Reasons for Sudden Spike in Water Bills at Businesses?

Fraudulent activities within businesses can take various forms, ranging from minor to complex schemes. Even small-scale incidents can reveal weaknesses in a company’s management. In this article, we discuss the importance of tight management to prevent similar issues.

A Foreign-Invested Enterprise in Vietnam Provides On-Site Cooking Facilities for Workers

This enterprise established an on-site cooking area within the company’s premises, complete with a food storage warehouse, staff resting areas, preparation zones, cooking stations, serving areas, and the necessary equipment for operations. Additionally, the company partnered with an industrial catering service provider to handle the cooking on-site.

While meal quality is an essential issue, it will be addressed in a separate article..

A Problem Arising from Loose Management Allowed the Catering Provider to Serve Other Clients

Due to insufficient oversight, the catering service provider exploited the company’s resources to provide services to other clients.

The company allowed the provider to use its infrastructure, including free electricity and water. Taking advantage of this, the provider secured additional catering contracts with other businesses. Furthermore, they brought trays and utensils from newly acquired clients to the company premises for cleaning.

As a result of using the company’s resources, the catering provider significantly reduced their costs and rapidly expanded their services, leading to a sudden 300% spike in the company’s water bills for three consecutive months.

Internal Issues Contributing to the Incident:

1. Outsourced Security: Under instructions from involved parties, security personnel did not log the entry and exit of vehicles transporting goods to and from the kitchen area for external clients.

2. Loopholes in Contracts: The contract between the business and the catering provider did not clearly define the terms of using the company’s assets and facilities.

3. Lack of Internal Controls: Certain individuals within the company leveraged their positions to manipulate others and influence outcomes.

   
   

Solutions

While the above issues lack sufficient legal grounds to accuse the catering provider of misconduct, we supported the business by implementing the following measures:

1. Drafting More Robust Contracts:

   • Adding specific clauses governing the use of company assets and resources, ensuring they are solely for internal purposes.

2. Introducing Compensation Clauses:

   • Clearly defining the provider's responsibility to compensate for any contract violations or misuse of company assets.

3. Anti-Fraud Measures:

   • Adding provisions to prevent fraudulent activities and strengthening oversight of the catering provider's operations.

4. Food Source Inspections:

   • Establishing regular procedures to inspect the origins, quality, and safety of food provided to the company.

5. Meal Quality Evaluations:

   • Conducting periodic evaluations to ensure meals meet nutritional and hygiene standards, fulfilling workers' needs.

     
     

Don’t Let Small Issues Hinder Your Business Growth!

If you have any questions or require detailed advice, don’t hesitate to contact us.