Rule Out Fraud and Theft

Internal control is the set of policies, forms, and procedures that management establishes to prevent fraud and theft by employees or guests. Controlling food-service outlets presents special challenges, because a single person (the server) can control so much of the transaction. The key to effective internal control of food-service transactions is to divide these four functions among as many people as possible: (1) taking the order, (2) preparing the food, (3) delivering the food, and (4) settling the bill. Proper forms (e.g., guest checks that are accounted for by serial number after each shift) will help managers determine whether any revenue or food items are being diverted. While internal- control procedures can be used to detect fraud, the key to internal control is to prevent fraud or theft in the first place with effective and consistent policies.