OH 9-1

Protecting Revenue10OH 9-1

OH 9-2

Learning ObjectivesAfter completing this chapter, you should be able to:

• Identify and explain the three parts of a revenue collection system.

• List the external and internal threats to revenue security.• Explain the basic control standards to safeguard cash and credit card information.

• Describe the four steps in the revenue security system.

• Explain several ways to discourage theft by employees.

OH 9-3

Learning Objectives continued:After completing this chapter, you should be able to:

• List two important areas affected by accounts payable.

• Describe the steps in verifying the receipt of goods and services.

OH 9-4

Three Parts of a Revenue Collection System

Charging the Guest

Collecting Revenue

Protecting Cash Assets

OH 9-5

External Threats to Revenue Security

Cash Open tab

Counterfeit currency

Credit Cards

Personal Checks

OH 9-6

Internal Threats to Revenue Security

Poor hiring practices

Ineffective internal controls

Lack of checks and balances

OH 9-7

Enhancing Revenue Security

Safeguarding On-Premise Cash Monitor bank verification and check out sheets

Limit approval of voids and overrings

Assure generation of receipts

No person with access to accounting records handles cash

Change safe combinations when those with access leave employment

Conduct safe audits on an irregular basis

OH 9-8

Enhancing Revenue Security

Safeguarding On-Premise Cash Cash is kept in safe

Cash is deposited daily

Safeguarding Customer Payment Card Information PCI data security standard

OH 9-9

The Four Step Revenue Security System

OH 9-10

Verifying Product Sales

Kitchen Issues

Guest Checks

OH 9-11

Verifying Guest Charges

Server Reports

Shift Reports

OH 9-12

Verifying Payment

Cash Control

Credit and Debit Card Payments

Coupons and Other Payment Forms Employee meal discounts Guest relations discounts Marketing and promotional discounts Police, firefighter, senior, military discounts Comps

OH 9-13

Verifying Deposits

Cash

Payment with credit cards and debit cards

OH 9-14

Cash Audits

Cashier and Server Banks

Petty Cash

OH 9-15

Pay invoices on a predetermined schedule established by business

Verify that all invoices paid are legitimate

Minimize the amount of time and expense in processing paperwork

Managing Accounts Payable

OH 9-16

Verifying receipt of goods and services

Verify amounts due

Invoice payment

OH 9-17

Chapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting Revenue

Key Terms:Accounts payable The amount of money that an operation owes suppliers from which it has purchased goods, products, or services.

Auditing A financial examination of an organization’s accounts.

Card verification value (CVV) The three-digit code on the back of most credit cards.

Collusion The working together of two or more employees for dishonest purposes.

Counterfeit currency Money that is produced to resemble official legal currency closely enough that it may be confused for genuine currency.Extension The price of an item multiplied by the number of items being purchased.

Fraud An intentional deception to cause a person to give up property or some lawful right.

OH 9-18

Chapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting Revenue

Key Terms continued:Guest relations discount A discount on a meal offered by a

manager because the guest was not satisfied with the quality of the food or service.

Merchant account A designated account where funds from guest credit card payments can be sent.

Merchant services provider A company that facilitates the transaction between an operation and the card issuer, also known as clearing.Open tab A temporary guest charge account that allows guests to purchase and consume products before paying for them.

Overcharging The act of charging more than the amount that should have been charged and collected.

Payment Card Industry (PCI) A data security standard. A series of technology requirements for retailers and companies that process credit cards, which are designed to ensure the protection of cardholder data.

OH 9-19

Chapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting RevenueChapter 10 Protecting Revenue

Key Terms continued:

Service charge A labor-related fee, added by the manager, to be paid by guests.

Petty cash A small fund established to handle minor cash disbursements.

Undercharging The act of charging less than the amount that should have been charged and collected.