SNHU Restaurant Cash Receipt Controls Discussions

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Original information for discussion: Some restaurants use customer checks with pre-numbered sequence codes. Each food server uses these checks to write up customer orders. Food servers are told not to destroy any customer checks; if a mistake is made, they are to void that check and write a new one. All voided checks are to be turned in to the manager daily. How does this policy help the restaurant control cash receipts? Do you think there is a more efficient way to control cash receipts? Explain.

1. Restaurant owners can minimize or reduce potential thefts by using client checks with pre-numbered sequence codes, which is a positive step in the right direction. Using the pre-numbered sequence codes enables the restaurant to maintain some form of accounting and makes it simpler to identify any transactions that are carried out without being correctly or at all recorded. The absence of a customer-paid meal would therefore be more obvious than a missing check. Another reason I think employing these customer checks with pre-numbered sequence codes is that each waiter or waitress has their own unique set of numbers, so if there is a number missing, it will be apparent who was responsible for that check. The checks are totaled at the end of the night, and if any are missing, it is simple to determine who is to blame for the error, therefore doing it this way also aids in the detection of any fraud in restaurants. Even though I think cash receipts are crucial for a restaurant, I also think there should be some kind of computer system in which servers can input their data to make it simpler to reconcile the receipts each night. The missing checks can be found by reconciling all the checks.

Separation of roles is another crucial internal control that every organization should have. Due to this internal control, the company can effectively ban the delegation of duties to any one individual. No corporation, for instance, wants the accountant to reconcile their work or the payroll person to sign off on their checks. Any business owner, especially those who run restaurants, must be aware that there is always a possibility of human mistakes, whether the information is entered manually or by computer. The essay also concentrated on some crucial information that restaurant owners should be aware of. This scenario raised a lot of interesting topics to consider. Skimming, as defined by Wells (2003), is the act of an employee stealing money from a firm without it being documented. Most of the control in the pre-numbered check system depends on the worker’s integrity to accurately fill out a check for each order and to not cancel orders that have already been processed.

Because they don’t conduct background checks or employee screens, have only one employee with too much authority, or place too much faith in their employees, small businesses put themselves at greater risk of fraud. A point of sale (POS) system that demands that all orders be entered at the beginning so they can be traced to the payment is one method the business can use to improve cash controls. To compare with the nighttime bank deposit, a daily transaction report can be obtained. Other controls, such as logging orders with employee IDs, are possible with the POS system. A better method would make it harder for staff to embezzle money. The bottom line is that an employee who is content with his job is less likely to steal from his company, and if it does happen, the loss can be reduced. To make sure that there isn’t workplace fraud taking place or that any employees are stealing from the business, the cash receipts must be reviewed regularly.

Even while using a check system is a wonderful approach to reducing fraud, modern technology now offers a more effective way to manage transactions. As an illustration, waitresses can now enter customer orders into a computer system, which instructs the cooks to produce the meals. The same approach can be used to record payments after the meals have been prepared and distributed. The prepared food and the money received line up in this manner. New technological developments reduce the likelihood of fraud. As technological advancements get more inexpensive, businesses can use them to their advantage and update their internal control methods, which will lessen any ongoing hazards they may encounter.

2. This restaurant’s process of using the customer’s pre-numbered sequence code to write their orders helps control cash receipts by the matching method used in accounting. A customer’s check sequence matches a food order, so if a check is missing then you have a food order that goes with that specific customer. This method makes it difficult for servers and other employees to skim money. This process does not prevent money from being stolen because the employee would have to take the matching food order that correspondences with the customer’s check number. Also, managers need to monitor the voided out checks and keep a count. A more efficient way to control cash receipts is to have a shift leader or manager verify and sign off on each customer’s food order along with the matching customer’s check, also keep count of voided out checks.

3. I’ve worked long hours in restaurants from time to time over the years.  I’m still called in to waitress if some restaurants are understaffed.  The reason for that is because my father owns multiple restaurants.  It’s shocking how much fraud goes on in restaurants, mainly from the employees.  All of the restaurants he owns are small diners that don’t even have a computer system to enter in orders.  Theft is common.  It is a policy at all of his restaurants that all voided checks be turned into the manager daily.  This is a very serious policy and is a reason to be fired if not followed properly.  The reason is because a check can be voided after a customer pays cash.  If the bill you give to the customer is $50 and they pay cash to you, you could keep the whole $50, plus your tip, by voiding the check that shows they purchased anything.  The controls that are in place at my family’s restaurants are:1. They only use tickets with a carbon copy.  One for cooks, one for the server to give to the customer.2. The cooks are not allowed to make food without a ticket.3. Voided tickets must have both copies to prove that the food was not made.4. The ticket then gets a hole put through the middle of it preventing it from being reused.5. The manager matched up the cook’s tickets with the tickets from the customer’s when they pay.Any ticket that does not have a match is investigated.  The tickets are then put in numerical order and any ticket that is missing is investigated.

It would be much more efficient if a computer was involved in any way!  Some small businesses still do everything by hand.  Installing a computer system that monitors employee theft usually increase revenue by seven percent. (Pierce et al., 2015)  It seems like a simple solution, but the cost needed up front to install a system is too high for a lot of small, family owned restaurants.  A computer system also helps with another common theft in restaurants, which is drink theft.  So many servers don’t charge their customers for drinks in hopes to get a bigger tip.  They don’t think of it as stealing as much since they aren’t charging the customer and keeping the cash.  May seem small, but profitable drinks are the reason some restaurants are able to keep food costs lower.  Drink sales tend to raise 10.5% as a result of a computer system! (Pierce et al., 2015)