Employee theft could cost your food business thousands — if not millions — of dollars every year. It comes in many forms, from skimming $5 off the cash register to redirecting $5,000 through fake vendor accounts. If left undetected, internal theft could bankrupt your restaurant or cafe.

Fortunately, modern technology and simple processes can prevent unscrupulous employees from stealing cash or foodstuff from your business. This step-by-step guide provides 8 ways to stop servers, cooks and even managers from committing employee theft.

1. Install security cameras in your foodservice establishment.

Restaurants and cafes are busy workplaces. It’s hard for managers or directors to keep an eye on everyone, especially at peak hours. Some employees who work the cash register could use this time to pocket cash. There are also waiters/servers who report fake cases of dine-and-dash. A waiter could claim that customers left without paying for their meal — even though they did. The waiter pockets their money.

Place security cameras in your dining area and kitchen. Make sure you can clearly monitor areas where people have the opportunity to steal. Place a camera above the cash drawer too. This way, you can confirm if there are truly customers who skipped payment and if an employee is skimming cash off the register.
Write a statement in employment contracts that highlight that security cameras monitor the business for safety and loss prevention. Also note that a breach of security or theft may jeopardise the employee’s ongoing employment.

2. Give a dollar-value limit on compensation (comp) and freebies in your restaurant or cafe.

Wait staff who offer lots of comps and freebies get higher tips from customers – at the cost of your revenue. Constantly treating their friends and families to free meals means loss of profit for you. Although comping unsatisfied customers reduces the risk of them ruining your restaurant or cafe’s reputation, this could ruin you financially in the long run.

Implementing policies for limits on how much food and beverages employees can give away, will help keep your losses under control. If the monetary value of comps and freebies surpasses the allotted amount, this might indicate a need to solve operational issues.

Consider using the limited freebies as a positive and fun way to encourage wait staff to register the freebie on the POS, and engage with customers.

Example: Each waiter has a freebie limit of $10 per day. At the discretion of the waiter, he/she can offer a couple of regular diners a free house wine each – so long as it’s recorded on the POS and against that waiter’s freebie total.  The waiter will feel great and so will the diners. This will boost moral and energy in the dining area.

Remember to always make decisions aligned with your sales and budgets.

3. Offer attractive perks to foodservice employees.

Employees commit internal theft for various reasons. Perhaps they are unsatisfied with their wages or they need money for a sudden emergency. You can discourage them from stealing money by providing employee benefits. For example, giving them limited free meals or snacks before service will keep your employees energised and less likely to steal food from the kitchen.  

Stay connected with your team daily. Drive a positive culture with strong and respected leadership. Understand what drives them and how they are feeling to detect nuances in need, mood and attitude.  You may pick up on a risk before it happens.

4. Enable anonymous reporting among your staff.

It’s uncomfortable to think that some of your employees are being dishonest with you, but employee theft occurs every now and then in food businesses. On the other hand, not all employees are out to get you. There are those who value honesty and integrity, who value their jobs and care about your business. These employees are more likely to spot instances of stealing when you’re not around. Unfortunately, they are probably hesitant to report these to you for fear of retribution.

Develop policies for employees to anonymously report cases of theft in your restaurant or cafe. Another strategy is to promote and encourage an honest team culture. A positive culture will naturally expose those who may not fit the values and ideals of your food business.

5. Audit your restaurant or cafe’s inventory regularly.

Are all the consumables and supplies you ordered stored in your establishment? Do you have the right amount of ingredients left in your kitchen, considering how many meals were sold during service? Tracking your food usage, waste and costs helps you spot discrepancies that indicate employee theft. If you keep running out of Grey Goose despite few orders of vodka cocktails (or the stocktake numbers don’t add up), you might need to keep an eye on your bartender.

6. Use a POS system to track and reconcile sales and inventory.

Point-of-sale systems are essential in modern restaurants and cafes. They accurately track sales, cash flow and food inventory. POS systems speed up processes and make bookkeeping so much easier for food business owners. Some employees try to trick you by undercharging or registering false refunds and voids. However, the POS could help you spot discrepancies in sales and inventory. If you see a lot of refunds and voids after office hours, this might be a red flag indicating employee theft.

Check POS reports daily. Check the cash banked matches the POS report totals. Your bookkeeper will raise a flag of there are discrepancies between the POS report and the bank accounts.

7. Implement the blind closeout process for daily reconciliations.

You can add another layer of accountability on your end-of-day bank and POS reconciliations through the blind closeout process. Ask your employee to reconcile cash flow at the end of the day — but don’t tell them how much the total amount should be. You’ll find out if there’s a discrepancy when you compare it to your bank statements and inventory.

8. Do not give full control of financial transactions to a single person.

As much as we’d like to trust our employees, it’s better to put safety measures in place to protect your finances. Prevent false refunds and voids by requiring two people to approve them instead of just one. Employees are unlikely to be in collusion. Openly discuss tracking of your cash flow and inventory closely, opportunistic employees are less tempted to steal money if they know they can’t get away with it.

Perform bank and POS reconciliations with trustworthy bookkeepers.

Organise your books and spot discrepancies with Restaurant Bookkeepers. We are 100% cloud based and can easily help you no matter where you are in Australia.

We will monitor your daily POS transactions with bank accounts and bring to your attention any discrepancies. Weekly or monthly reporting will keep you across how the food business is tracking.

Call us now 1300 043 327 or send a message to our expert bookkeepers.

No contracts. Pay as you go. Start immediately.

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Chris and team – Professional Cafe Bookkeepers, Restaurant Bookkeepers, Hosp Bookkeepers.