By David Scott Peters
If you have poor cash handling procedures in place in your restaurant, no other system you put in place will matter. I don’t care how efficient your restaurant is, if every penny of your sales isn’t deposited in the bank, there won’t be enough money to pay your bills. Cash controls must take top priority. No matter what you think needs to be addressed first, I tell restaurant owners to prioritize the review of restaurant cash handling procedures over everything else.
Here are some samples of classic cash handling errors we see in restaurants all the time:
- Change in a glass or a drawer. This is a practice used to simplify the nightly deposit. It is used two different ways. First, it’s a time saver to avoid counting loose change. Second, it is used to make the nightly deposit balance exactly to what the point of sales system says the cash balance should be.
- A week’s worth of unsecured checks in an unlocked filing cabinet. We often see this when the general manager or the owner is the only one allowed to make a bank run, when there is not enough cash to deposit due to credit card purchases or because the owner or manager is just plain lazy.
- A bin with a year’s worth of used non-voided paper gift certificates. While management was doing the right thing making sure all of the gift certificates used were accounted for on a nightly basis, they failed to write the word void on them and then saved them in an unsecured clear bin. Any employee could steal a small amount on a daily basis and reuse them to keep cash sales.
- Customer checks taped to the office wall. Many restaurants cater or hold banquets on premise. This means you will have customers leave a deposit check to guarantee the party will happen. This practice is meant to cover costs if they cancel. The challenge comes when the owner or manager doesn’t deposit the checks and tapes them to the wall, because you don’t know if payment is good. A dishonest employee could steal the checks or use the information to steal your customer’s identity and conduct check fraud.
- Credit card numbers recorded in a book. In July 2010, a new law was enacted that makes it illegal to retain customers’ credit card numbers in anything other than a secure online record keeping system that meets the law’s requirements. Failing to follow the law’s requirements can result in fines as much as $5,000 for each credit card number kept.
- Blank checks and forged checks to routinely pay for deliveries. It is a common practice that restaurant owners leave blank checks to pay for invoices, or they allow a key employee, who is not authorized to sign checks, to simply forge their signature to pay for invoices. This exposes you to a great deal of liability.
If you any of these procedures is in place in your restaurant, know that you’re leaving yourself open to theft and liability. It is your responsibility to make sure ALL of your money makes it into the bank on a daily basis. You must eliminate poor cash handling procedures, eliminate the majority of ways your cash can be stolen and avoid costly fines through proper systems.
David Scott Peters is a restaurant consultant, event speaker and founder of TheRestaurantExpert.com, a company committed to the success of independent restaurants. TheRestaurantExpert.com offers an exclusive online restaurant management software designed specifically to meet the complete operational needs of independent operators, including holding their managers accountable and running a profitable business. Combined with one-on-one coaching and group workshops, TheRestaurantExpert.com is helping independent restaurants find success in the highly competitive restaurant industry. Download a free report to discover the #1 secret to lowering food and labor costs and running the independent restaurant you’ve always dreamed of. Learn more about how David can help you at www.TheRestaurantExpert.com.