third parties, restaurants send and receive money frequently, yet one of the biggest hindrances is the ongoing use of conventional payment solutions like cheques and direct deposit.

As the industry is still recovering from the effects of the pandemic, innovation is key as operators look to streamline operations, enhance the end-user experience, and attract top talent.

The good news is that updating the approach to payments through a restaurant management software system (RMS) can be straightforward, resulting in a stronger and more sustainable bottom line, a decrease in administrative labour, and greater employee attraction and retention.

The evolution of RMS

Over the past few years, digital transformation has played an important role in remodeling the hospitality industry. While it may have started with POS systems and customer contactless payment facilitation, restaurant management software systems have expanded well beyond that functionality.

Today, they are an all-in-one solution helping businesses manage everything from payroll and scheduling to gratuity tracking and earned wage access. For restaurants, these all-in-one solutions have become vital in running a successful operation, providing them visibility and functionality through one management system.

Unlocking value through integrated payment solutions

Embedding payment infrastructure into restaurant management systems is a strategic move driven by a commitment to enhance the customer and employee experience. For example, consider Uber’s rideshare platform versus the traditional taxi solution. Both will get you to the same destination, however, Uber is recognized for delivering an enhanced, seamless end-user experience driven by technology and automation.

Integrated payment solutions are quickly becoming a way to help restaurants meet evolving customer and employee expectations, giving them a competitive edge. Embedded payment technology signifies a pivotal shift in the hospitality sector, promising to revolutionize operations and financial management, two longstanding industry challenges.

Innovative software companies are making strides to enhance their core restaurant management platforms through embedded financial solutions. Doing so provides additional value to their customers, including features like instant tip payouts and automated invoice payments.

Simplifying back-end operations

Efficiency is essential in the back-end operations of any successful restaurant. Once-manual processes are becoming automated, simplifying complex tasks like payroll, tip distribution, and payment reconciliations, which reduces administrative burdens, and enables businesses to focus on running their operations.

From multiple food vendors to contract workers like social media consultants and local bands, restaurants can streamline their financial operations through the RMS, processing transactions more effectively. This ensures real-time payments to vendors and instant payouts to employees, allowing for accurate reporting and effortless cash flow tracking.

Empowering employees with on-demand pay

Same-day payouts – the luxury of taking home tips at the end of the night – have long been sought after by restaurant employees. This desire for instant payment has only been amplified due to the increasing cost of living, with 87 per cent of Gen Z and 84 per cent of millennials looking for opportunities that provide same-day payouts. This is likely linked to more than half of Canadians (54 per cent) living paycheque to paycheque.

Some hospitality leaders have recognized the opportunity for earned wage access, a payment solution that allows employees to access their earned wages in real-time instead of waiting for bi-weekly or monthly paydays. This function is especially attractive to restaurant owners who are digitizing tip payouts, which is a challenge for restaurant workers who are used to same-day tip payouts.

For example, some organizations are helping restaurants integrate real-time access to earned wages – a solution already thriving in the U.S. and Europe – as a quick and easy adjustment to payroll functionality. This can eliminate payroll inefficiencies and foster a sense of support among Canadian restaurant workers as they experience the fluctuations of today’s economy.

Instant gratuity payments

Instant gratuity payments to staff also offer a competitive advantage: the ability to provide immediate tips without waiting for cash to be counted. This innovation simplifies administrative tasks like ensuring accurate tip distribution among coworkers, reduces the likelihood of errors when sharing tips, and enhances overall financial security by eliminating the need to store large cash amounts on-site. With this system, employees enjoy numerous advantages, including immediate access to their tips and avoid waiting for reconciliation.

Employees are the lifeblood of any hospitality establishment. When they have easy access to their earned wages and gratuities, job satisfaction increases, translating to higher employee retention, greater engagement, and a more positive work environment for everyone.

Customized payment solutions for modern workforces

Millennials and Gen Z will comprise 72 per cent of the global workforce in just over five years. These generations are redefining how companies pay their employees. A restaurant management system with an integrated payment API (application programming interface) ensures businesses can meet and exceed these changing needs with various payment options.

Whether an employee prefers direct deposit, a prepaid card, or another payment method, the RMS can accommodate their choice, catering to the diverse needs and preferences of the workforce.

The path forward

As labour and consumer markets continue to evolve, the restaurant industry is learning to adapt and reap the benefits. The integration of intelligent payment infrastructure into hospitality software solutions marks a significant step forward in the industry. Businesses are realizing that by prioritizing employees’ financial well-being and simplifying operational tasks, they can offer a competitive edge to their clients and gain a unique point of differentiation for themselves.

As the hospitality sector evolves, expect more innovation in payment processing and financial solutions. By staying informed and embracing these advancements, restaurant professionals can lead the way in delivering exceptional service and ensuring the economic well-being of their teams.

Hamed Arbabi is the founder and CEO of VoPay, offering industry-leading financial technology to software platforms with a focus on the hospitality industry. VoPay’s Fintech-as-a-Service platform embeds financial services and real-time payment capabilities into existing applications, products or services through a single and scalable API.