EMBEZZLEMENT PREVENTION IN BARS IS DIFFICULT

One of our younger, brilliant accountants submitted this information about embezzlement in bars - there are two issues:  one is embezzlement because it is partly a cash business  and the other one is tip reporting.   I agree with with Danny's assessment.

The environment in a bar is a perfect setup for embezzlement:  ....

.....lots of cash, alcohol, loud music, loud people, confusion, etc, etc.

Danny says:  To stop embezzling at a bar ma be a tough thing to do.  In the past, I worked to tips and the employer actually had an electronic device in which the employees used to record their tips.  The problem with this is that people only record their tips up to the minimum wage (this is all they would have to pay taxes on) and would pocket the rest of the money.  This is one (ineffective) way to keep track of tips but, of course, does not ensure anything close to accuracy.  Another issue is embezzling cash and calling it part of a tip.

The only way to prevent embezzlement in any establishment and properly report tips is to hire honest people....in a bar?  huh?  Nice thought.....

One suggestion is to have a tip jar that is locked under the counter and the manager has the only key (other than one in a lock box).  Tips are placed in the jar, the manager counts the tips and divides them equally among the employees.  This method, along with a sober manager who watches and monitors, may help with tip reporting; however, dividing the tips equally would do nothing for employee morale!

This method may help take care of reporting tips properly; however, it does not resolve the issue of embezzling the cash and calling it part of a tip.  Perhaps the "sober monitor" approach would help.  The "sober monitor" would have to cost less than the cash being embezzled.  How would you know?

DON'T LEAVE YOURSELF NAKED TO EMBEZZLEMENT!

Comments

[Tom Burris]

I actually helped a sole proprietor set up an inventory system back in 1986 or 1987 to monitor his inventory nightly.
Seems that some bartenders went thru more alcohol than others.
I saw some new faces there soon after. LOL