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Marston’s NSF Audit: What They Check and How to Prepare

Last updated: 24 April 2026

Most pub licensees dread the phone call about an NSF audit more than they dread a surprise EHO inspection — yet the NSF audit is far more predictable and beatable if you know what’s coming. I passed mine in March 2026 at Teal Farm Pub, and the difference between panic and confidence came down to one thing: understanding exactly what Marston’s checks and preparing the evidence beforehand. If you’re operating under a Marston’s CRP agreement, an NSF audit isn’t a threat — it’s a health check that protects both your business and theirs. This guide tells you what they actually examine, what documents matter, and the practical steps you need to take right now to ensure you’re audit-ready.

What Is an NSF Audit?

NSF stands for Notional Selling Figure, and it’s the baseline sales revenue that your rent agreement is calculated against. When you sign a Marston’s CRP tenancy, your rent is typically set as a percentage of what the company believes the pub should generate in sales — not what it actually generates. The NSF audit exists to verify that you’re trading at or above that notional figure, or to reassess it if trading patterns have genuinely changed.

This is Marston’s protecting their own financial model. If every tied pub they rent out trades significantly below the NSF, their whole business model collapses. The audit benefits you too: if you’re trading well above the NSF, you have evidence to negotiate better terms or defend yourself if Marston’s ever tries to increase your rent. If you’re trading below it, you have documentation to argue for a rent reduction based on real market conditions.

At Teal Farm Pub, I serve Washington, Tyne & Wear with regular quiz nights, sports events, and food service across 180 covers. When my audit came around in March 2026, I had three years of trading data under a Marston’s CRP agreement, and the audit confirmed my sales position was above the NSF baseline — which meant no rent adjustment and no further action required.

Why Marston’s Conducts NSF Audits

Marston’s conducts NSF audits for three reasons: to verify the rent is justified, to catch accounting problems early, and occasionally to identify operators who are struggling financially and may need support or, in worst cases, to prepare for termination.

From the pub operator’s perspective, the NSF audit serves a very different purpose. An NSF audit is your opportunity to formally document your business performance and create an audit trail that protects you against future rent challenges or unfair claims from the pubco. If Marston’s tries to argue in year 4 that your business has declined and they want to increase rent or renegotiate terms, you have a third-party audit record from year 3 showing your actual trading position.

New licensees sometimes assume the audit is punitive. It isn’t. Marston’s auditors are accountants and business analysts, not enforcement officers. They’re looking at numbers, not judging your personal performance. If your takings are solid and your records are organised, the audit is straightforward. If your records are a mess or your sales are significantly below NSF, then you’ll get a more detailed examination — but that’s not punishment, it’s investigation.

What the Auditor Actually Checks

Till Records and Sales Data

The auditor will ask for your till system records covering at least the past 12 months. The auditor verifies your reported sales by cross-referencing till reports, bank deposits, and stock consumption calculations. This is the core of the audit. They’re looking for consistency: do your till readings match your bank deposits? Are there gaps or anomalies in the data?

If you’re using an EPOS system (which most modern pubs are), you’ll need to export reports showing daily sales, payment methods, and product mix. If you’re still using a traditional till, you’ll need till rolls or a till reading log. The auditor will typically spot-check several days of trading to verify the figures.

What many operators don’t realise is that the auditor isn’t just checking total sales — they’re also assessing the consistency and realism of your trading pattern. If your sales spike dramatically on certain days or drop to unrealistic lows on others, that raises questions. Legitimate variations (match days, quiz nights, seasonal patterns) are fine, but erratic or illogical patterns suggest either a till malfunction, data entry errors, or worse.

Stock Sheets and Consumption Analysis

The auditor will examine your stock control system and request stock sheets covering the audit period. They’ll calculate your opening stock, plus purchases, minus closing stock, to derive your theoretical consumption. This consumption is then compared against your till records.

