Finding Clarity in a sea of Disruption:
The financial tools operators need to make decisions now.
As we head into the final quarter of 2022, the foodservice industry is facing extremes on several fronts. Inflation and the still-disrupted supply chain are affecting margins already pushed to the brink. The cost of food and other supplies has risen sharply; labour is still in short supply. On the other hand, consumer savings are at a previously unheard-of level, and the Bank of Canada expects Canadians to spend a quarter of those extra savings over the rest of 2022 and 2023.
Canadian foodservice operators can expect to see a significant portion of those savings head in their direction. Which is all to the good: struggling with high supply prices, low margins, and possibly even pandemic-assumed debt, foodservice operators can use the help. With pent-up demand moving dollars toward restaurants, there are handy financial tools and services available to guide operators and help improve profitability. Here are three financial services that can help in more ways than you might think.
Interact: MORE THAN JUST PAYMENTS
interac.ca
Canadians have known and trusted the Interac name since 1984. The cooperative venture between Canada’s major financial institutions gave Canadians wide access to their own money via a single, shared network. In 2018, Interac Corp was formed to bring the many Interac-branded products and services together, from ABM withdrawals through mobile payments, and even international solutions. Secure, reliable and efficient, Interac allows Canadians to have confidence in their digital transactions.
Most of us know Interac best as the ‘debit’ payment option. A leader in Canadian payments, Interac offers merchants the lowest cost option: every transaction costs a single small fee, regardless of the size of the purchase. Operators keep more of the total bill, since the transaction cost is fixed rather than a percentage of the cheque total. It’s worth asking guests if they’d like to pay with Interac. And, Canadians use Interac at restaurants—29 per cent of all Interac transactions last year were at quick-service restaurants.
But Interac has more to offer. Not just for personal use, Interac e-Transfer also has several business applications. Operators pay employees and vendors instantly, even high-limit transfers. Payments are sent and received in real time, with instant confirmation, making cash flow management easier and more complete. Interac also offers a secure, one-step e-commerce payment option for online purchases and check-outs.
Interac isn’t out there advertising that operators get a card,” says Tricia Ryan, Manager of Strategic Initiatives with Restaurants Canada. “They support small businesses by enabling financial literacy as well as securing them against fraud.” Interac is serious about the safety and security of its users and has created downloadable resources like security briefs and checklists for small business use. With world-class technology and techniques, Interac uses advanced and modern tools to secure your business at the point of purchase, whether that purchase is in person or online.
Interac isn’t out there advertising that operators get a card,” says Tricia Ryan, Manager of Strategic Initiatives with Restaurants Canada. “They support small businesses by enabling financial literacy as well as securing them against fraud.” Interac is serious about the safety and security of its users and has created downloadable resources like security briefs and checklists for small business use. With world-class technology and techniques, Interac uses advanced and modern tools to secure your business at the point of purchase, whether that purchase is in person or online.
A collaborative effort from the very beginning, Interac fosters and supports small businesses with partnerships, contests and publicity, raising awareness and promoting the brands, culture, and community that make small businesses so vibrant and inspiring.
TABLZ: OPTIMIZING YOUR SPACE
tablz.com
TABLZ CEO and co-founder Frazer Nagy has a family farming pedigree, a degree in International Development and Economics, and started working in restaurants at the age of 13. His tenure in foodservice gave him a lifelong fascination with the origin of food and the farm-to-table phenomenon.
As a precursor to his Master degree, he convinced the owner of the restaurant where worked to let him study five years of sales records, which solidified his interest in econometrics. It also raised a pointed question: Why was the restaurateur making such a small margin? “As a 22-year-old bartender, I was making 20 per cent in tips,” Frazer says. “The owner was taking home 3.6 per cent.” That discrepancy planted a seed.
Two concurrent facts aligned to create a new perspective. “First, reports started coming out about consumer savings being at an all-time high. By 2022, restrictions were finally being lifted. People wanted to be out and dining. It was a perfect storm to help restaurants make money.” Frazer’s second epiphany was that the foodservice sector was among the last to enact dynamic pricing engines for revenue management.
