The COVID-19 pandemic that wreaked havoc on the world reached America in 2020. It had an unprecedented impact on people’s daily lives, from their individual physical health and well-being to the nature of their work, their social lives, their families, their mental health, and their finances.
Industries all across the world were affected. Receiving a particularly hard blow were manufacturing and logistics, entertainment and media, finance, and travel and tourism, specifically the hospitality industry.
With the world on lockdown, travel in general took a nosedive while travel for pleasure nearly ceased. This resulted in formerly bustling hotels and resorts metamorphosing to resemble something closer to ghost towns.
Not only was overnight hospitality gutted, but restaurants, bars, casinos, and amusement parks were also emptied as would-be visitors were warned, and sometimes even ordered, to stay home. This sudden trickle and sometimes full-on cease of business led to the damage of an integral system within the industry: accounts payable.
What Do Accounts Payable Have to Do With It?
Accounts payable (AP) is the money owed by a company to its creditor(s). This differs from accounts receivable in that the latter refers to the money owed to the company by its customers who paid for a good or service on credit.
Most companies want to extend their accounts payable and minimize their accounts receivable. This means accepting less payments from customers on credit and delaying payments to vendors and suppliers, resulting in greater free cash flow (FCF).
This natural tendency was exacerbated by the pandemic. People stopped going to restaurants, stopped frequenting casinos and amusement parks, cancelled their plans to travel out of state and stay in hotels or resorts. The slow in the economy created a cash squeeze that left many hospitality businesses scrambling.
They weren’t scrambling with no purpose, though. The rush was towards cash flow and liquidity which could keep businesses running in the midst of the slowdown.
This meant that many businesses made major cuts in immediate spending, from capital expense cuts to temporary factory closings. They delayed or slowed down the accounts payable process, leaving the procurement process dangling mid-stage. To further increase cash flow, some governments were able to delay tax fees and/or create stimulus packages to aid struggling businesses.
Pandemic Increases Technology Demand and Usage
If you feel like you’ve spent the past two and a half years largely looking at a screen, it’s probably because you have. With in-person events, transactions, vacations, and meetings necessarily put on hold, technology became even more vital. It was not just a distraction or something to kill the time, but a way to connect one to the outside world.
Instead of going to restaurants and dining in, people began to order takeout en masse. They used apps and mobile banking when otherwise they may have used their car and some cash or a credit card.
Instead of traveling to another state or country on business, record amounts of employees and directors turned to online video communication applications. Instead of going to California or Italy on vacation, would-be revelers stayed at home, chatting online, playing video games, or using virtual reality to explore what they would have liked to in person.
The hospitality industry, like the average individual, was forced to turn to technology more than ever in the post COVID-19 world. Businesses were compelled to reevaluate and restructure everything from health and safety to daily operations to preparedness to HR policies to, yes, accounts payable. In each area of change, technology assumed a greater role than ever before.
Technology, as Well as Health and Safety
Good hospitality businesses have been in the business of health and safety since their beginnings. As technology progressed and expanded over the years, restaurants, attractions, and hotels integrated it into their health and safety practices with things like online booking and in-room Wi-Fi. COVID-19 brought ever more technology to hospitality’s doorstep. And this wasn’t a guest that could be ignored or underserved.
Hospitality customers began to expect and demand contact-less solutions. This meant online check-in, online ordering, online menus, and more digital communication as opposed to face-to-face. If someone ventured out of the house, they were looking for QR codes to scan with their mobile phones, not actual employees. The logic of the day: people = risk, technology = safety.
Instead of holding in-person team meetings, hospitality staff began to rely more heavily on digital communications. Guests checked in online and paid simultaneously, or relied on contact-less payment methods once they arrived.
Everything was centered around reducing the risk of contracting or spreading the virus: less contact with people, less contact with highly-touched surfaces, and less contact with communal spaces where COVID may be floating through the air. Health and safety standards and expectations paved the way for a hospitality industry more online than ever before.
Technology and Operational Strategies
The increased utilization of technology did not stop with customer-to-business transactions. Everything within the hospitality businesses’ operations demanded to be digitalized, too.
The pandemic caused businesses to reevaluate and restructure everything from cross-training staff to reevaluating internal spending to cancellation and pricing policy updates to auditing the technological infrastructure already in place. New implementation of technology could assist in all these areas.
Day-to-day guest experience in hotels and resorts must be prepared for using technology. Guests expect and seek out the safest experience achievable. This means online check-in, app-based room keys and remote controls, Wi-Fi connectivity, and online communication with hotel staff. Hospitality companies must prepare for this by investing in smarter, cleaner services.
A Non-Exhaustive List of COVID-Required Hospitality Tech
The technology required in a pandemic-ridden world does not stop at online check-in and app-based remote controls. Many hotels are developing and offering “smart rooms.” These AI-based personal assistants include familiar names such as Alexa or Echo.
These automated butlers can help you to reduce physical contact with anything that can be avoided–from opening or closing drapes to changing the TV channel to turning on your favorite music artist to controlling the lights.
Technology like machine learning and AI can also be used to predict how many visitors will book at a given time. This will help hotels save money as they minimize costs associated with the volume of expected guests.
AI can also be used to learn user preferences in relation to booking and travel sites. This self-teaching technology will connect hundreds of thousands of lodging accommodations, helping future travelers to find just the right place at just the right price.
Technology and Accounts Payable
As important as accounts payable is, it is often overlooked in the grand scramble of hospitality management. Despite this, it is as important as ever to stay on top of accounts and keep up with payments. A pandemic is no time to risk vendor and supplier relationships.
If your company still deals with paper invoices, this pandemic is where that ends. Automated invoice processing is proven more accurate, fast, and effective in comparison to manual processing.
Paper invoices require a system of snail mail which, despite its reputation for being, well, snail-like, has only slowed further as COVID-19 does its harmful rounds. Waiting days and weeks for paper invoices to be punted around costs your hospitality business precious time and flexibility. Add to this an unprecedented increase in paper costs and this combines to disrupt the whole supply chain and can negatively impact your sales.
With automated invoicing, invoices can be sent, received, triple-checked, and paid in mere minutes. This is not only faster and more accurate than paper processing (humans being known to make more silly mistakes than well-programmed software), but frees up your employees to do more valuable tasks.
What’s more, with the pandemic came a surge in fraud. As more employees are working from home and not protected by office computers, dishonest people have found opportunities to bypass controls and collect your business’ money.
Automated invoice processors like BirchStreet Systems will automatically 3-way AP auto-match your invoices to make sure they match the PO, invoice, and receiving receipt, complete with auto-checking bank account numbers and other information that might be compromised by a scammer and overlooked by a human checking for inconsistencies.
With the pandemic came not only picked-over grocery stores, canceled coffee dates, and crowded hospitals, but a shift in the entire hospitality industry. Guest numbers plummeted as people opted to stay home instead of going out or travelling.
Not only were the numbers smaller, but the whole experience of a restaurant or hotel was altered. No more paper menus, cash, or chip readers. No more remote controls and physical room keys. Everything became more digital, a call that current technology, fortunately, could answer.
But that’s not where technology stops. While installing digital assistants into “smart rooms” for fewer guests may actually cost you more money, automating your accounts payable process will most definitely save you valuable money and time.
Paperless invoice processing is faster, cheaper, and less susceptible to fraud than paper processing. After all you’ve done to adapt to this new world, don’t let a slow, lumbering accounts payable process be the thing that does your business in.
- Featured Image, Pexels