Perking Palace

To: Management of Perking Palace

From: XXXXXXXXXXX

Date: October 19, 2011

Subject: Perking Palace Internal Control Analysis

I write to you today to discuss possible internal controls I believe Perking Palace needs to operate effectively and efficiently. These procedures regard the purchase and payment processes as well as the payroll processes of Perking Palace. This document is organized starting with the internal control procedures for the purchase and payment process, then the procedures for the payroll process. There are a total of four procedures in this document, two for each business process.

Purchase and Payment Process

Preformatted Data Entry Screens

The first internal control procedure needed for Perking Palace is purchasing preformatted data entry screens. Doing so will increase the effectiveness and efficiency of the business. With these screens, when the waitresses take orders from customers, inventory can be deducted automatically. This will make the reorder process for the head chef easier. If the head chef is sick or on vacation, the replacement chef can easily determine the order quantities of each item. This procedure will also help the headwaiter and Mr. Chen do their duties. Inventory and supplies can be entered in the machine, when supplies and inventory get used, the screen will give an accurate number of what needs to be ordered. These processes will no longer have to be done with estimates and averages. This control is needed to ensure accuracy of reordering suppliers and inventory. Also if for any reason, the head chef, the headwaiter, or Mr. Chen is absent, their replacement can fulfill duty effectively and efficiently. Although there will be a cost in purchasing the data entry screens, the benefits outweigh the price. Not only can the machines be used for inventory purposes, but the waitresses can also take orders on them which reduce the chances of messing up a customers orders, losing orders, or incorrectly billing the...