Dynamic pricing is the application of a voluntary surcharge for an upgraded experience. Courtside seats that cost more than upper bleachers, for instance. Frazer decided to apply the same model to restaurants, and TABLZ was born. “Foodservice is in the experience business,” he says, adding that the sector is also in the real estate business. “A corner booth at 7 p.m. on a Saturday is worth more than a table near the bathroom at 5 p.m. on a Monday. We help restaurants unlock their most valuable asset.”
TABLZ is a very simple service. “We’re not trying to recreate a table management system.” Instead, TABLZ integrates with a restaurant’s existing reservation system and enables guests to voluntarily upgrade to the seat or section of their choice. If the guest isn’t interested, the reservation system continues as normal. But if they are, they can choose their table for a small premium.
The TABLZ team works with each restaurant to select which seats and sections to feature. When a restaurant signs up, TABLZ sends a 3D camera crew to film the chosen tables in service-ready conditions. The onboarding process is very quick: clients can have the service up and running in a week. “There’s no pressure, and no cost of goods,” Frazer says. “We’re after the 20 per cent of guests who want to upgrade their experience.”
The result is pure profit for the restaurant. “The customer pays upfront, and we put the reservation in the system. If we don’t sell a premium for a table, the capacity is still there and can be used. We’re just optimizing your profitability.”
With team members across North America and restaurant customers in Canada, the U.S., and pending in Europe and the Caribbean, TABLZ is a Canadian technology company with deep ties to the restaurant business. Frazer knows that restaurateurs, burned by other services promising much and delivering nothing, can be skeptical. “This time,” he says. “They’re not being asked to give up anything to get something, like with third-party delivery. We don’t affect operations in any way. We just help them pre-sell their tables for a little bit more.”
TABLZ financial model is profit sharing: with an onboarding cost payable by money collected, restaurants keep 70 per cent of fees, and money is transferred directly to the restaurants every month. “It’s money that’s so meaningful,” says Frazer. “This is the future. Take advantage of the technology.”
XERO: APPROACHABLE ACCOUNTING
xero.com
Xero is a cloud-based accounting platform, designed to help small businesses save time and money. A single, unified ledger system built 100 per cent in the cloud, Xero allows businesses to work in tandem with their account or financial advisor on the same figures at the same time. With more than 300 connections to banks and other major financial partners, Xero connects business to their numbers anytime, on any device.
Xero’s reasonable subscription model allows businesses to pay bills, claim expenses, accept payments, run payroll, track projects and quotes, all while capturing data with which to run detailed analytics. In addition to keeping all your financial records in one place so you can easily get a full financial view of your business, Xero automates tasks like invoicing and reporting. The platform securely imports bank transactions, so you can reconcile your accounts every day and have an extreme close-up on your cash flow.
Toronto-based Aaron Doucet is a Partner Success Manager at Xero. A CPA by trade, Aaron started his career in tax accounting. Having previously worked for a boutique cloud-based accounting firm, Aaron moved to Xero, attracted to the wide variety of its customer base. “Everything from local coffee shops to software as a service.”
Deeply knowledgeable about cloud accounting technology Doucet is passionate about how it can empower small businesses across Canada. “Accounting systems often throw around terms and jargon which aren’t necessarily difficult in nature, but can cause confusion,” he says. “I always look at things from the perspective of an advisor. Xero was built for the owners as much as for advisors.” As such, the language of the platform is very clear and straightforward. ‘Accounts Payable’ becomes ‘Bills to Pay.’
Desktop accounting software can lead to out-of-sync data sets, because the client and accountant work on it at different times. With Xero’s cloud-based accounting, everyone is looking at the same figures. Flexible reporting enables customers to move beyond mere compliance into intelligence. “You can create beautiful financial reports – you can tell stories with the data.”
Built in a way business owners understand, Xero allows for real-time collaboration. “Talking to your accountant in Canada is like a hockey stick,” says Doucet. “It’s super flat though most of the year, but then, during tax time, it skyrockets.” With Xero, owners can engage with their data every day. And as they grow more proficient, their financial literacy improves.
Doucet thrives on setting up the proper technology for small businesses to make the traditionally cumbersome year-end process seamless and efficient. “Our software platform is really primed for restaurants of all formats. We know the last couple of years have been really tough, and we feel that Xero can help illuminate the path forward.”
