It’s a cynical statement…that there’s one in every bunch. But we’ve all been in work situations where one employee’s dishonesty negatively affects the entire staff…and your bottom line. However, there are steps you can take to reduce employee dishonesty and crime in your restaurant, and restaurant insurance is a major part of that.
- The majority of fraud in California restaurants, from fine dining to fast food, is theft. It can range from equipment being stolen to taking money and check tampering. The Association of Certified Fraud Examiners (ACFE) conducted a study that showed organizations lose 7 percent of annual revenue to fraud.
Insure Against Potential Catastrophic Loss
Proceeding with care and attention can prevent what ACFE calls potential “catastrophic loss” leading to “disaster” for your restaurant and suggests that someone who leads the organization take “ownership” of fraud risk. If you run a small restaurant, that will most likely be you, the owner. From there, delegate fraud risk responsibilities to your management team. In a small restaurant, that will most likely be your floor manager, your chef and/or kitchen manager and your general manager. Create for them a proprietary sense that they “own” managing those risks. You may well see immediate improvements because the process begins with hiring and is built out from there, extending to all activities within your organization. Always keep in mind that a solid system of checks and balances is a built-in way to prevent loss.
- Insist that background checks be conducted on employee prospects. Check references and be attentive during interviews.
- Do regular inventory.
- Require that two signatures be signed on every check to prevent tampering.
- Form and maintain strong bookkeeping oversight and double-checking system.
- Have one employee check-in inventory while another performs the ordering duties.
Additionally, there are several steps you can take with your professional California insurer to further prevent fraud, loss and shrinkage in your restaurant. Ask us about the best cover for your business in case of computer fraud, forgery and check tampering, computer and fund transferring frauds, employee theft and even more extensive security.
Top Tips on Restaurant Loss Control
Sutherland-Scherff have put together some Top Tips to highlight ways of managing Loss Control for operators of restaurants and food service establishments such as cafes, pizzerias, delis that cook and serve food.
