Hotel and restaurant Purchasing and Receiving control Tips:
Hotels and restaurants must purchase a wide variety of products, supplies, and services in the course of daily operations. There is a less concern about theft In small properties where the owner/manager is directly responsible for the purchasing.
For a Large hotel or a restaurant chain where more people become involved in purchasing, there is a chances of theft. This is also a weak area for the hotel security because it is very difficult to monitor and catch the theft. This mainly because there will be a very good understanding between the purchasing officer and the suppliers.
Theft can occur during the purchasing process in a number of ways like Kickbacks, Use of fictitious companies, processing thefts, credit memo problems, intentional delivery invoice errors, quality substitutions, and more. These problems can be prevented, by implementing effective purchasing and payment procedures in your hotel.
Below are some main points when it comes to asset protecting in hotels and restaurants:
- Maintain a division of duties.
- Fix responsibility in one individual.
- Limit the number of employees with access to assets.
- Keep cash banks and stores to a minimum.
- Have third-party employees or auditors perform surprise counts.
- Bond employees with access to cash, records, or stores.
- Schedule mandatory vacations and rotate employees.
- Conduct frequent external audits.
- Use cost-benefit analysis.
- Reduce the number of products purchased from the same vendor.
Kickbacks: occur when the purchaser works in collusion with someone from the supplier's company. One type of kickback involves purchasing products at higher prices than normal with the added charge being split by the purchaser and the supplier's employee.
To control this kind of theft, management should regularly review invoices. If a seemingly inordinate number of products is being purchased from a single supplier, Hotel may wish to investigate the situation.
Hotels should also consider a formal price quotations randomly to ensure that the prices it pays are competitive.
Dishonest purchasers may create fictitious companies and sell products to an operation for the nonexistent goods. The checks for such products are usually sent a post office box. To help combat this form of theft, management or appropriate accounting function employees should periodically review the company checks sent to suppliers. Unless the hotel is very familiar with the supplier, it may wish to consider establishing a policy of not sending checks to companies with only post office box addresses.
Processing thefts: occur when suppliers request payment for an invoice more than once. The hotel and restaurant needs an effective internal control system to verify whether an invoice has already been paid or not.
Dealing with delivery invoice errors brings up an important point. A number of potential purchasing losses or thefts can be detected during receiving. For this reason, many properties choose to separate the purchasing and receiving functions. If a dishonest purchaser is allowed to receive products, he or she is much more able to hide any thefts. Now a days there are software available in the market which is integrated to the weighing scale so as to reduce the chances of employees entering incorrect weight on to the system.
Hotel or restaurant manager may find it helpful to maintain a roster of sources for purchases made through the purchasing office. This list has to be reviewed occasionally with the purchasing director and the director of the department for which the purchases are made is also helpful.
The general manager, chef, and food and beverage manager should also meet occasionally to review the price and quality of products purchased. Another element of control over certain purchases can be obtained by requiring multiple price quotations. For large purchases, management can insist on sealed bids and should participate in the bid opening and evaluation.
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