According to the US Chamber of Commerce, employee theft accounts for billions of dollars in losses for restaurant owners each year. That is why it is so important to identify and prevent internal theft, which is a priority in your business plan. No matter how well you think you know your employees, you need to be aware of how to prevent employee theft in your restaurant. Recognizing the signs is important; having tools in place to prevent theft is even better.

According to a 2018 study by IHL Group, 41.1 percent of quick-serve purchases are made with cash. Cash transactions are also a big source of loss when not monitored regularly. Cash is the most coveted form of theft, particularly for employees who suddenly experience an outside issue or concern that requires quick payment.

That is why it is especially important to do a monthly reconciliation of cash collected at the store counter and cash deposited in the bank. Cash collected by the restaurant will not match with cash deposited. The reason being, there are petty cash expenses generally termed as paid outs, petty cash income (various terminologies are being used industrywide) and cash over/short which will cause a variance. One of the most significant cash expenses is distribution of Tips which we many times is sidelined. Some of the example of petty cash transactions are:

The below diagram shows the entire cash movement from store to bank.

If the variance between cash collected and cash deposited is justified from the POS then we can conclude that there is no theft, but if the difference cannot be justified even after considering the petty cash transactions and cash over/short, then there is a high probability of cash theft. To eliminate cash theft, we have developed a system of cash collection and cash deposit reconciliation. This reconciliation tool has significantly helped our clients to get more accurate financial and cash control within the store.

This is a novel way to map the flow of cash from the counter to the bank which ensures that the cash is going to the right places. A strong loss prevention program must include good supervision by trusted staff and strict cash handling policies but there is no replacement for good reporting and reconciliations which have your back.

Allow us to help you add another layer of control and analyze the data that can help unravel discrepancies in cash handling and reporting. Fruxient Accounting specializes in restaurant accounting and helps Restaurant owners by providing comprehensive accounting and strategic services. Contact us to know how we can help you get rid of these day-to-day accounting issues and focus on operating and delighting your guests.