Uncover operational and financial risks within your hospitality organization

In the hospitality industry, staying ahead of the competition and maintaining client satisfaction and a positive reputation, all while managing costs is always a challenge.

Current market conditions are making this even more difficult as companies are juggling the rising cost of doing business, staying abreast of regulatory changes, protecting against cyber threats, and maintaining operational efficiency.

A targeted assessment can help hospitality businesses identify and fix potential problems in their operations and finances, making them more efficient and less vulnerable to risks like fraud or errors.

Taking a proactive approach to assessing, addressing, and managing potential risks can position organizations for long-term success and resilience.

What is a SCORE! Assessment?

Using tools we developed, we assess the operational processes you request and provide a practical comprehensive written report within one to two weeks. This Systems Control and Operations Risk Evaluation (SCORE!) is an objective, comprehensive assessment of your organization’s operations in predetermined areas and includes recommendations for changes and improvement.

By diving deep into your business processes, financial controls, and compliance practices, risk evaluations not only identify hidden risks but also empower you with actionable information to improve your business.

This type of risk evaluation is designed to measure and enhance systems and processes within an organization.

For hospitality companies, it provides a fresh perspective on critical areas such as:

• Business Processes. Analyzing operational workflows and identifying inefficiencies.
• Revenue. Assessing the recognition of revenue.
• Cash Flow. Reviewing the flow of cash payments to vendors.
• Policies, Procedures, and Documentation. Evaluating existing policy documentation and procedural adherence.
• Business Licenses. Reviewing licenses for compliance with local regulations.
• State and Local Tax. Evaluating tax compliance and structuring opportunities for companies based on location or with holdings in multiple states.

By conducting a risk evaluation, hospitality businesses can uncover potential gaps in their checks and balances, revealing areas of preventable risk. Common issues for hospitality organizations include:

• Lack of Internal Checks and Balances. In many smaller hospitality companies, a single individual may have comprehensive control over financial activities, which can pose significant risks as a result of human error or fraudulent activities.
• Contracts Management. Controls are needed to ensure completeness of contracts entered into as well as contract lifecycle management.
• Vendor Invoice Approval. Ineffective processes for approving invoices can lead to errors or fraud.
• Revenue Collection. Weaknesses in revenue recognition can result in lost income or unnoticed discrepancies.
• Cash Reconciliation. Inadequate cash reconciliation practices can increase exposure to fraud that can result in both financial losses and fraudulent financial reporting.
• IT Security. Lack of controls around IT security and awareness, and threat prevention and mitigation, can lead to problems.

Why would a hospitality company want a SCORE! Assessment?

For hospitality businesses, these evaluations offer several advantages.

Cost-effectiveness

A SCORE! assessment can be more efficient than a financial statement audit when management’s focus is on identifying areas for improvement in business processes, financial controls, and compliance practices. Financial statement audits are focused on providing reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error. SCORE! assessments on the other hand are designed to provide actionable insights, often at a lower cost.

Timeliness

SCORE! assessments generally take less time to complete than a financial statement audit and allow the company to quickly receive the findings of the assessment and discuss next steps and best practices with the engagement team in the short-term.

Tailored assessment approach

SCORE! involves a hands-on approach. The engagement team works with leadership to identify specific areas of concern and determine the overall scope of the SCORE! assessment.

The team will visit the site, engage with key stakeholders, and gain an in-depth understanding of operations. This results in practical, relevant recommendations tailored to the specific needs of your business.

Practical insights

SCORE! assessments provide leadership actionable information they can use to improve their operations. The findings help leaders identify current weaknesses in their procedures and practices and provide suggestions on how to address them.

SCORE! Process

A typical SCORE! assessment could follow this structure:

• Establish Objectives. Define the scope and goals based on your specific needs and risks related to business processes and financial controls.
• Evaluate Processes and Controls. Review and assess existing processes and controls.
• Evaluate License and Tax Compliance. Review for compliance with business licenses and tax requirements.
• Recommend Risk Mitigation Strategies. Recommend strategies to address identified risks and enhance processes.

Actionable findings

Following a SCORE! assessment, companies receive a report on the findings. The findings are categorized as high or low risk to help your organization prioritize resolutions and corresponding recommendations that can be implemented by your company.

Reports are designed to translate challenges into easily understandable solutions that help address the problems unique to your organization.