Purchasing / Cost Control / Accounts Payable

1. Documented purchasing procedures exist and are followed.

2. Purchase requisitions are raised and approved before purchases made and goods received.
3. Appropriate competitive bidding procedures are in place and adhered to, where
appropriate.
4. Purchasing activities are reasonably centralised and authority to purchase clearly and
effectively delegated.
5. A market list is prepared daily. Cash purchases are not excessive.
6. There is a central receiving function where goods received are recorded and quantities
verified against invoices and purchase requisitions.
7. Copies of outstanding purchase requisitions are kept by receiving and regularly followedup.
8. Storerooms are physically secure and access reasonably controlled.
9. Procedures regarding monthly inventory physical counts are documented and adhered to.
10. Inventory discrepancy reports are reviewed and approved before journal entries are
processed.
11. Bar beverage par stocks are established and adhered to.
12. Maximum/minimum storeroom stock levels have been established, are published and
adhered to.
13. Slow moving items are identified regularly and actioned.
14. Obsolete inventory items are periodically identified, and written off.
15. Bottle issues to bars are on a full-for-empty policy.
16. Flash food cost reports are prepared regularly.
17. All executive entertainment and employee meals checks in outlets are recorded and
properly approved.
18. Surprise bar inspections are regularly carried out and documented.
19. All menu items have costed recipe cards.
20. Buffet offerings are periodically costed and documented.
21. Market surveys are performed regularly and documented.
22. Adequate physical security is maintained for operating equipment items.
23. All accounts payable vouchers are documented and approved.
24. Supplier invoices are agreed to purchase requisitions prior to payment.
25. A proper filing system is maintained.
26. Accounts payable balance is reconciled to cost control on a regular monthly basis.
Subsidiary ledger is reconciled to general ledger balance monthly.
27. Executives expense reports are verified for proper support and paid only after approval.
Revenue Control
1. Independent cash sales test (shoppers) are performed at least every 3 months and
documented.
2. An income audit checklist is utilised and reviewed by the financial controller or his
assistant weekly, or at least monthly.
3. Room rate variance reports are prepared and a sample of variances investigated at least 3
or 4 times per week by income auditor. Tests documented for audit purposes.
4. Room status discrepancies between FO and Housekeeping are investigated and approved
by management daily.
5. All house-use and complimentary rooms have the prior approval of the GM or his
designate.

6. Detailed lists of complimentary and house-use rooms are prepared daily, approved by
management.
7. Accruals for travel agent commissions are properly maintained and payments processed
on a timely basis.
8. Occupancy and average room rate are correctly calculated consistent with company
policy.
9. Accurate statistics for occupied rooms and revenue by market segment are maintained.
10. Missing restaurant/bar checks are documented and investigated.
11. Open check controls are implemented on a regular basis and documented.
12. Menu prices are periodically verified against the Squirrel or other POS database.
13. Void checks and void items are properly approved by outlet supervisor/manager.
14. Banquet function event orders are sequentially numbered and controlled.
15. Function event orders are copied directly to accounting and correctly filed.
16. All banquet bills are verified against function event orders.
17. Banquet beverage accountability forms (i.e. consumption reports) are prepared and
agreed to banquet guest bills.
18. Proper controls are in place for corkage liquor and beverages to be returned to the
storeroom.
19. Departemental sales summaries are agreed to revenues recorded on a daily basis.
20. House-use telephone calls are properly controlled and reported.
21. Squirell or other POS system daily totals are balanced daily to the PMS.
22. Rebates and Paid-Outs are approved daily by th GM and financial controller or their
designates.
23. Minibar control procedures are adequate and losses reasonable (less than 7% at sales
value).
24. City ledger subsidiary ledger control totals between the PMS and the general ledger are
balanced daily, discrepancies investigated and results documented.
Credit Policy
1. The hotel has a written, up-to-date credit policy which has been distributed and explained
to relevant departments.
2. Credit meetings are held on a monthly basis and minutes taken.
3. Method of payment is verified at the time of check-in (e.g. credit card
imprint/authorization obtained).
4. Deposits are required for banqueting and the credit policy is adhered to.
5. Invoices, monthly statements and remainder letters are dispatched regularly and
promptly.
6. A high balance report for in-house guests is prepared daily and reviewed by management.
7. There is a regular pattern of follow-up and collection efforts documented.
8. Reserve for doubtful accounts maintained in accordance with company policy. Deviations
approved by financial controller.
9. Non-trade receivable accounts are properly documented, reconciled and pursued.