Business Advice

Could your staffs be stealing from your Cafe?

This Blog was first published in March 2016.

As a business owner do you have procedures to monitor and prevent any misallocation of cash or goods? I hope you can take some benefit from this and apply it to your own business, if you would like a review over your own procedures or if you have a questions be sure to get in touch martin@myca.ie

It is well known that where there is an opportunity temptation can develop. Cafes and restaurants I have worked in the past, their was a procedure to review and filled the gaps where there was a break down in those procedures.

Here are some things a Cafe owner / manager can do in their own business.

  • Assess the environment which you operate, what is the culture of your business?
  • Do you have a procedure for dealing with cash?
  • Do you conduct stock takes? Monitoring your margins.

Assess the Environment, Culture of your environment?

This is the first step. The environment you operate will have a higher or lower risk level of pilferage depending where you operate. A cash environment is higher risk compared to a business which only deals with card payments. What is the mix of your cafes environment?

What is the culture of the environment? What are the acceptable and non acceptable policies of your business, can a staff member have their dinner for free at work? Can a staff member bring a dinner Home? What can be consumed at work for free, and can the items be consumed at home. Can cash be taken from the till for petty cash expenses, and are receipts needed for these petty cash expenses, are receipts given to all customers? Do you have a no sale button on your till? These are some things you need to consider. When you go through this it will give a framework and your procedure fills any gaps.

Each business is different and business owners need to look at what happens on the floor to determine where the boundaries are. Once these are determined they should be communicated to all staff in written form, and be signed. For any new staff starting this should be part of their induction.

Procedures for dealing with Cash

Operate in a cash business then cash procedures are an important place to focus your attention, you should have procedures to deal with any over and under’s in cash. Reconciliation should be done after each shift and additional spot checks should be sprinkled in too. Patterns start to emerge so spot checks need be done at random.

When dealing with over’s and under’s in cash, you should have a threshold, in my opinion a under could be due to a honest mistake, so a arbitrary figure of €10.00 may be acceptable, however this needs to be monitored and written down the staff working the date the amount. Patterns can start to emerge and a written record is the best way to spot this.

When it comes to cash over’s, there is no threshold, any over is an indicator of a break down in your procedures, the till has more money than what it should. This sends alarm bell and needs to be investigated immediately.

An over ring could be the result of cash been taken from a customer but no sale has been recorded, this is in fact under recording your sales, and the vat due on this sale which is a criminal offence, not recording correctly the purchases which distorts your cost of sales and your margins. The unrecorded cash in the till may lead to temptation of pilferage, as there is unrecorded cash in the till.

Do you conduct stock takes?

Some small businesses don’t usually conduct stock takes as they see them as time consuming and you get no value from them. The only time they check their stock is when the Accountant wants the closing stock figure for the year end accounts.

Business owner may want to conduct regular stock takes, opening stock + purchases – closing stock = what was sold. This information is critical for a business, and this will highlight trends. The figures calculated will highlight if your staff are not recording sales correctly, or giving away or consuming large amounts goods.

I find that most businesses don’t know what margin they are getting on their products. To determine what price you charge for the service or goods, this will give you a margin %.

Goods / sales price x 100  = Margin

100 / 500 x 100 = 80% Margin

Trends will emerge very quickly, and once a benchmark is set any differences from the benchmark will need to be investigated.

Conclusion

Business owners need to always be aware of the opportunities people could take advantage off, It is important that you put as much trust and training into you staff as you can, create an environment which has clear procedures which staff can work within.