Strategies for Optimizing Your FEC Cash Control Procedures
Many FEC owners and operators might spend millions to build their dream facility. Once the doors are open, business may be so prosperous that it’s all they can do to get the money counted and to the bank each day. Everything seems to be going so well, that they don’t spend much time focusing on details. We refer to this as the “Fat and Happy Syndrome.” Then, one day they look up and realize they are in fact losing money, because they failed to implement the proper control systems. We have worked with several clients that have lived through this exact situation. It is much easier, and a lot less costly, to do it right the first time.
#1 – Building a Cash Management Culture
We believe that it all starts with creating the right culture. Every business has one, whether yours is intentional or not. Policies save money, but having the correct culture creates profit and a lot more. A company’s culture is not based so much on the core values posted on a wall, website, or handbook. The culture is actually based on the collective beliefs, and common behavior of all its team members. Once you have the culture in place, there is a strong realization that all must face.
There must be accountability from the top to the bottom, if one wants to have a successful cash control program. In other words, just because you are the owner does not mean that you can deviate from what everyone else is expected to do. Remember, we are training someone, to do something, every second of every day.
#2 – Adopting Best Practices
There is not enough room in this article to elaborate on our entire cash policy, but I want to highlight some of the accountability parts for you. Start the day with a safe count, with only the manager on duty (MOD) being allowed in the safe until it is counted out by another manager. Secondly, each employee must count their register before accepting it, making sure they start with the correct amount. At the end of the shift, the employee counts it out with a manager before they leave. That money then becomes the MOD’s responsibility, and part of their deposit for the day and so on. Only one cashier per register, otherwise you lose the accountability. That means that neither the MOD, the owner, nor anyone else can use someone else’s register for any reason.
Another valuable realization is that 85% of all fraud is committed by frontline employees. Of that 85%, about 30% happens in the redemption area, with the rest being at the Point of Sale (POS) area. The unfortunate part of this is that few realize if you are operating with the Embed system, you can control this with a little bit of training. We see it every day, people spend a lot of money on this robust system yet use a very small percentage of it. There are numerous features in the system that many have never seen before. Although adding a POS to your business can have many benefits, the key to the system is cash control. I would suggest a call to Embed’s training department, to ensure that you are using the system to its fullest capacity. No matter what POS system you are using, we see this with every one of them. People get busy and use them for a cash register instead of a management system. Sure, some of them do more than others, but if you have invested in these systems, you should get the information out of them to run your business as efficiently as possible. Otherwise, just go to Staples and buy a $99 cash register and save yourself a lot of money.
Lastly, I have heard through the years from a lot of people, that you can turn a good person into a bad person by not having enough checks and balances in place. Here are a few statistical takeaways which prove this: 25% of all employees will never commit fraud, 25% of all employees will always commit fraud, 50% of all employees might commit fraud, if tempted to. Let Funstruction Results help you develop a culture that swings the “Mights” to “Nevers” and eliminates the “Always”.
About FUNstruction Results
FUNstruction Results is a consulting firm that teaches FECs how to Maximize Profits through Operational Excellence. Their comprehensive, personal service includes: operational training, systems training, business assessments, project management, product sourcing, evaluations, feasibility studies, leadership/management training, technology assessment and implementation, employee training and retention, owner/CEO coaching and development, vision exploration, error and theft prevention, food and beverage strategy and more. Visit www.funstructionresults.com to learn more.
About Bernie Robinson
FUNstruction Results was started by Bernie Robinson to help fill, what he observed as, a great need in the Entertainment Industry. The education and guidance he offers businesses is invaluable to start-ups but can also help existing facilities reach their full potential.
Bernie Robinson previously served as VP of Day Associates in Asheville, NC. In this role he managed and coordinated the daily operations of six different divisions at Day Associates, including 4 Family Entertainment Centers, real estate, construction, engineering services and a 73 room hotel.
Bernie’s varied background in management provided the perfect foundation for his role in the development and profitable growth of a Family Entertainment Center Company, producing four facilities in four years. These facilities ranged from 20,000 to 72,000 sq. ft. and cover a 3 state region.
For a little over 5 years Bernie served as Business Development Manager for Brady Distributing in Charlotte, NC. He has worked with a vast number of FEC’s around the country. While at Brady, he focused on helping his clients develop successful businesses by implementing profitable arcade programs and small footprint attractions, while teaching best practices in overall operations of the facility.
Bernie can be reached at 828-691-4386 or Bernie@funstructionresults.com