Combating Fraud in Hospitality

Hospitality has always been a cash generative industry, but with an increase in ‘card-only’ venues and a reduction of in-person cash sales to 16% (down from 32%in 2019), those looking to conduct fraudulent activities are being more creative than ever.

At Quantaco we have always embedded procedures with our clients to try and mitigate against fraud and fidelity claims (losses directly resulting from dishonest acts of their employees).

This article delves into three key areas of vulnerability – invoices, payroll, and cash control – providing insights into our recommended approach to reducing risk of fraud in these areas.

Invoices: Strengthening the Defence Against Fraudulent Activities

Fraudulent invoices are all too familiar a problem, but the opportunity to manage the risk requires implementing proactive measures. Quantaco recommends:

  1. Digital Systems and Automation: Use digital systems to automate the flow of invoices, enabling the prompt flagging of fraudulent invoices or suspicious activities.
  2. Multiple Approval Levels: Implement multiple levels of approval to establish a robust double-check mechanism.
  3. Verification of Bank Details: Any request to change bank details should be verified with the supplier to prevent potential fraudulent activities. Verification should be done via phone call since scammers frequently adopt the online identity of a seemingly legitimate source, and email verification plays into their hands.

For Quantaco clients, we go the extra mile by employing cloud-based accounts payable software and incorporating multi-levels of approval. Furthermore, our mechanisms for 3rd party validating of new changes to bank details add an additional layer of security.

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Payroll: Safeguarding the Heart of Hospitality Operations

Given the dynamic nature of the hospitality workforce, including casual employees, hourly rates and a transient workforce, payroll emerges as a prime target for fraud. Quantaco recommends:

  1. Time and Attendance Systems: Integrate systems with built-in security measures, such as geo-location and image capture, to ensure the authenticity of those who clock in and out.
  2. Daily Approval of Timesheets: Prompt daily approval of timesheets will help minimise errors and identify discrepancies.
  3. Roster vs. Timesheet Analysis: Regularly cross-reference rostered and timesheet reports to identify what you intended to spend and what you are about to spend in payroll.

Quantaco clients benefit from our deep understanding of industry-leading Time and Attendance systems, ongoing training on new features, and the deployment of robotics for secure payroll processing. This includes the automated upload of payment files to the bank, minimising the risk of data manipulation.

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Cash Control: Securing Physical Assets in a Digital World

Despite the decline in physical cash transactions, certain venues still have a very high volume of cash on premises. Quantaco recommends:

  1. Cash Management Plan: Develop a comprehensive plan to control access to high-value cash repositories, such as CRTs and safes. This includes who and when access is permitted.
  2. Regular Safe Counts: Conduct and record safe counts multiple times in a day, addressing or escalating any discrepancies promptly.
  3. Documenting Cash Transactions: Ensure there is documentation for any cash that has been taken, including receipts for petty cash and vouchers for discounts.

Quantaco’s innovative solution, Cashup, streamlines the daily cash reconciliation process. By providing a secure and auditable environment for cash reconciliation to take place. Quantaco also provides daily reconciliation comparing venue documentation with bank statements, with any variations or discrepancies highlighted, ensuring visibility at all levels of the organisation.

In Conclusion: A Robust System for Mitigating Fraud

Quantaco has successfully crafted an integrated platform and set of processes that collectively help to form a resilient shield against fraud. By minimising manual input and automating data flow, we reduce the opportunities for errors and fraud. Our best-of-breed processes, coupled with a commitment to independence, ensure that our clients receive an unbiased weekly review. In the ever-evolving landscape of the hospitality industry, Quantaco stands as an innovative partner in the fight against fraud, offering tailored solutions to safeguard businesses and maintain financial integrity.

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