Implementation and Review of Internal Control
The internal control is all the more important in the hospitality industry. In normal business houses; the sale is carried out for a limited period of eight to ten hours a day and almost all the sale is made from a sale counter managed by the owner himself or by his confidant. But in the hotel industry, the cash, as well as credit sale, is made from various outlets and that too 24 hours a day and 365 days a year.
At hotels, we sell a different kind of food and beverage products both produced at various kitchens of the hotel and procured from outside. We also sell various types of services like the health club, swimming pool, beauty parlour, secretarial services, telephone services and travel services and so on. These sales are made to both in-house guests and outsiders.
Keeping in view the above facts it becomes very important that we have an effective control over these outlet sales. It is not always possible to have a management eye watching cashiers and other staff members engaged in selling various services, presenting check (bill), settling bills and returning back the balance and receipts.
To ensure that staff does not get tempted to pilferage the cash sales, certain control procedures are developed for the restaurant/ bar/ other departments sales.
The instruments used for the Food and Beverage Service Control are as follows:
- Kitchen Order Ticket (K.O.T)
- Restaurant Check
- Restaurant Sales Summary Sheet
- Kitchen Summary Sheet
- Guest Weekly Bill
- Visitor’s Tabular Ledger (V.T.L)
1. Kitchen Order Ticket (K.O.T.)
The four copies of K.O.T are made. The order is taken by the captain on K.O.T. The original copy of the K.O.T is given to Aboyer(Barker) to place the order. After the
food has been picked up by the pick-up waiter, this copy of the K.O.T is kept in the locked K.O.T Box, which is taken by the control department at the end of the day or shift for control purposes.
The first carbon copy is given to cashier so that he can make the check. The second carbon copy is given to pick up waiter so that he can pick up the food from the kitchen. The last copy is kept at the sideboard (dummy waiter) for the reference of captain or stewards and this helps in service.
2. Restaurant Check
Restaurant check is either prepared by cashier or waiter but is usually priced and totalled by cashier. To pick-up the food, the check is shown by pick up waiter and the check items are ticketed by barker before giving the food. On demand, all the four copies of the check are presented to the guest, either he pays in cash or he signs and puts his name and room number or he settled his bill through credit card or debit card.
If he pays in cash than the original copy of the check is returned to him with the stamp of paid and cashier’s signature as a receipt, but in case he signs as a resident or as a credit card holder than original copy is send to front office and the first carbon copy is given to the guest for his reference. The second carbon copy is send to accounts department and the third carbon copy is for control department.
In case a restaurant check is lost by the waiter than he is liable to pay Rs.1, 000 as a fine along with the price of the check (The check’s price can be ascertained with the help of K.O.T.). In case a check is lost by the cashier then he is liable to pay the fine instead of the waiter. When a check is issued to the waiter, he is required to sign in the Restaurant’s sales summary sheet and when he returns the check to cashier he takes the stub duly signed by the cashier as a proof that he has returned the check to the cashier. The stub has the details like Check No., Table No., Waiter No., and No. Of Pax, K.O.T. No. Along with the price of the check. The waiter is required to keep the stub for three days; the period may differ from hotel to hotel. The lower portion of the check (below the remark ‘please do not sign if you pay cash’) is perforated and can easily be tore and handed over to waiter as his receipt.
3. Restaurant Sales Summary Sheet
On this summary sheet cashier maintains the complete record of restaurant sales. When he issues a check to pick up waiter, he gets his signature and when he (waiter) returns the check to the cashier then the lower perforated portion of the check (stub), along with cashier’s signature and stamp, is returned to the waiter and this is his proof that he has returned the check to the cashier. In case this check is lost than the responsibility is fixed on cashier or waiter and who-so-ever is held responsible, is required to pay the price of the check and a fine of ₹ 1,000. The restaurant sales summary sheet is prepared in duplicate and a copy each is sent to the accounts department and control department.
In case guest settles his bill in cash than the amount received is shown in the cash column and discount allowed is shown in the discount column. In case the guest settles his bill by signing (either as a hotel resident or as a credit card/ debit card holder) than the total amount is shown in the ledger column and in the remarks column the Room Number, Name of the Guest, Credit Card Number / Debit Card Number and other details are entered. Cashier signs in the Signature column.
4. Kitchen Summary Sheet
The Chef prepares a Kitchen Summary Sheet with the help of K.O.T’s. This is also known as Kitchen Cost Sheet. This summary sheet is prepared in duplicate and a copy each is sent to the Accounts Department and the Control Department.
5. Guest Weekly Bill
For each resident of the hotel, a guest weekly bill/ guest bill is prepared. All debit and credit vouchers along with room tariff are posted in this bill and as soon as guest desires to check put this bill is presented to him for settlement. For control purposes, a copy each of this is sent to control department and accounts department. But the original copy, in case f cash payment, is given to the guest as his receipt. In case of guest signs, the bill than original bill copy is sent to the company for collection by accounts department and the bill is transferred to ledger accounts and transferred to Account Department for collection.
6. Visitor’s Tabular Ledger
For all the hotel residents of a day a Visitor’s Tabular Ledger is prepared. It is also known as Day Book. For every day, a new ledger is prepared. On this ledger, the room rent and all the vouchers for all the guests are recorded. The Visitor’s Tabular Ledger
gives the total sale of the residents of the hotel (but the cash paid by residents in restaurants is not recorded here). A copy each of this ledger is sent to the control department and accounts department. In case the hotel has the computerised accounting system than the restaurant sales summary sheet, guest weekly bill, kitchen summary sheet and visitor’s tabular ledger are automatically made and the control department can have their printouts on their computers. In some hotels, a separate K.O.T. is not prepared; the restaurant check is prepared by machine/computer. The monitor of the kitchen shows the order and a K.O.T. in leaf form is not given to Barker. For ordering the food there is no need to show the check because the order is only placed on the computer if a check is prepared.
Limitations of internal control
A system of controls does not provide absolute assurance that the control objectives of an organization will be met. Instead, there are several inherent limitations in any system that reduce the level of assurance. These inherent limitations are as follows:
- Collusion. Two or more people who are intended by a system of control to keep watch over each other could instead collude to circumvent the system.
- Human error. A person involved in a control system could simply make a mistake, perhaps forgetting to use a control step. Or, the person does not understand how a computer system is to be used or does not understand the instructions associated with the system.
- Management override. Someone on the management team who has the authority to do so could override any aspect of a control system for his personal advantage.
- Missing segregation of duties. A control system might have been designed with an insufficient segregation of duties so that one person can interfere with its proper operation.
Consequently, it must be accepted that no system of internal controls is perfect. There is always a way in which it can fail or be circumvented.
