A Case Study for Automating the AP Process

Matt Ogle, the AP and Vendor Manager for Montana Brands Management (MTB), a fast-growing Taco Bell franchisee in Western Montana, is responsible for all accounts payables and vendor management for 12 Taco Bell stores and the management entity. This is how they made the investment to automate their AP system.

The initiative to automate our AP process was really kick-started during Covid. Each of our Taco Bell stores has 20-30 standard vendors. That includes local vendors servicing a specific store as well as franchise-level vendors which serve all stores.

Before the pandemic hit, our AP process was 100% manual and paper-based. This included receiving, managing, and approving invoices for our then eight different Taco Bell franchises, as well as paying all of their suppliers. As you might guess, there were some challenges with our approach. In addition to being extremely time-consuming, it probably wasn’t as secure as we would have liked, and most importantly, it was not going to scale to support the company’s projected growth from eight to 12 stores in the next 12 – 24 months.

At the time, we received a high percentage of invoices in the mail, and I had to manually enter them into our QuickBooks Desktop system. When it came time to pay the invoices, I would run and print aging reports and deliver them by hand to our CFO for review. Once approved, I would print the corresponding checks and return with them for signature. Then I would put them in the mail and start the process all over with the next group of invoices.

I used to spend up to 30 hours a week just on the clerical parts of our AP process. My CFO and I both knew our time could be better spent on higher value activity. We also knew it wasn’t scalable and would likely cause problems as we continued to grow.

This was right in the midst of the pandemic, of course. So, most of us were working remotely. Because of the manual process, we had to go into the office to collect invoices, get signatures, and run and mail checks. That wasn’t working very well for anyone, and it certainly wasn’t going to scale.      

MTB had considered AP automation before, but it was never a top priority. But at this point, we knew it was time. The day-to-day problems were painful enough and it was quickly becoming an obstacle to our growth.  

There were originally two key requirements for the ideal solution: the ability to automate our end-to-end AP process, and enhanced payment security. The pandemic added one more: the ability to manage the entire process – invoice capture, approval, and payment – remotely. The other capability on our wish list was the ability to manage multiple entities. QSR’s like MTB need to centrally manage AP across multiple locations while supporting the unique requirements of both franchise-level and local vendors. 

After conducting extensive research and participating in many product demos, we decided to go with MineralTree’s Total AP solution. Since deploying it in late 2020, we have added four new Taco Bell stores, bringing the current total to 12. As a result, we are processing 50 invoices in a typical day – up to 50 percent more than when we first implemented the platform. The automation of our end-to-end AP process was pretty important to our ability to handle that increase in volume. 

Today, MTB receives up to 90 percent of its invoices by email. This triggers an automated invoice capture process and virtually eliminates the need for hand coding and manual data entry. I start my day by logging into the AP system to check for new invoices and review existing documents. The user interface allows me to quickly go store by store to review all the invoices that are ready for approval. From there, I can select certain invoices and email them to the CFO for his review, and once approved, they are paid by ACH, check, or virtual card.  When a payment is made, the AP system syncs with MTB’s QuickBooks Desktop accounting system to close the loop. 

With the system’s multi-entity support, we are also able to manage each of our locations as a separate entity, with a one-to-one mapping to the corresponding QuickBooks file. This approach gives our finance team greater flexibility while enhancing visibility into spending for our executive team. At the same time, I can easily toggle from one entity to the next within the system as I process AP for each store.

We really like the added visibility and control over our payment schedules. In some cases, we want to make faster payments to maintain better working relationships with our vendors. In other cases, we can take advantage of preferred services or discounts in return for faster payment.  The platform offers us the flexibility to cater to each supplier’s payment preferences and overall technology sophistication.  And real-time visibility into invoice status and the ability to hit these deadlines helps us make the best decisions for the business.

Despite invoice volume growing by 50 percent, we estimate that our time spent on AP has shrunk from 30 hours weekly to just 10-15. We have also negated the need to hire additional accounting staff, while also freeing more than half of my time so I can focus on finding new ways to help run the business, such as producing better reports or improving other internal AP processes. That all adds up to a very meaningful improvement in our operations.

AP automation has consolidated and simplified what was an extremely time-consuming and tedious process. We now have fewer errors, more visibility, and complete confidence in our payment process, all of which helps us manage our business much more effectively.