Stock variance is normal — you’ll typically see 2-5% loss due to spillage, breakage, sampling, and staff consumption (the legitimate kind). If your variance is much higher (say, 10-15%), that’s a red flag for either poor stock control or unrecorded sales or pilferage. If your variance is impossibly low or zero, that suggests your stock sheets are estimates rather than actual counts, which is also a red flag.

Get your stock counting process tight now. Count opening and closing stock on the same day of the week. Be consistent. Use the same method every time. The auditor wants to see that you take stock seriously, not that your numbers are perfect. Real businesses have variance. Fake numbers don’t.

Bank Statements and Payment Records

Your bank statements for the entire audit period will be reviewed. The auditor is checking that your till sales reconcile to your bank deposits. If your till reports show £50,000 in monthly sales but your bank only shows £40,000 in deposits, that’s a serious discrepancy that needs explaining.

Card payments, cash deposits, and any other payment methods need to be traceable. If you take cash but don’t bank it for weeks, or if you pay personal expenses directly from the pub bank account, that muddies the picture and makes the audit harder. Keep business and personal finances separate. It takes longer to audit a messy account, and longer audits cost you time and raise more questions.

VAT Returns and Tax Compliance

The auditor will cross-reference your till sales figures against your submitted VAT returns. If your till records show £100,000 in sales but your VAT return shows £80,000, Marston’s will want to know why. This is also HMRC’s concern, so discrepancies here have wider implications beyond the audit.

Make sure your VAT return periods align with your till records. If you’ve submitted a VAT return covering a different period than your till accounting, you’ll need to explain the reconciliation clearly. Keep your VAT documentation organised and complete.

Invoices, Receipts, and Supplier Records

The auditor will examine a sample of your invoices and receipts, particularly for tied products (beers, spirits, soft drinks) supplied by Marston’s, and for food and other supplies. They’re checking that the invoiced costs match your stock records and that you’re not buying from unauthorised suppliers or circumventing the tie obligations.

This is where Marston’s polices the tie agreement. If you’re meant to buy all your beer from Marston’s but the auditor finds invoices from a cash-and-carry, that’s a breach of contract. More commonly, the auditor is just verifying that your supplier invoices match your purchasing patterns and that you’re not running unusually high waste or shrinkage.

Compliance and Licensing Records

The auditor may also request your Licensing Act 2003 compliance records: proof of your Personal Licence, evidence of Challenge 25 implementation, record of any EHO inspections or enforcement action, and any complaints or incidents. This is less formal than an EHO inspection, but it’s part of the overall business health check.

I achieved a 5-star EHO rating at Teal Farm, which made the compliance section of the audit straightforward. But even if your EHO rating isn’t perfect, the audit isn’t an enforcement tool. The auditor documents what they find; Marston’s then decides if there are concerns.

Documents You Need to Have Ready

Before the Audit Call

You typically get 2-3 weeks’ notice of an NSF audit. Use that time to gather every document the auditor might request. Here’s the checklist:

• Till reports or EPOS exports for every month of the audit period (usually 12 months minimum)
• Stock sheets (opening and closing) for the same period, with dated counts
• Bank statements covering the full audit period
• VAT returns submitted for the audit period
• Supplier invoices for the past 12 months, organised by supplier or by month
• Payroll records or wage slips (if relevant to the audit)
• Licensing compliance records: copy of your Personal Licence, CCTV logs if you have CCTV, Challenge 25 records, staff training records
• Any correspondence with Marston’s during the period that relates to sales, stock, or trading conditions
• EHO inspection reports if you’ve had a visit

Organise these by category and date. The auditor will ask for specific documents during the audit, and being able to produce them quickly — rather than making them search through a heap of papers — makes a massive difference to the tone of the audit and how thoroughly they examine your records.

Red Flag Avoidance: Get Your Records Clean Now

If you know an audit is coming and you spot discrepancies or missing documents, do not try to hide them or create fake records. That’s fraud and will destroy your tenancy and your career in hospitality. Instead, create a simple note explaining the gap or discrepancy. For example: “May 2025 till reports were lost in a system migration; sales reconstructed from bank deposits and stock counts, variance 3%.” An auditor respects honesty and paper trails. They hate being deceived.

