Tag Archives: Internal Controls for Liquor

WSJ Reports Businesses See Rise In Employee Theft

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WSJ-LogoThe Wall Street Journal posted a great article on the rise of employee theft as a result of the recession.  You can read the entire article on MSN’s Money page here.  The article reports that ‘New research shows that employers are seeing an increase in internal crimes, ranging from fictitious sales transactions and illegal kickbacks to the theft of office equipment and retail products meant for sale to customers.’  The article also mentions that ‘To many employers’ chagrin, the workers guilty of the most grandiose theft frequently turn out to be those deemed to be highly trustworthy’.

We have seen a dramatic increase in internal theft while in the field and expect to see a continued increase in 2009, especially in employees who rely on tips for a large part of their salary.  Many hotels have been forced to dramatically reduce the number of hours as occupancy declines and many of the hotel restaurants have slowed down.  Many employees are now really struggling to make what they made in the past and most cannot afford to take a pay cut and still pay their monthly expenses.     Continue reading →

How to Calculate Beverage Cost

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Surprisingly, many people that are in food and beverage management positions and even general management positions do not know how to calculate beverage costs, one of the most important costs in every hotel’s budget.  Don’t worry, we won’t tell!  We will help you keep that secret by showing you how beverage cost is calculated.  It is really quite simple.

Here is the way that most actual costs are calculated.  This is the cost that you usually try to get as low as possible in order to beat your budget.

First, you will need your bar’s total purchases (in dollars) for the period.  Remember, these should be liquor purchases only.  Second, you will need to know your change in liquor inventory (in dollars) for the period.  You will then subtract the total change in inventory from the total purchases (if the total change in inventory is negative, keep it that way but still subtract it from total purchases).  We must take into account the inventory change because if you do not, purchasing more liquor to stock up would drive your liquor cost up while lowering your inventory by purchasing less would lower your liquor cost.  If the liquor inventory is not considered, your liquor usage will not be properly seen in your cost calculation.  Lastly, you will need your bar’s total liquor revenues for the period.  Divide the first (purchases – inventory) number by the revenues.  That final number will be the cost percentage for the period.  A formula for those of you that need to see it visually is below.

 Actual Cost Formula

Check back soon for more useful tips that just might make your job easier.

Perpetual Beverage Inventory How-To Video

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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 the 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

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Controlling 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 has 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.

Continue reading →

Book Report: Preventing Internal Theft, A Bar Owner’s Guide

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preventingThis book, written by Robert Plotkin, has been around for quite a few years and is in its fourth or fifth printing.  The book does a very good job of covering internal theft in bars.  The chapters range from ‘Exploring the Causes of Theft’ to ‘Preventative Measures’.  At 96 pages long, the book is an easy read and serves as a decent reference.  If you are new to beverage control, you will find yourself going back to the book time and time again as you try to improve the controls in your bar.  A more experienced Bar Manager will not find much of the book very useful.

While there is a lot of great advice on preventative measures, the book does feel a little outdated.  Also, many of the recommendations for beverage control seem very costly when it comes to supervision.  Hotels that do not have a F&B Manager on the floor at all times will have a very hard time with the recommendations.  In addition, many of the recommendations are just way too time-consuming, and small to midsized hotels will have a hard time finding the time and manpower to do them.

Overall, we recommend the book for managers who are new to beverage control.  Veteran managers can probably skip this book.

Banquet Bar Requisition Template and Instructions

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Click here to download our free Banquet Bar Requisition Template

To download these instructions in PDF format, click here

Logo_Mark-Five_Diamond_HospitalityInstructions for using the TrueGuest Banquet Bar Requisition Worksheet To set up the file:

1. Create a new file for each event. You can either create a new file for each month or add each month to a separate tab within this worksheet.

2. Input the details of the event at the top of the spreadsheet. Only fill in the cells that are in blue!

After you requisition the liquor to banquets:

1. Fill in the amount that you requisitioned in the column labeled ‘requisitioned’.

2. Again, only fill in the cells in blue.

3. Add additional rows for additional types of liquor not listed.

After the event and banquets return the unused alcohol:

1. Fill in the amount that is returned in the column labeled ‘returned’

2. Again, only fill in the cells in blue.

To view your cost for the event:

1. Input the amount of revenue you collected for the event at the very top of the spreadsheet.

2. Your cost for the event will be displayed right below your revenues.

3. Send a copy of the worksheet to accounting so they can transfer the amount to banquets.

To download these instructions in PDF format, click here

Book Report: Burning Down the House

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burningWho has read ‘Burning Down the House: The Infamous Waiter & Bartender’s Scam Bible’?

This book was actually written to teach bartenders and servers how to steal from their restaurants and bars. The tagline on the back reads ‘Diners and Managers, beware!  Waiters and bartenders, give yourself a raise!’

It was written by two servers who work on Bourbon Street.  It is a quick read, you could probably finish it on your lunch break.  It is a very dangerous book! It covers the simple scams like check representing and the more complicating scams like the wagon wheel. A couple of the scams are far-fetched or out of date, but the book does a good job of describing all of the ways a server or bartender can steal from your hotel.  The book is also pretty entertaining.  It is written in an edgy fashion and includes chapters like ‘Suggestive Stealing’ and ‘The Buffet Scam’.

Please add your comments about the book below… and if you buy the book, don’t leave it sitting around your office where your servers will see it!

Perpetual Beverage Inventory Template and Instructions

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

To download these instructions in PDF format, click here.

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

Instructions for using the TrueGuest Perpetual Beverage Inventory

To set up the file:

Finally, Some Solutions to Control Your Banquet Bars… and Increase Sales!

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We often get calls from hotels whose banquet bars are out of control. Whether the liquor pour cost is high, the employees are stealing cash or clients have complained about being overcharged on a host bar, the main culprit is usually a poor system for recording sales.

While our hotels all have the most advanced property management systems at the front desk and the most advanced point of sales systems in our restaurants and bars, our banquet bars have cheap cash registers purchased from Costco! Or worse yet, the old adding machine tape next to the cash drawer!

Finally, technology has caught up with the demand. Most hotels use the MICROS 3700 or the MICROS 9700 point of sale system in their restaurant and bars. Now it is very easy to add on an affordable, portable terminal and put in the same controls in your banquet bar as you have in your restaurant bar. The terminal runs on wireless internet and connects to your existing point of sales system so it is ultra-portable. All that it needs is power. Depending on the size of your hotel’s banquet space, most hotels can get by with only one or two terminals.

How will adding a point of sales system to your banquet bar increase sales?

1. Your hotel will now be able to accept credit cards at a banquet event. People tend to spend much more money at a place (especially a bar) when using a credit card.

2. Many people at a business event will not purchase drinks unless they can use a company credit card and get a receipt. If you have ever attended an HFTP event, you have been in line behind a group of Controllers that want to pay with a company credit card and need a receipt for the expense report!

3. You will greatly reduce your risk of employee theft. You may be losing 20 percent of your revenues to theft right now. With a POS, the bartenders will have to ring up each item and present a receipt. More of the hotel’s money will make it into the register instead of ‘accidentally’ going into the tip jar.

If you have installed a Point of Sales System in the last few years or are planning to install one in the future, be sure to consider incorporating a banquet bar terminal. It will pay for itself in no time!