Ledger domain

Accountancy and technology - not exactly a mouth-watering combination. To many caterers accountancy is dull and technology is baffling, and anything that combines the two is probably best avoided altogether.

But, like it or not, both are necessary evils, and increasingly there are ways to use technology to make following money around the business easier and less time-consuming.

For contract caterers with multiple sites and clients, having an accurate and simple way of getting the isolated accounts of each site into the head office accounting system has traditionally been tricky.

Now, with a clever use of the Internet, there may an answer. Artizian, a small, 18-site contract caterer based in Berkshire, is one company that is turning to the Web to tackle just such a problem.

It has recently installed a new system called Saffron, an off-the-peg accountancy system that allows unit managers to input all the data from their contract straight into a Web page, which is then collated back at head office for analysis and formal reporting.

Artizian found that, as the business grew, its initial method of collating finances across all the sites had become counterproductive. It was using a standard spreadsheet, isolated for each site, which would then be physically sent to head office.

"There are several things wrong with that method," explains Jackie Brain, Artizian's finance director. "Each contract is like a cost centre and it receives all the invoices for all the purchases it makes. So each one punches all of those invoices into the spreadsheet to get a summary of all their costs and sales.

"But then they send everything to head office and we have to key all the same information into the main accounting system. So we're doing everything twice."

A new system was needed but, by Brain's own admission, the Artizian team were not technology experts. This is not an uncommon situation in hospitality, so how did Artizian go about choosing the best system?

"We knew what we wanted it to do but we don't have the capability to make it happen ourselves," she explains. "We're a small company in contract catering terms. We don't have our own IT department, so we knew from the outset that we would have to outsource it."

Artizian began by drawing up a list of requirements - what were the main functions it needed from a new system? Here's what it came up with:

• Each unit needs to be able to input and produce all its own paperwork locally.
• Each unit needs to produce a trading summary for its contract to include an accurate forecast at the end of each month.
• The system must have the flexibility to add new contracts and new functions at will.

Having decided on the main requirements, Artizian set about finding a way to implement them. "There were obviously two options," Brain explains. "The first was to go to a company and get a totally bespoke system made, but we don't have an open chequebook. I spoke to two or three companies and the feedback was, ‘Fine, but it will take a while and cost a lot.'

"The second was to find someone who produced an existing system that did what we wanted."

Which they did - eventually settling on the Saffron system from Fretwell-Downing Hospitality. Saffron is essentially a bit of software that contract caterers like Artizian can rent to run their accounts. It sits on the Internet, which means each site can dial up and input its data, and head office can see it immediately.

"So site staff are inputting the invoices they've purchased from, the cash summaries, the takings, etc," explains Charles Nobbs, sales director for Fretwell-Downing. "That's fed by them into the central database and from there it can be downloaded into the formal accounting system."

Saffron has various other functions, too. While its main purpose is to facilitate the collection of data there are also more operational aspects to it.

"Each site can look at recipe costings, menu management, production runs, purchase ordering, point of sale interface, etc," Nobbs continues. "All the things that are justified in some sites and not justified in others."

Brain says Saffron does "95%" of what Artizian had hoped. "And the rest of it can be done bespoke. We'll be doing that as phase three of the project."

The functionality of Saffron and similar systems is pretty straightforward. Restaurant and hotel chains have been using similar Web-based methods for some time, but it's been only recently that contract caterers have begun to realise the benefits.

This is all very well, but the key question with any kind of new technology is "How much will it cost me?"

The pricing options for Saffron are typical of this kind of Internet-based software. There are two choices: rent it or buy it.

The "buy it" option is obviously the more expensive and is aimed primarily at the big caterers. Avenance, for example, has just bought a Saffron licence to use initially across 400 sites. It will then be customised and integrated with the corporate systems. It is still Internet-based, but the difference from the "rent it" option is that the company will host the Web site on its own computers at its head office.

While Nobbs is keeping the exact deal with Avenance under his hat, he says the average cost of the "buy it" option for a typical 100-site catering operation would be £50,000-£60,000.

The "rent it" option is the one Artizian went for. The functionality is the same but the software is much more off-the-peg. Fretwell-Downing hosts the Web site on its servers and Artizian pays a monthly fee for each site that uses it.

"We will work out what equipment is needed and any report modifications or interfaces that need creating and we'll come up with a monthly fee," Nobbs says. "That will include all of the back-up, security, software updates and telephone support."

Again, the amount Artizian is paying is under wraps, but for our typical 100-site company the monthly rental is in the region of £100 per site. But that doesn't include any project management or training or some software modifications.

Brain says Artizian's initial costs have totalled about £7,500, which includes some new hardware and making sure the new system integrates with the new head office accounting system it has also invested in.

As far as Artizian is concerned, it has taken a step into easing the administrative burden surrounding its finances. It is trialling Saffron in several sites for between one and three months and then it plans a roll-out. Any new contracts will go straight on to the new system.

Artizian Catering Services

4 Spring Meadows Business Centre, Wargrave, Berkshire RG10 8PZ
Tel: 0118-940 4440
Web site:www.artizian.co.uk

Fretwell-Downing Hospitality

Brincliffe House, 861 Ecclesall Road, Sheffield S11 7AE
Tel: 0114-281 6060
Web site:www.fdhgroup.com/fdh

Online accounting - advantages and disadvantages

Advantages

• Reduces administration - site managers can input data directly into head-office system.
• If rented, it can be paid for on a monthly basis for each individual site.
• It is scalable. So it can be used for three sites or 300.
• All technical upgrades or problems are handled by the service company.
• All each site needs is a standard Internet connection and PC. No hefty hardware is required for the caterer.

Disadvantages

• It is not a ledger system in terms of financial regulations, etc. It is specifically a management information tool.
• It requires training, which may cost extra.
• Like all technology, it can go wrong. Staff will need to be trained in how to keep accounts manually just in case.