Barry Chandler of TheBarBlogger.com works with bars and restaurants to bring more customers in the door using social media, online tools and customer engagement. He also advises on theft prevention and cost control. His clients include Schmidt’s Sausage Haus, Bar 43 and Kildare’s Irish Pubs, among others. Since 2004, more than 2,500 bars, restaurants and hotels have used his tools and services to improve their bottom line and increase footfall. Here are four ways Chandler says can help prevent fraud in the restaurant and bar business.
1. Standardize your systems: This sounds complicated but simply means that every critical action in your business needs a standard system and method. Take your cash reconciliation at the end of the night, for example. If you don’t follow a system, you won’t get your reports, your tills won’t be zeroed for the next shift and you won’t know if cash takings are down. The same applies to every other action in the running of your business. Document your house standards and train each staff member so that everyone completes a task the same way. Once staff members have been trained, a standard is in place and it will become easier to monitor staff performance.
2. Perform physical inventories: Hire an external stock auditor to do regular inventories and to report the results directly to you, product by product. Only by knowing exactly which products are missing can you take action to prevent theft. A ship taking in water needs to know where the hole is before it can be plugged. Think of your business the same way and you’ll fix the problem in a timely manner. I know one owner who used an external auditor to assist with the first few months of inventories. They tightened the stock losses to a satisfactory level, and now the owner performs randowm spot checks in the bar on random occasions. The staff sees him counting and knows he is serious about inventory procedures. What they don’t see is him throw away his count sheet without even looking at it. His accountant gives him a profit report once a week, and he sees if he is on target based on stock sold. He uses this exercise to keep the staff on its toes.
3. Undertake surprise cash counts: If you do have an opportunistic staff member working for you, (s)he will be looking for routines in the business to take advantage of. Just as dropping off bank deposits at random times foils thieves, the same applies within your business. Most bars wait until the end of the night to balance the cash, and most staff members know this. If a staff member has been taking cash from customers without entering anything into the register, then they will normally wait until the end of the night to remove the cash. Eliminate this opportunity by taking a reading from the register at random times during the day and counting the cash. If there is too much in the drawer, you might have stumbled upon a scheme.
4. Remove managers’ keys and change passwords: If you leave managers’ keys in the till during operating hours, you are allowing an employee to perform refunds, void transactions, print readings of cash takings, program prices and so on. Obviously you don’t want this to be going on so only provide keys to trusted members of management and keep a record of who is in possession of the keys. Certain registers require a password to undertake certain functions. Change the password every few months or if you think there is a problem in the bar. Never write it down or disclose it to the bar staff. This is another wayto bring you closer to running a business that gives you answers rather than raises questions.
Our weekly reader poll in Restaurant SmartBrief — SmartPulse — tracks feedback from restaurant owners and managers about current trends and issues.
Last week’s poll question: Is preventing theft in your restaurant a priority?
Yes — 73.83%
Sometimes — 20.56%
No — 5.61%
What are you doing to prevent theft in your restaurant? Leave a comment.
Photo credit: lamprey via iStockphoto