As your business experiences the economic impacts of COVID-19, you’re likely deploying many financial relief strategies to weather the storm. We’re sharing some accounting tips from OnePoint’s Manager of Accounting, Bernadette Gonzalez to help you make sure you don’t leak dollars in a time you can’t afford to.
Proper Ring Up and Promotion Procedures
Maybe this is the first time your business is deploying take-out and delivery options. Maybe you’re running a special promotion to help boost sales. Whatever changes your business is enduring right now, it’d understandable if all of your training procedures haven’t kept up.
“One of my accounts was consistently experiencing a cash short and there were always significant screpancies,” says Bernadette
“Once we took a closer look, we uncovered that it was stemming from their ring up procedures. Unaccounted for sales or employee meals/discounts can be one source of discrepancies. This is why it’s important to examine all of your accounts when you’re looking for the source of the error. We informed the client, they adjusted their training procedures, and the errors stopped.”
If your staff isn’t properly trained on how to ring up sales or handle discounts and promotional offers, you might face discrepancies reconciling your next bank statements.
A Crisis Is Not the Time to Abandon Quality Assurance Procedures
In addition to clear processes and good training, a quality assurance system can also prevent errors and help uncover the source of them when they do occur. A good QA will require log ins from all employees, leaving a trail of evidence in the event of any reports of irregularities that may occur during an employee’s shift.
“One of our clients was able to uncover theft because they had such strong processes and QA systems in place,” says Bernadette, “They had three different managers for three different shifts. Instead of one daily deposit each manager was responsible for a deposit at the end of their shift. When $24,000 went missing one month, we were able to pinpoint which deposits were missing and which employee was responsible for it.”
Another element of a good QA is dual verification. Implement a process that has two people count the deposit and two people verify the drop. Also set up clear policies for how frequently you drop and how much money you leave in your safe. This will not only help prevent errors, but help you identify the source of them when they occur.
Watch Your Books for Vendor Error
Business owners need to know not to automatically trust delivery services, merchant processers, banks and other vendors. “Banks make a ton of errors, we see it all the time,” says Bernadette, “This is why record keeping is important. Always keep a record of what you take to the bank, what checks you’re writing, all of it. These errors can be very costly.”
Sometimes a deposit may make it to the bank, but then the bank codes it incorrectly. “You could send a deposit to the bank for $15,000 dollars and it either doesn’t clear, never posts or it clears for $15 not $15,000,” Bernadette warns.
Credit cards aren’t immune from error either. Sometimes the sensors don’t pay the correct amount or make the right deposit, so verify all of your sales.
Delivery service companies are capable of committing the same errors, too. They might not credit you the right amount of money or there could be an error on your invoice.
Digging deeper into these discrepancies can help you not only identify the cause of missing cash, but also ensure the overall accuracy of your financial statements.
“There are so many transactions that happen every day in the POS system. If the ring ups are correct then we know we can expect a certain amount of money,” says Bernadette. “If not all of that money is there, that’s when we begin to investigate vendors, third party merchants, banks, employee training, store procedures or employee theft.
Royalty Fees for Delivery Services
As a franchise, royalty fees are part of your daily accounting activities. On every sale you make, a royalty fee is attached to it.
When working with delivery service vendors, it’s built into your contract terms what happens when a customer refuses an order. For most vendors, the restaurant is responsible for the cost of that order. However, when this happens, this should be recorded as a loss, not a sale and therefore you shouldn’t be subject to royalty fees. Double check your accounting procedures to make sure you aren’t losing valuable dollars unnecessarily.
We know it can be overwhelming to find the time to review all of these important financial documents and successfully run the other aspects of your business, especially now when the economy is in crisis. At OnePoint, our clients rely on us as their trusted accounting partner to monitor for discrepancies and identify problem areas. A good accounting vendor will provide that second set of eyes on your data to help you make sure every dollar is working for you.