Does One Employee Have Too Much Control Over Your Restaurant’s Money?

By ProfitWise - a Visa Business Plans company

A restaurant owner once told us how much he trusted his manager.

“She handles everything,” he said, and he meant it as a compliment.

The manager had been with him for years. She handled vendors, bills, and deposits. She had access to the restaurant’s accounting system and helped resolve discrepancies when something didn’t match.

From the owner’s perspective, having someone who handled all of that was a huge relief. He could focus on the restaurant instead of spending his evenings dealing with paperwork.

Then one day, something didn’t add up.

It wasn’t a dramatic amount of money missing from the bank account. It was actually much less obvious. A vendor balance looked strange, so the owner started asking questions. One question led to another, and eventually he realized there was a bigger problem: the same person who handled much of the restaurant’s financial activity was also the person responsible for checking whether it was correct.

That’s a situation we see more often than restaurant owners might expect.

Restaurants run a tremendous number of transactions every week. Credit card payments, cash sales, vendor invoices, refunds, tips, payroll, food purchases, and countless smaller expenses. When the restaurant is busy, giving one trusted employee responsibility for all of it can feel incredibly efficient.

And for a while, it usually is.

The concern is what happens when nobody else is regularly looking at what that person is doing.

This doesn’t mean you should assume an employee is stealing from you. In many cases, the issue is simply a mistake that continues for months because the same person who made it is also reconciling the account. Maybe a vendor gets paid twice. A credit isn’t applied. A refund is entered incorrectly. A cash deposit doesn’t match what the POS system shows.

When responsibilities are shared and someone else reviews the information, those things are much more likely to be noticed.

Some parts of a restaurant also make sense with a little extra oversight.

Take vendor payments. The person entering an invoice into the accounting system doesn’t necessarily need to be the same person approving the payment. Likewise, if someone prepares the bank deposits, having another person compare those deposits with the POS reports creates a simple second set of eyes.

The same idea applies to bank reconciliations. If an employee can create a vendor, enter a bill, pay that bill, and then reconcile the bank account without anyone reviewing the work, that employee has an enormous amount of financial control.

At ProfitWise, this is one of the things we naturally pay attention to when working with restaurant clients. As we handle the bookkeeping and review the financial activity, we may notice an unusual payment, a duplicate transaction or something that doesn’t match the restaurant’s normal pattern. When that happens, we ask about it.

Sometimes the explanation is completely ordinary.

Other times, that question catches something the owner didn’t know was happening.

The solution doesn’t have to be complicated. A restaurant owner doesn’t need to personally approve every $40 produce invoice or spend Sunday night comparing receipts. The idea is simply to make sure no single person can control an entire financial process without someone else occasionally looking at it.

Trust is incredibly important when you run a restaurant. You depend on managers and employees to take care of the business when you can’t be everywhere at once.

Good financial controls don’t replace that trust.

They help protect it.

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