November-December 2017

Running a Bar?

Many sports clubs are running a bar both to facilitate social events and as a fundraiser for themselves. Drinks have very high mark-ups and their sale can quickly lead to a rather significant income source for a club.

Bars are one of those things where cash transactions are still very common, because we are dealing with small amounts of money. These small amounts add up to significant amounts, however, and because the bar may be such a good money-spinner the temptation is there to be quite casual about handling this cash or other sales income.

Because there is potential for serious mishandling of this money (or the bar stock), audits of such clubs make sense to assure the members that things are above board. Unfortunately, we often have to qualify our audit reports exactly for this income, meaning members don’t get the assurance sought through an audit for this activity.

The headache for an auditor when examining bar sales is the big insecurity around the cash income actually having been banked. We have some analytical tools which try to match up sales income with stock movement, but they have a high margin of error for such relatively small turnovers, and pricing is not very consistent.

Some organisations have a running tally of their bar stock, i.e. every time a bottle of beer or phoenix organic elderflower & apple drink (year, right) is sold it is ticked off from the supplies. This allows a tallying up of the cash take for the day or week with how much stock disappeared, and is quite an effective internal control.

For audit purposes, any such tallying sheets or records of sales on a given day should be kept and supplied with the other audit documents.

Let us know if you want to discuss ways with us how to keep your bar income safe from disappearing