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The Back-Office Overview provided by RDS identified several items requiring immediate attention. Paul Fields’ insights led to the successful overhaul of our Company's support systems, which now meet the highest standards!!!."

Rob Wilder
Chairman, Proximo Restaurants, LLC
Jaleo, Café Atlantico, Zaytinya and Oyamel and Austin Grills, Inc.

Financial Services

Back-Office Overview

RDS had developed a restaurant-specific tool to assist operators with evaluating the condition of their back-office. The RDS Back-Office Overview analyzes more than 50 individual back-office functions, with an emphasis on accounting, operating procedures that relate to the back-office functions, control procedures, legal issues, human resources issues as well as a performance overview. Formatted in an easy-to-read design, the Back-Office Overview covers each topic with three components: overview, comments and recommendations. An example follows.

Tip Reporting: Is there a system in place? What are the percentages? What training is given to the servers and bussers? Is there a TRAC agreement in place? Are 8027 forms being filed annually?

Overview: The servers report their tips at the conclusion of each shift. This is done through the POS system where employees are prompted to declare their cash tips (credit card tips flow into the system automatically). The declaration is voluntary and not checked by the manager. A review of the 8027 forms, as well as conversation with the controller, indicates that the cash tips are being reported at 4.5% of the corresponding sale amount. There is not a TRAC agreement in place.

Comments: All of the senior management are aware that there is a major problem with significant liability for the Company.

Recommendations: Going forward, strict compliance with tip reporting procedures should be required. Within the scope of compliance, the following items should be practiced. The primary issue method should be regular training. A train-the-trainer program should be instituted to give the managers the tools to train their staff. There should include regular prompting from managers at staff meetings. It should be stated that full reporting is required and that the staff should understand that they have personal liability, as does the Company. In addition, the Company should hang tip reporting posters in all stores that can be viewed by the employees daily. Finally, the Company should review the server reporting on a regular basis to determine the level of compliance. The server check-out receipt should have a notice prompting the employee to report all tips. Any problems should be communicated to the Director of Operations who should, in turn, encourage the mangers to review training. Full reporting of tips should be a strict rule and noncompliance should be grounds for termination. The Company can register with the IRS for the TRAC program.