Vendors offering high-value gifts or sometimes even cash to obtain supplier contracts with restaurants is not uncommon in the restaurant business. When an employee accepts kickbacks from vendors in return for funneling business to these vendors, he’s stealing from the restaurant. The vendor will usually provide inferior quality merchandise, short-count the order, or charge a higher price to cover the cost of the kickbacks paid.
How can restaurant owners prevent this from happening?
1. Have a written and clear policy on what type of gifts are acceptable and not acceptable to receive from vendors.
2. Replace the employee in charge of purchasing occasionally or rotate the employees’ duties to more easily discover fraud and abuse.
3. Perform surprise counts of the inventory to check if the orders are short-counted.
4. Review the bid sheets for obvious excessive pricing and do some competitive bidding for products purchased.
Allen & Company, PC - a CPA firm serving Kennesaw, Marietta, Acworth, Woodstock and north Atlanta. Providing accounting, financial statement audit, taxation, and advisory services for individuals and businesses. Extensive experience working with franchises.