Common Red Flags That Trigger Deeper Investigation

Most audits follow a standard pattern: the auditor arrives, reviews your documentation, asks clarifying questions, and leaves. Some audits trigger a much deeper dive. Here are the patterns that make auditors suspicious:

• Missing or incomplete records. If you can’t produce till reports for a month, or your stock sheets are estimates rather than counts, the auditor will spend hours trying to reconstruct the data. This lengthens the audit, increases scrutiny, and signals poor business management.
• Unexplained variances. Sales figures that don’t reconcile to bank deposits, or stock consumption that doesn’t match till sales. Small variances (2-3%) are normal. Large ones (10%+) need explanation.
• Inconsistent or unrealistic trading patterns. If your weekly sales fluctuate wildly without any obvious reason (no match days, seasonal variations, or special events), the auditor will probe deeper.
• Evidence of tie breaches. Finding invoices from unauthorised suppliers, especially for tied products, is a serious flag. This can lead to formal action beyond the audit.
• Multiple cash payments that don’t reconcile. If you tell the auditor you paid suppliers in cash and can’t provide receipts, that raises questions about whether those payments actually happened or if money left the business undocumented.
• Dramatic changes in trading.strong> If your sales dropped 30% year-on-year with no obvious explanation (closure, refurbishment, change of tenant), the auditor will investigate whether business conditions have genuinely worsened or whether there’s an accounting issue.

What Happens On Audit Day

The auditor will typically arrive in the morning and give you an estimate of how long they’ll need. For a pub like mine — 180 covers, established trading history, organised records — the audit usually takes 3-4 hours. If your records are a mess or there are discrepancies, it can take all day or span multiple visits.

The auditor will set up in a quiet space (office, back room, or function room) and work through your documents systematically. You don’t need to sit with them the entire time, but you should be available to answer questions. Have a staff member or the pub manager present who understands the business and can explain processes quickly.

During the audit, the auditor may ask questions like:

• “Can you explain why sales dropped in February?”
• “How do you count stock? Do you close the pub to count, or count during service?”
• “What’s your staff discount policy? Does that affect your till records?”
• “Have you had any till system problems or changes during this period?”
• “Why are your supplier invoices higher in some months than others?”

Answer honestly and directly. If you don’t know the answer, say so and offer to find out. Don’t speculate or try to justify something you’re unsure about. Auditors spot evasiveness immediately, and it undermines their confidence in your other records.

Near the end of the audit, the auditor will discuss preliminary findings with you. They’ll tell you if they’ve found any issues that need further investigation, or if everything looks good. They won’t give you a formal verdict on the day — that comes in writing — but you’ll get a sense of whether the audit went well.

After the Audit: What Comes Next

The Audit Report

You’ll receive a formal audit report from Marston’s within 1-2 weeks. The report will state:

• Whether your reported sales match or exceed the NSF
• Any discrepancies found and how they were resolved
• Your stock variance percentage
• Any compliance issues identified
• Whether the NSF should be adjusted
• Any recommendations or required actions

If the audit is clean and your sales are above NSF, the report will confirm that and that’s the end of it. You’ll typically get another audit in 12 months, but you now have evidence on record that your business is performing well.

If the audit identifies issues, the report will outline them and Marston’s will contact you to discuss next steps. This might involve resubmitting corrected records, adjusting your NSF for future rent calculations, or if there are serious breaches (like unauthorised supplier use), more formal action.

Use the Audit for Your Own Planning

Beyond satisfying Marston’s, the NSF audit is a gift for your own financial management. After the audit, you’ll have a detailed third-party analysis of your sales, stock control, and cash flow. Use that data. Understanding your actual profit margins, your stock variance, and your cash position is essential information that many pub operators don’t have.

Your EPOS tells you what sold. Pub Command Centre tells you whether you made money — real-time labour %, VAT liability and cash position. The NSF audit gives you the baseline. Combined, you have the full financial picture. Use it to improve, not just to survive to the next audit.

