How To Pass a Liquor Store Audit Without Breaking a Sweat

It’s a busy Friday afternoon. Customers are swarming the aisles, asking if you have more José Cuervo in the back, and waiting in the checkout line to get their weekend started. 

Enter: an Alcoholic Beverage Commission (ABC) official, here to conduct a thorough audit of your liquor store’s inventory, licensure, and sales records.

Does this sound like your biggest fear? If so, we’re here to help you overcome it. 

This blog covers everything you need to know about liquor store audits, including why they happen, what inspectors are looking for, and the most common violations they find. Plus, we’ll share some simple steps to help you stay prepared for a liquor store audit at any time. 

Liquor Store Audit Basics

Knowledge is power, especially when it comes to liquor law. 

When an auditor shows up at your store, you need to understand where they’re from, why they’ve come, and what they’re looking for. Let’s start by answering these crucial questions. 

Who Conducts Liquor Store Audits? 

There are two types of liquor store audits you need to be prepared for: federal audits from the Alcohol and Tobacco Tax and Trade Bureau (TTB) and state audits from your local ABC commission or other alcohol-regulating agency. 

Federal and state auditors generally have different roles: 

• Federal auditors are looking at the commercial side of your business. They’re most interested in how you source your products, how much you sell to individual customers, and whether or not you’ve paid the proper taxes. 

• State auditors are generally concerned about your liquor store’s impact on the community. They want to ensure you’re only selling to customers who are not intoxicated and are of legal drinking age. 

Understanding and following federal, state, and local alcohol laws ensures you’re ready for audits from any of these regulatory bodies. 

What Are Liquor Store Auditors Looking For?

Whether it’s a TTB official or an ABC commissioner, auditors have a typical list of things they’re looking for in a liquor store. Here are some examples: 

• Liquor wholesale records like purchase orders (POs) and vendor documents prove that you purchased inventory from a reputable, licensed wholesaler. 
• Sales receipts show how much alcohol you sold to individual customers. These prove that you didn’t break the “20-gallon rule,” which would require you to register as a wholesaler instead of a retailer. 
• Sales tax records prove that you collect the appropriate taxes on every single transaction. 
• Proper signage indicates to customers that your liquor store is committed to age verification. Some states require specific verbiage on signs, like “We I.D.” or “No Customers Under 21.” 
• Age verification processes should be rock-solid to prevent underage alcohol sales. Liquor store auditors or local police might “test” your staff to see if they’ll make a sale without seeing valid ID. 

Looking at your store from an auditor’s perspective can help you spot compliance mistakes before you face fines and consequences. 

How Often Do Liquor Store Audits Happen?

Compliance audits might seem random, but they’re usually triggered by a red flag waving over your liquor store. Let’s look at some common triggers for state or federal audits:

• Financial anomalies: If something seems amiss with your liquor store’s income or tax records, you may receive a visit from a federal TTB auditor. 

• Community complaints: If neighbors have complained to the state or local government about your liquor store selling to intoxicated patrons or minors, an ABC official might stop by to check things out. 

• Planned sweeps: Sometimes, state ABC boards decide to do a state or county-wide sweep of all liquor license holders, checking for general compliance. 

In other words, there’s no way for you to know when an auditor is headed your way — you just have to stay ready. 

3 Liquor Store Audit Mistakes & How To Avoid Them

Want to pass any federal or state audit with flying colors? Preparation is key. 

Let’s look at three of the most common mistakes liquor store owners make before or during audits — and what you should do instead. 

1. Missing or Disorganized Paperwork

When an auditor walks into your liquor store’s back office, they expect you to present the requested paperwork within minutes.

But sometimes, owners let these records fall into a black hole. Inventory purchase orders, sales receipts, and critical tax documents live in unnamed spreadsheets, stuffed shoeboxes, and cluttered filing cabinets. 

If you can’t find what the inspector is looking for, they might assume that you’re sourcing inventory and selling liquor illegally — which could turn a quick check into a full investigation. 

The Solution: Switch From Paper to Digital Records

Prevent the panic by eliminating disorganized paper and spreadsheet records. Instead, rely on your point of sale (POS) software to keep your data safe and organized. 

Your POS system constantly collects information about your business, including what you’ve sold, how much you’ve collected in sales tax, and even your vendor information and purchase orders. 

When an auditor requests data within a specific time frame, you can pull it up within seconds — no more shuffling through papers and looking suspicious. 

2. Lax Age Verification

Failure to check ID for every single person who approaches your checkout counter can have serious consequences for your liquor store, ranging from hefty fines to the loss of your liquor license. 

When state or federal auditors visit your store, they expect to see solid age verification processes in action. If your team members seem too casual about it, you can expect more frequent inspections and alcohol sting operations. 

The Solution: Upgrade Your Tech

Eliminate the risk of underage alcohol sales by investing in the right technology. There are two essential tools every liquor store should have at the checkout counter: 

• ID scanner: This tool doubles as a barcode scanner and age verification device. Instead of manually entering customers' birthdates or bypassing the age verification prompt, cashiers have to scan each ID to ensure that it’s legitimate. 
• Integrated security cameras: Security cameras that integrate with your POS system are a lifesaver during liquor store compliance audits. If inspectors are concerned about a specific transaction, you can bring the timestamp, receipt, and camera footage together to reveal what actually happened. 

Related Read: 4 Best Age Verification Software Tools for Liquor Stores 

3. Expired Licenses and Certifications

If an auditor spots your outdated liquor license or Responsible Beverage Service (RBS) certifications, they don’t care if they expired last week or last month — you’ll face the consequences regardless. 

If your liquor license is out of date, you’ll have to restart the long (and expensive) application process. If your employees’ RBS certifications have lapsed, you may have to send them home until they’re able to work legally again. 

The Solution: Make Renewal a Priority

Fortunately, keeping your licenses and certifications up to date is easy — all you have to do is stay organized. 

Set up calendar reminders to let you know when a renewal date is approaching. Make sure to set them early enough so that you can go through the renewal and retraining process without rushing. 

Pro tip: Keep a physical folder with copies of these documents to present to auditors right when they walk in. Plus, having all your paperwork in one place makes it easier to monitor expiration dates. 

Bonus Tips for Handling a Liquor Store Audit Like a Pro

Want a few more tips for smooth liquor store audits? Here are three simple strategies that can make a big difference during an inspection: 

• Thoroughly train your staff: Ensure your team members are ready to welcome auditors and provide them with the right information — even if you aren’t physically in the store. 

• Plan mock audits: Create a checklist of these common audit mistakes, and use it to facilitate monthly spot checks. For example, you might check that your liquor license is displayed properly, employee RBS certifications are up to date, and age verification processes are being followed perfectly. 

• Upgrade to a liquor-specific POS system: Stay organized and ready by investing in a POS system specifically designed to help liquor stores stay compliant with the law. Bottle POS, for example, makes it easy to access purchase orders, sales records, and even age verification footage from any time frame. 

Having your business audited doesn’t have to be stressful — especially if you’re using the right tools and following the right processes. 

Bottle POS, our top pick for liquor stores, includes all the tools you need to stay compliant and handle audits like a pro. Plus, it can help you manage inventory, market your store, and provide customers with a top-shelf shopping experience. 

Talk with one of our liquor industry experts to see how Bottle POS can help your store.