How To Find What Was Not Rung Up

Voids cancels, and over-rings might be the single greatest exposure to  quick-serve restaurant profitability, according to a recent study.  A clever employee, especially in the bar or drive-through, can easily double his compensation.  Unfortunately, all POS (point-of-sale) systems are designed with a few "holes" in the audit trail.

Fortunately, some of the holes in the audit trail of your POS system might be exposed in the reports.  The most effective method of determining if one or more employees is giving out free food or worse yet, collecting the money and not putting it in the drawer, lies in watching for ordering ratios and trends.  A little about that later.

The Employees

Once an employee succumbs to various pressures and discovers a way to fool the system, he will necessarily need to use the newly-discovered trick repeatedly.  He will spot a flaw in the controls and procedures to work it to his benefit.  The worst that can happen is he shows it to other employees.  Some employees will possibly adopt the trick, but thankfully, most won't.  But, with a flaw in controls and of procedures, the employees start to think about how easy it would be to give into temptation and basically-honest employees start to feel emotional conflicts.  Under this pressure, they start to rationalize – “everyone else is doing it”, “it’s understood that it is part of my compensation”, “if I don’t make enough money, I won’t be able to work here anymore and the restaurant will suffer” – are but a few justifications to yield to the temptation.

Ratios and Trends

Once an employee has spotted an opening, he needs to use the

sequence or trick more often than the other employees.  Now you got him!  If you can identify key ordering ratios and compare those ratios to other employees, a pattern will come into view.  For example, in a coffee house, a lower ratio of medium/large coffee drinks to small might indicate that he is making and charging for large drinks, but ringing in small drinks.  If the customers don't get receipts, they are none the wiser. 

At the very least, the employee is not up-selling very well!  Another example is in the bar.  If one bartender's ratio of draft beer to bottled beer is too low, that might lead to the conclusion that he might not be ringing up all the draft beers.  Bottled beer is very easy to control, draft beer is much harder.

Trends can also point to potential problems.  If an employee's sales of a particular item has fallen off in the last week or two, it could be that this employee has discovered an opportunity.  An example might be a drop in desserts by a dining server or a quick-serve cashier.  Servers get these items themselves in many restaurants, and it is easy to serve desserts to their friends or big tippers without ringing them in.

What Now?

The most effective approach is to use the processing power of a computer.  All employees fall into behavior patterns after working in the restaurant for a while. 

“The challenge is to compare the behavior of all the employees to each other and to themselves over time.  This approach is the only way to consistently ferret out the potential losses. 

 All cash-drawer openings and closings, all orders, all voids, discounts, certificates, miscellaneous sales, comps, and tips need to be analyzed and filtered for non-standard behavior.”, says Brian McMillan, Analyzer Product Manager for In Sight Commander Systems.

Under this pressure, they start to rationalize – “everyone else is doing it”, “it’s understood that it is part of my compensation”, “if I don’t make enough money, I won’t be able to work here anymore and the restaurant will suffer” 

In Sight Commander Systems has developed a suite of programs that analyzes restaurant employee behavior and activity in order to highlight potential problem areas.  If an alert is detected by The Analyzer, the owner or manager is notified by email.  The owner can then access the computer at the restaurant and view the actual detail of the behavior that caused the alert. 

Video cameras may be effective for insurance, Workers’ Comp, and liability issues, but need to be part of a more complete system in order to be effective as loss-deterrence tools.

Brian McMillan is Director of Product Development of In Sight Commander System, Inc.  a software development company specializing in restaurants and video surveillance systems.  He can be reached at (714) 940-9800 or http://www.insightcommander.com/