How Often Should Your Hotel Have an Internal Audit Conducted?

It is a common question, how often should your hotel have an internal audit done?  The answer:  well, it depends.  Here is why:

First, how often do most hotels actually conduct an internal audit?  Most hotels will say they are audited once per year.  However, most hotels have the goal of being audited once per year.  In reality, they are audited only every 2 or 3 years in most cases.

audit-stampHaving a goal of once per year is a good start.  But we recommend that you set your goal based on the results of the last audit.  If the hotel scored 90 percent or better on the last audit, conducting one audit per year is fine.  However, if the hotel scored less than 90 percent, we recommend that the hotel creates a 90 day action plan to improve their results and then the hotel is audited again after 90 days.

We understand the expense of conducting an audit, however, the amount of money that could be lost by a hotel with improper controls could easily be far more than the cost of an audit.

A few additional audit tips:

First, the audits should always be completely unannounced.  We usually recommend that the Controller and other key managers who are needed for the audit submit a schedule of any vacation days so the auditor does not show up during their vacation.

Second, the follow up on the audit is just as important as the audit itself.  Many hotels will score poorly year after year.  Passing the internal audit should be on every Controller’s list of goals and yearly review.

The Importance of Random Bank Audits

audit-stampConducting random audits of your cashier banks is one of the most important actions you can perform to keep theft out of a hotel.  Even though it is so pertinent, almost no hotels actually conduct the random bank audits as part of their normal operations routines.

Why is conducting a random bank audit so important?  If you have an employee who is stealing cash during their shift, they need a place to store the cash they are going to steal.  They typically store the cash in the drawer and then pocket it at the end of their shift when they are closing out their paperwork.  This often applies to guest service agents, bartenders, gift shop cashiers, and coffee shop baristas.  A good program of random bank audits can be one of the most important tools to help you keep theft out.

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Perpetual Beverage Inventory How-To Video

mqdefaultPerpetual Beverage Inventory How-To Video

Training Video Goal: Successful implementation of perpetual beverage inventory by providing instructions and necessary tools

Training Video Length: Approximately 10 Minutes, Video can be paused and replayed at viewer’s chosen speed

Training Video Audience: All Food and Beverage Managers implementing a perpetual beverage inventory system

This video takes approximately 1 minute to load and will automatically play once loaded. For your convenience, all templates and instructions that are mentioned in the video are available free for download on this page below the video.

To download the Perpetual Beverage Inventory Template in Excel Format, click here.

To download the Perpetual Beverage Inventory Template instructions in PDF format, click here.

To read an article on Perpetual Beverage Inventory, click here.

To download the free Banquet Bar Requisition Template in Excel format, click here

To download the Banquet Bar Requisition Template instructions in PDF format, click here

Basic Bar Internal Controls

liquor-bottlesControlling your beverage cost is about much more than hiring the right bartenders and being hopeful that they are honest.  Whether your hotel just opened a brand new bar or have had one for many years, make sure that you have these 12 basic internal control standards in place to protect your bottom line.

1.  Position the POS terminal so that customers can see transactions rung up. Most bars have the POS screen positioned towards the bar so that the bartender must turn their backs to use the register. This helps on two fronts; first, all guests can see their transactions rung up and second, it is tougher for the bartender to see who is watching him or her ring up the transaction, making it less likely that they will risk using POS manipulation. If your bar design does not allow the terminal to be placed this way, consider installing a display arm that can be positioned to face the guest similar to ones in retail stores.

2.  Ensure that it is your bar’s standard to have alcohol poured first when preparing mixed beverages. Pouring the mixer into the glass before the alcohol can only mean one thing; your bartender is attempting to adjust the perceived alcoholic strength of the beverage. This is a good indicator that your bartender may be pouring less per drink to steal so that it will not throw inventory levels off.

3.  Require the bartender to give a receipt after each transaction. This is one of the simplest standards to use yet many bars obviously do not require the bartender to give one. Make sure that your bartender knows that if a guest pays cash, it is not some secret code for, “I do not want a receipt.” Even if most of the guests throw the receipts away, at least your bartender gave them one and hopefully rang up the transaction.  Check out our article on how bartenders split and re-present checks with the POS.

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