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How to reduce fraud in your restaurant



" Global Study on Occupational Fraud & Abuse " from the Association of Certified Fraud Examiners (ACFE) found that the typical organization loses an estimated five percent of its annual revenue to professional fraud. In the same study, the ACFE found that the median loss caused by professional fraud was $ 130,000. This is a loss that no restaurant or bar can afford.

What do restaurant scams look like ?

Restaurant scams are quite common, especially with large staff. Combine this with overlapping multiple shifts and staff turnover, it is the perfect opportunity for restaurant scams to occur. ] Significant personal debts and credit problems

  • Behavioral changes (an indication of drugs, alcohol, gambling or fear of losing your job)
  • Refusal to take vacation or sick leave (many crimes are discovered while the perpetrator is on vacation)
  • than expected on hectic days
  • Make recognition of fraud a part of your education

    You can reduce the risk of employee restaurant fraud through training and internal control. Teach employees and managers how fraud can occur in the restaurant, what constitutes fraud, the warning signs of fraudulent activity, and how to report suspicious behavior. In the event of fraudulent activities, it is important for entrepreneurs to have a system for reporting restaurant fraud, as employee tips usually reveal professional fraud.

    Establish an anonymous reporting system for employees, suppliers and customers to report any suspected or actual violations. Design and implement anti-retaliation that actively encourages employees to report suspicious activity. Read, & # 39; Employee Dishonesty: Identifying Threats. & # 39;

    Implementing internal controls

    In addition to training, internal controls are important to reduce the risk of employee restaurant fraud. Internal control helps ensure efficient operations, compliance with laws and regulations, asset protection and proper financial reporting.

    These policies and procedures should address:

    1. Division of tasks: Implement a practice where two separate employees are responsible for registering and processing a transaction.
    2. Access control: Restrict access to physical and financial assets and information, including financial online information such as bank accounts and credit card transactions, to authorized employees.
    3. Authorization Checks: Develop and implement policies to determine how financial transactions are initiated, authorized, registered and audited.
    4. Policy: Establish and communicate strict policies for access to company assets such as business inventory.
    5. Exposure to cash: Monitor cash transactions closely and request receipts for all transactions.
    6. Reviews: The department scheduled regular and occasional random reviews by a qualified financial professional

    Conduct background checks

    It is also a best practice for restaurant owners to conduct extensive background checks of those who have access to the company's funds and other resources. Fraud and dishonesty from employees charge a fee at restaurants and bars of all sizes ̵

    1; a fee of about five percent of profits. By being able to identify potential red flags, make the subject part of employee training and carry out checks and balances, you will be able to take measures to reduce the risk of business-damaging events.

    To learn more about how Social Security can help your restaurant grow and mitigate the risk, consult a Society agent in your area.

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