The bookkeeper is responsible for making sure that all recorded entries are correct. The
bookkeeper should be reliable and trustworthy and should know that all accounts should be
labeled correctly. It is unethical to create an account with an unidentified name for the intent
to commit fraudulent activities to the company. The bookkeeper should advise the coworker
of the importance of loyalty and accountability. The bookkeeper should decline to open an
account with unethical conduct. I would ask the AP to be clear concerning the name of the
account and to explain the intentions of the account. Bookeeping is the one of the most
important things in a business. In a start up company it is that much more important because
starting a business can be overwhelming and making sure that all accounts, costs, revenues,
expenses are documented to have organization. If the A/P Clerk is asking me to open a new
account " New Expenses, of course I will ask questions, we need to be specific. What is it
for? What type of expenses? Why is this account seperate than the ones already documented.
I won't assume the worst right away, because with a new company I am thinking there will
be "New Expenses", however in order to know and continue to keep organized we need to
make sure every report is documented with specifics. Of course, I will be keeping upper
management in the loop, as long as everything is documented everything should be ok. The
job of a book keeper is to make sure all accounts are accurate, up to date and entered on a
regular basis. With that being said, in order for accuracy, accounts should be specific so that
everything makes sense and will be generated correctly. If a clerk asks to have a new
account entered that is not specific, I would think the best thing to do would be to ask
exactly what the account is for and explain the reasoning on why it should be named more
specifically. If it is my duty to enter accounts correctly than I should stand behind my duty
and talk is out with the clerk and if it becomes an issue I would seek assistance from
someone higher up and bring it to their attention. I would assume the account would be for a
fraudulent purposes, I would first seek to get understanding and then communicate to help
handle the situation more correctly. There could be a number of legit reasons on opening a
new expense account. Sometimes new expenses can come into play at random times
throughout the year and it would be necessary to add in an account for this reason. If you are
a bookkeeper in a company your responsibilities are keeping track of daily transactions and
/ recording day to bank transactions you are also required to sometimes prepare the books
for the A/P. I would think that the A/P would need the new account because new revenue
would be generated and he/she wanted to start a new account. I wouldn't think anything
nefarious would be going on with me starting this new account. I would reiterate the
company policy to him/her to ensure we understood what was being asked of me to process.
I would also explain to the A/P that I keep great record for the company and I am
transparent with management so as to show that I will not be apart of anything fraudulent. I
would inform him/her that the name of the account would need to be a bit more specific just
for record keeping purposes. If they had an issue with me saying that the name would need
to change I would then consider going to management and disclosing information about the
account the a/p clerk wanted to create. If I were the bookkeeper of a start up company and
an A/P clerk asked me to make an account with the name New Expenses, I would ask for
more information. Since it is my job to ensure that everything is accurate, I would want to
know what the account is for since that is my job to keep the numbers correct. If the A/P
clerk gave me an issue with the information than I would definitely go above their head to
get that information as I would not want to risk my job if they were trying to pull a fast one.
Since most expense reports need detailed information, I would ensure that I had it before
opening a new account. The A/P clerk could have wanted it open to use for specific
materials, start up supplies, or other work related items. If they were a trust worthy person
and they provided all the correct information and don't get offended when I ask for more
information than I probably would create a new account, as long as it was a legit thing. I
would than make sure I had every receipt for that account at the end of each month/annually.
In bookkeeping one of the most important aspects of the job, if not THE most important part
of the job is keeping accurate, fully transparent records of all financial transactions your
company makes. In this scenario,I would absolutely clarify with the A/P clerk what the
intentions of the account are, so that I could correctly label it in the books. If they give
pushback on the matter, I would take the opportunity to educate them on the importance of
accurate and precise bookkeeping in order to protect the company from any kind of
wrongdoing, especially as a startup.Making sure the books all align at the end of the year is
your responsibility and if you allow accounts to be opened without knowing the comings
and goings of them, it can be a very, very dangerous game for a company who is still in
development mode.If they still will not disclose their purpose with the new expense account,
I would then speak with management about it. I would explain my position on keeping clear
and accurate books to protect the company. I would think that they would begin their own
investigation into the matter. As an accounts payable clerk, it is important to maintain an
organized and clear expense report. By opening a New Expenses account, the AP clerk is
opening up a vague and potentially misleading records. Since this account wouldn't have a
clear title, it could be hard to keep track of what is being charged to and spent from this
account. By properly naming each account, bookkeepers can clearly see where expenses are
going, and can have an accurate answer as to why an account was charged a certain amount.
