Payroll
RISK Controls
1 Payroll is intentionally understated Have either internal auditor or external
auditor conduct a periodic audit of the
payroll function to verify whether payroll
payments are being calculated correctly,
employees being paid are still working for
the company, time records are being
accumulated properly, and so forth.
2 Inappropriate parties receive Conduct a periodic audit of the payroll
payments. function to check if employees being paid
or listed on the payroll are still working
for the company. Check log-ins and log-
outs. Send the list to the supervisor with a
request to review for correct amounts and
unfamiliar names.
3 Employees receive duplicate Check the calculations of amounts
payments. supposedly being paid to employees if the
rate, working hours and working days, if
there are any absence or leave and others
that could affect the computation.
4 One person performs two or more Separation or segregation of duties. Have
works such as; only one person prepared the payroll,
- approving payroll payments to another authorize it, and another create
employees payments, thus, reducing the risk fraud.
- entering time or salary rates in the Also, have someone review and authorize
payroll system the payroll before payments are sent to
- issuing payroll checks pr makes employees.
direct deposit payments
- adding or removing employees
from the payroll system
- reconciling the payroll bank
account
5 No one reviews the removal of Issue payment report to supervisor. Send a
terminated employees from payroll list of payments to employees to each
department supervisor, with request to
review it for correct payments, amount
and unfamiliar names. They may identify
payments being made to employees who
no longer work for the company.
PURCHASES
RISKS CONTROLS
1 Inadequate (or No) eProcurement Invest in the installment of this software
Software Integration to:
Access to analytics that inform
Without a centralized eProcurement planning and supply chain
system to help support these management in support of:
procurement functions, even the Evaluating and strengthening
most seasoned purchasing managers vendor relationships
may find themselves fighting not just Obtaining better delivery times, the
the tide, but a tidal wave of trouble. highest quality products, and the
Failing to find and integrate an e- best prices.
purchasing software package that Efficient forecasting and planning
suits the particular needs of your
organization can spell disaster in the Have a User-friendly self-service
form of lost or duplicated purchase for common purchasing activity
orders, maverick spending on Greatly increased efficiency of
everything from office supplies to document and order processing
critical services, and missed
opportunities to form strategic
partnerships with vendors for greater
cost savings.
23 Poor Supply Chain Management Artificial intelligence and a cloud-based,
centralized software procurement solution
This problem goes hand in glove makes it a lot easier to set up a vendor
with inadequate needs analysis. If portal and fully automate vendor
you don’t have a centralized, evaluation and management. You can
transparent, and easy-to-use vendor track vendor performance and issues,
evaluation method, along with an identify negotiation opportunities if your
equally accessible but fully-vetted needs change, and cut costs significantly
method for requests, approvals, by outsourcing part of your purchasing to
purchases, and payments, managing trusted partners with limited access to the
your supply chain will be tough. system.
3 Inefficient Contract Management A centralized document library, with
terms automatically linked to approved
vendors and rich transactional data that
can be turned into reports for finance,
marketing, and upper management makes
negotiations much simpler. Review and
approval by your legal team means
contract information is always accurate
and up-to-date, and staff can create new
contracts from pre-approved templates for
easy review and approval.
4 insufficient funding and impractical Integrating budgeting, purchasing and
time-frames asset management in one system
Complete control of your procurement
process starts at the purchase request all
the way through purchase order,
budgeting, goods delivery, invoicing and
final disposal. It is essential to have an end
to end purchasing solution that delivers
enhanced intelligence of past, present and
pending asset acquisitions and
procurements such as:
verify purchase requests from
around the company
contract negotiations; improve
consultation with users and
suppliers
obtain appropriate approvals
before undertaking process
administer contracts that have a
longer duration
improve forecasting and planning
implement best practice policies,
guidelines and practices
maintain an ethical environment
By entering purchase order information
directly into your asset register, system
users can see at a glance what assets are
on order, their cost, what has been
received and those overdue. Every step,
from budgeting, requisition request,
requisition approval, purchase order,
goods delivery, to invoicing and
conversion of PO items into assets,
stock/inventory or services.
