A popular hotel in the heart of Dublin was struggling to control its retail revenue streams and contacted Venners for support.
Identifying losses through covert observations
Our consultants were briefed to uncover the level of lost profit caused by poor controls and to provide guidance to remedy the losses. We were confident covert observational auditing of the hotel’s bar staff would expose the root cause of the losses and would help us pinpoint how they could achieve full revenue capture with reduced revenue losses in the future.
The bar was run by enthusiastic management and staff. Nevertheless, the covert observation revealed a series of issues that needed addressing quickly.
Through close observation of the hotel’s food and beverage operation, it became apparent that stock control needed to be improved.
Recent event days had been successful for trading, but had also resulted in an excessive amount of leftover stock that was not being sold through at a reasonable rate. A large amount of stock in the storage rooms was also found to be out-of-date, showing that stockholding needed more attention. The haphazard ordering process of single rather than bulk purchases indicated that stock rotation too needed attention.
Worryingly, the security of stock and cash on site was being compromised due to an assumed level of goodwill from staff and lax security measures. Certain staff members were given an unsafe amount of responsibility. The cellar manager, for example, was solely responsible for the wine cellar during week days, whilst at weekends bar staff themselves had free access to stock. Cash floats too seemed to contain excessive amounts of cash and the way junior members had access to these could easily result in “cultural issues” in the future.
Addressing losses by implementing tighter controls
Our consultants recommended improved logging and record keeping. With strict procedures in place, staff members with access to stock and cash could now be held accountable for any variances. For this reason we also helped them upgrade and develop their EPoS system so that it would enable the tracking of each individual staff member, making everyone accountable.
Better logging procedures would also ensure that stock control requirements, such as the checking and signing off of deliveries were being completed. It would ensure correct revenue figures were being maintained, sales records were up to date, staff drink quantities managed and room billing errors were being avoided.
In order to reduce stockholding and remove risks associated with out-of-date stock (losses that could reach into the thousands), better forecasting was required. The updated EPoS version allowed for better analysis. Additionally, achievable GP%s could now be forecast and compared with actual sales figures, so stock reports provided more meaningful data.
Overall, this was an enjoyable project to work on as it allowed us to significantly improve our clients profitability by helping them implement better systems, protocols and stock control measures. For a free 30 minute consultation with one of our consultants get in touch with us now!