Chapter 10
Internal payroll system:
General weaknesses in the payroll system:
1. No segregation of duties in payroll or H.R department
2. No personnel files being maintained for employees
3. No review or authorisation for overtime hours
4. No formal approval for increments and promotions
5. No monitoring of clocking in card process
6. No check on wages calculation generated by the system
7. Pay slips are handwritten
8. Rate increment decisions only taken by H.R and not by the board
9. Pay packets are handed over to supervisors
10. Major calculations done by clerks
, Weaknesses Recommendation
Restaurant manager has access to safe The key lock safe should be replaced with
keys and he keeps them in a drawer when a digital safe with code to avoid and
not in use. If the key is stolen by someone minimise the risk of cash being stolen.
all the cash in the business will be stolen.
Cashier is responsible for many tasks like All roles should be split between different
receiving sales sheets, agreeing cash members of finance team to minimise
book, updating of cash book and chances of fraud and error.
reconciliation. This can result in increased
chances of fraud as one person is
managing all the important tasks and is
over burdened.
Reconciliation is being performed every 2 The bank reconciliation should be done
months this will lead to any sort of errors every single month to ensure that any
and discrepancies not being found and errors are identified and resolved on time.
resolved on time.
At the end of each day only the Cash should be counted and reconciled by
restaurant manager counts all the cash at least 2 individuals to minimise the
and reconciles with daily readings and chance of any sort of fraud.
notes any discrepancies. This can be
wrong for the company as restaurant
manager can steal some cash and write it
down as a discrepancy.
Internal payroll system:
General weaknesses in the payroll system:
1. No segregation of duties in payroll or H.R department
2. No personnel files being maintained for employees
3. No review or authorisation for overtime hours
4. No formal approval for increments and promotions
5. No monitoring of clocking in card process
6. No check on wages calculation generated by the system
7. Pay slips are handwritten
8. Rate increment decisions only taken by H.R and not by the board
9. Pay packets are handed over to supervisors
10. Major calculations done by clerks
, Weaknesses Recommendation
Restaurant manager has access to safe The key lock safe should be replaced with
keys and he keeps them in a drawer when a digital safe with code to avoid and
not in use. If the key is stolen by someone minimise the risk of cash being stolen.
all the cash in the business will be stolen.
Cashier is responsible for many tasks like All roles should be split between different
receiving sales sheets, agreeing cash members of finance team to minimise
book, updating of cash book and chances of fraud and error.
reconciliation. This can result in increased
chances of fraud as one person is
managing all the important tasks and is
over burdened.
Reconciliation is being performed every 2 The bank reconciliation should be done
months this will lead to any sort of errors every single month to ensure that any
and discrepancies not being found and errors are identified and resolved on time.
resolved on time.
At the end of each day only the Cash should be counted and reconciled by
restaurant manager counts all the cash at least 2 individuals to minimise the
and reconciles with daily readings and chance of any sort of fraud.
notes any discrepancies. This can be
wrong for the company as restaurant
manager can steal some cash and write it
down as a discrepancy.