Practical Steps to Prepare Now

If you’re expecting an NSF audit in 2026, or if you’ve just taken on a pub and want to prepare for one down the line, start here:

1. Implement daily till reconciliation. End of day, your till should balance to within pence. Any gap should be identified and explained on the same day. This creates a paper trail and catches errors early.
2. Count stock weekly, not monthly. Weekly counts catch shrinkage and pilferage faster, and they give you more data points for the auditor to review. Consistency matters more than frequency.
3. Separate business and personal finances completely. Open a business bank account if you haven’t already. Pay yourself a regular wage or draw. Don’t mix pub money with personal expenses.
4. Create a simple document filing system. Invoices by month, bank statements by quarter, till reports by week. When the auditor asks for something, you find it in 30 seconds, not 30 minutes.
5. Review your pub profit margin calculator monthly. Know your gross profit, your labour cost as a percentage of sales (the UK benchmark is 25-30%; I run Teal Farm at 15% through efficient roster planning), and your net margin. If you understand your numbers, the audit will show nothing surprising.
6. Keep a record of anything unusual. If you had a staff member take extended leave, a till system issue, a supplier shortage, or a local event that affected trading, document it contemporaneously. This context helps the auditor understand variations in your data.

Before you take on a pub or sign a new Marston’s agreement, know your numbers. Understand what the NSF actually means for your business, and build your systems to make NSF audits routine rather than terrifying.

Frequently Asked Questions

What happens if my sales are below the NSF when the auditor checks?

If your reported sales are below the NSF, Marston’s will investigate why. Common reasons include a change of operator, local market decline, or refurbishment downtime. You’ll provide evidence of the circumstances, and Marston’s may reduce your NSF going forward — which lowers your rent. You won’t be punished for trading below NSF; Marston’s will adjust the baseline to match reality. However, repeated shortfalls may trigger a conversation about your ability to trade the pub profitably.

Can I refuse an NSF audit?

No. NSF audits are a standard term of Marston’s CRP agreements. Refusing to cooperate with an audit is a breach of contract and gives Marston’s grounds for formal action, up to and including termination of your tenancy. The audit is in your favour as much as theirs — it documents your business performance and protects you against unfounded claims later. Cooperate fully.

How long after an audit will I know the results?

The auditor will give you informal feedback on the day or within a few days. The formal written audit report typically arrives within 1-2 weeks. If there are discrepancies that need further investigation, Marston’s may take longer — up to 4 weeks — to issue a final report while they investigate your explanations or request additional documents.

Do I need to hire an accountant or bookkeeper before my NSF audit?

Not necessarily, but having clean records is essential. If you’re self-managing your finances and you’re confident your records are organised and accurate, you can prepare for the audit yourself. If your records are chaotic or you’re unfamiliar with the documentation process, hiring a bookkeeper to help you prepare would be money well spent. It’s far cheaper than having the audit extended due to missing or unclear records.

What if the auditor finds I’ve breached the tie agreement (buying from unauthorised suppliers)?

Tie breaches are serious. If the auditor finds evidence that you’ve purchased tied products from unauthorised suppliers, Marston’s will contact you formally to discuss the breach. You’ll be required to explain why, and you may be required to reimburse Marston’s for margin loss on those products. Repeated breaches can lead to formal warnings or termination. Be honest with your Marston’s BDM if you’ve had supply issues and need to source alternative products — they have more flexibility than you might expect, and it’s better to ask permission than to be caught breaking the rules.

You now know what an NSF audit checks and how to prepare. The next step is understanding your own financial position clearly — before the auditor arrives.

Take the next step today.

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You might also find this useful

1. Marston’s Ordering System: How It Works and What to Know
2. Understanding Marston’s CRP: The Community Retail Partnership Model
3. What Your Marston’s BDM Actually Does
4. Marston’s CRP Review 2026: Working Licensee’s Honest Assessment