5 overstatement of the need and/or Improved budget control and productivity
misinterpretation Match your available expenditure to your
procurement schedules and trigger alerts
as thresholds are met, so you never over
order or go over budget again. With the
automation of administrative tasks across
the entire procurement solution, as well as
pre-defined processes, permissions and
simplified re-ordering, you can
significantly improve your operational
efficiency and budget control.
RECEIPTS
RISKS CONTROLS
1 Invoices are duplicated in order to Segregate duties between ordering and
generate a false payment payment of invoices. Check invoices back
to orders for evidence that the orders were
genuine and properly authorized.
2 Money payments are illegally Be sure that changes and additions to
transferred or diverted by making payee details and any other standing data
duplicate payments, paying the are independently authorized. Ensure that
wrong person, or by increasing the all payments are independently authorized
value of one payment at the expense before they are made.
of another
3 Accounting records are falsified or Ensure that amendments and deletions to
amended to allow unauthorized accounting records are independently
payments authorized-evidenced by signature,
together with name and position of the
authority and independently checked and
countersigned to ensure that the
amendment has been carried out correctly.
4 Cash Theft Ensure that cash is held securely at all
times. Keep cash balances to a minimum;
record and check them periodically
5 Accounting errors Ensure to have a daily reconciliation to
compare the daily profit from the cash
receipts log with the daily bank deposits
and cash held in the lockbox or safe.
SALES
RISK CONTROL
1 Intense Competition Determines its competitors and
periodically monitors its service's prices in
Hotel business is known for intense the market; Use the concept of loyalty
competition due to the numbers of cards which helps in consumer analysis as
hotels in Tacloban (Summit hotel, well as predicting the products that satisfy
avenue, hotel, go hotel, The Loft). consumer expectation.
An increase in competition may
hinder revenue growth. Competition
through service price reduction is a
major factor in consumer purchasing
decisions.
2 Inadequate Sales Strategy Be sure to consistently check in on your
strategic plan and confirm that you’re
Not understanding your market and moving in the right direction and still on
your customers can result in an target.
ineffective sales strategy
3 Brand and Reputation Ulding’s Hotel Code of Conduct is based
on social and environmental sustainability
The hotel market is constantly as well as ethical business conduct in all
evolving in terms of preferences and areas of its operations. Customer
customer behavior. For this reason, it satisfaction, employees behavior and good
is extremely important for a hotel accommodations of the customers are the
operator to ensure that its brand and important thing in maintaining the good
content as well as its perceived reputation of the business
position remain relevant and
appreciated at all times.
4 Data privacy/ Data Breach The few practices to avoid data breach are;
-Educating employees on best security
Hotel industries is more focused on practices and ways to avoid social
preventing data and identify theft engineered attacks -Patching and updating
such as gaining an access to the software as soon as options are available
names, phone numbers, emails, -ENCRYPTION for sensitive data
passport numbers, travel details and
payment information of customers.
Significant revenue loss as a result of
a security breach is common. Studies
show that businesses facing a data
breach end up losing revenue
5 Poor Relationship with vendors Communication is key to maintaining
good vendor relationships Remember that
One of the largest bundles of cost to it takes two sides of a coin to do business.
the hotel owner comes from external Taketime to listen to their concerns and
service providers and product accept certain sacrifices to offer minimal
vendors. This can include the risks on your end. This will not only be
companies that provide towels and mutually beneficial, but it will present you
toiletries, external cleaning crews, as willing to compromise and build your
and even your website developer. partnership. Get relevant feedback from
vendors and consider how certain issues
can be tackled. This way, you can even
prevent potential problems before they
even arise. Maintaining good vendor
relationships means listening and
adjusting to any and all situations.
DISBURSEMENT
RISKS CONTROLS
1 incorrect amounts approval of cash disbursement transaction
prior to preparation of a check & Dual
signature requirement for disbursement of
large sums of cash
2 Fictitious payments separation of the ordering, shipping and
receiving, inventory control, accounts
payable, cash disbursements, info systems,
and general accounting functions
3 Invalid payments Updating of the cash disbursements
journal and accounts payable records as
soon as checks have actually been
disbursed
4 omitted transactions Physical and electronic controls over
access to the cash disbursement and
accounts payable records
5 incorrect accumulation or posting verification of accounts payable subsidiary
ledger for mathematical accuracy and
proper posting to the general ledger
