Exciting news! Xero has released yet another app playbook as part of their brilliant app advisory series. These playbooks are aimed at guiding bookkeepers and accountants through the myriad of pre-integrated and connected apps available within the Xero ecosystem.
This enables them to better educate their clients on the best apps to use for a specific business case (e.g. cash flow management) or in a specific industry (e.g. professional services, or ecommerce).
And this time, Xero has zeroed in on the hospitality sector.
Who are the hospitality apps for?
According to Xero Hospitality app playbook, hospitality businesses fall into two main categories: food and beverage, and tourism and recreation providers.
In the playbook, Xero has further broken down the food and beverage businesses into Short service (cafes / fast food outlets, bars / nightclubs), Long service (restaurants), and Catering (event suppliers, service contractors). Meanwhile, the tourism and recreation providers can be split into Accommodation (hotels and motels), and Arts and recreation (tourism destinations).
The hospitality industry is viewed as “one of the most dynamic and fast-paced industries for accountants and bookkeepers to serve” and “the use of technology in disrupting established business models is a big part of that.”
However, the guide goes on to point out that “despite hospitality businesses being among the biggest users of Xero invoicing and payroll, fewer than 50% of them currently connect an app to Xero.”
Key focus areas for hospitality advisory
In the Hospitality Playbook, Xero takes a closer look at various areas of advisory depending on client priorities, and current business process and IT scenarios.
The major areas are Operational Performance and Sales Performance – with the first looking into establishing financial controls, compliance and process efficiency, and the second aimed at maximising revenue.
Source: Xero Hospitality app playbook
For example, a specific advisory scenario for Bill Management might be that a client has little or no automation of data entry into Xero, and/or has a paper or email system to manage bill approvals. This would mean they fundamentally lack the end-to-end process automation and ability to scale efficiently.
Why automate hospitality data?
As Xero points out: “Bills and day-to-day expenses have a significant impact on cash flow, especially for hospitality businesses which often handle and process a significant volume of invoices that need to be paid.
In fact, Xero product data shows that hospitality businesses can pay up to 40 more invoices a month than other types of business.”
Improving efficiency: from data digitisation to data automation
When the inefficiencies resulting from manual intervention and paper-based processes need to be eradicated, the first step businesses take is often Data Digitisation. This implies digital data capture, and cloud accounting and data storage.
However, there is a better way. The more advanced approach is Data Automation, combining digital data capture and cloud data storage with workflow driven data validation and decision control.
In other words, you ensure that your accounting and finance documents and all the accounting data are complete, verified by both business and accounting, and are audit-ready.
A smart way of doing this is to implement a Data Automation App Stack. This consists of the following key components:
- Cloud accounting platform – Xero (for cloud data storage, centralised document management and accounting).
- Digital Data capture tools, such as Receipt Bank, Datamolino, AutoEntry, Hubdoc, LightYear, and Xero select data capture features.
- Approval automation app, such as ApprovalMax, that helps with both purchase order automation and bill automation. It should also take care of creation and approval of POs and bill review and approval outside of your accounting system.
Example of a specific software requirement for hospitality: price checker
Since hospitality businesses are dealing with a much higher volume of invoices and a special focus is put on invoice/bill correctness, a price checker functionality is essential for bill management in the hospitality sector.
The ApprovalMax price checker enables a price comparison for each line item in an approval request, based on the inventory list prices as per Xero’s Products and services catalogue. It identifies and highlights the price discrepancy by applying color labels to such line items of the request.