The value of effective Control Frameworks in hospitality

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The value of effective Control Frameworks in hospitality

Article first published by UK Hospitality.

Retailers must track inventory. Hotels, pubs, restaurants, and leisure businesses, which make up most of the UK’s hospitality sector and account for 4% of its GDP, need this. They must track their inventory to stay profitable and satisfy customers in a fast-paced, high-demand environment.

Stock control is the biggest risk for hospitality businesses, so they need good internal controls. Internal controls should protect the business from external and internal risks like theft and resource misuse. Internal controls help maintain accurate financial records, protect assets, comply with laws and regulations, and prevent and detect fraud and other misconduct.

The purpose of effective stock control procedures

Most hospitality businesses use stocktaking or inventory control to maximise profits with minimal product investment while keeping customers and staff happy. With accurate stocktaking, hospitality businesses can:

  • Make calculations of profit and loss
  • Determine which products are in demand or those that are not selling and may need to be replaced or discontinued
  • Calculate breakages and wastage
  • Detect or prevent theft or fraud
  • Examine expiration dates
  • Observe how effectively employees use the products
  • Ensure that products are utilised properly
  • Identify any quality control or supply chain issues

Inadequate or irregular stocktaking can lead to:

  • Ordering too many or too few products
  • A busy work environment
  • A workforce under stress
  • Unhappy customers
  • Cluttered storage spaces
  • Safety and health issues
  • A lot of waste
  • Adverse effects on profits

Standard Operating Procedures (SOPs) ensure quality, safety, and consistency in hospitality operations. They demonstrate good stock control and can account for sales to supplement it

SOPs are created by management or the board to reduce risk and improve business outcomes.

  • Providing staff with guidelines on customer service, inventory management, and resource use helps the business run smoothly
  • Providing a framework for measuring performance against standards help management track progress and meet customer expectations
  • Reducing waste and boosting profit
  • Ensuring legal compliance helps businesses avoid penalties and legal action.

Internal controls can reduce resource duplication, prevent fraud, protect assets, and provide stock information. SOPs ensure that procedures are written correctly and that everyone knows their roles and responsibilities, helping businesses grow and succeed over time.

Every employee is responsible for internal controls

Internal controls ensure employees perform the right tasks to maximise workplace efficiency. Managers must implement and monitor them, but the internal control system won’t work unless everyone knows their roles. Thus, all staff must be educated on the importance of good internal control and its risks.

In summary

Businesses need good control frameworks including effective stock control. This affects customer satisfaction, efficiency, and profits.  The process can however be very time consuming and labour intensive.

Capcon helps pubs, restaurants, hotels, wine estates, theatres, casinos, and other major venues in the UK manage and improve their stock controls and gain information and valuable insights on a range of key performance indicators, including gross margin by product, purchase details and cost prices, adherence to stocking policy and more to single- and multi-site businesses.

Contact Capcon on Tel. 01372 237 050 or Email Alternatively, please visit our dedicated page to find out more:



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