It is important to identify expenses and keep records of the bills linked to those expenses.
The first action I would take as the bookkeeper is to ask the accounts payable clerk to be
more clear with the account name, because the name of "New Expenses" is inappropriate for
this business, especially a startup. If the accounts payable clerk continues to be vague about
the reason for opening the account or chooses not to provide proper documentation--such as
a bill or a check--I would reach out to the accounting manager and explain that I do not feel
comfortable opening a generalized account such as the one the A/P clerk is requesting. If i'm
the bookkeeper of a new start-up company who has the responsibility for keeping the chart
of accounts up to date and I was approached by the AP clerk asking me to open an account
and name it New Expenses, then there would be all types of red flags going on. I would
immediately question the AP clerk and ask what are the intentions and also let the AP clerk
know that a situation like this is absolutely suspect from the bookkeeping perspective. I
would then politely decline and refer to said reason of the declining of the request.
Personally I think that the AP clerk is trying to use the New Expense account for personal
gain, or some type of cover up of past mistakes.Secondly, I would immediately notify the
CEO or immediate CFO, whichever is in the company chain of command. I would consider
performing an audit on the AP clerk's department to try to verify if there are some type of
misappropriation of company funds. Hopefully by doing this, all things will work
themselves out. I believe the A/P clerk needs the new expenses account because she could
potentially be trying to log that she is now working with a new vendor, or starting business
with a different company. It appears that she doesn't know how to properly label the
accounts payable, because the accounts payable should always be very specific so that it is
clear where the money was earned or spent. I would tell the clerk that depending on what the
expense was for, she should label it as that specifically. for example, if it was a supplies
cost, she should write "supplies cost" rather than just expense account. I would be very kind
when explaining this to the A?P, because it was likely just a simple mistake, but it is crucial
for bookkeepers to know exactly where the company money is coming and going. If this
happened another time, I would tell my manager to avoid running into problems with my
own job as bookkeeper due to the A/P's unspecific logging. Detail and organization are two
key goals towards the financial success within any company, especially a new one. Creating
a new expense account (correctly) is essential, as is a unique record to keep track financially
speaking, such as the company's assets, equity, revenue, and expenses. Name and description
assist in identify accounting distribution to record transactions accurately.
In my opinion, the A/P might be requesting to set up a new account as "new expenses" for
different reasons such as unexperienced A/P given that it is a new start-up business, unable
to identify or have a similar business account, or the inappropriate charging expenses to the
GL for personal gain (however, they are often audited). Lack of knowledge can affect the
business hence proper training is needed. As the bookkeeper, my responsibility is to
maintain the accuracy of the GLs; therefore, I would request additional information before
creating the account, and I would explain the reason for my request - based on the responses
provided, I would then create the new account with accurate information, create a sub-
account, or inform the team of the request for further approvals. The accounts payable clerk
may need a new expense account because the company began using a new vendor. I would
ask what expenses the A/P clerk intends to post to the new account. Creating an account for
each transaction can make the accounting for the business confusing.
The response from the A/P clerk would determine which action I would take. For example,
if it is a new shipping vendor and the business already has a "shipping" expense account, I
would request that the A/P clerk post the expenses for the new shipping vendor to the
existing "shipping" expense account. However, if the A/P clerk was asking to create a new
expense account for a new shipping vendor because the business wanted to track how often
we use the specific vendor or how much the business spends using the specific vendor, I
would create a sub-account under the "shipping" expense account.
If I were to open the new expense account, I would be more specific in the name of the
account so that anyone in the accounting department is clear on what expenses should be
posted to the new account. Additionally, if a new account is opened, I would send the
information to the whole accounting department. It is uncertain with the given information
as to why the A/P needs the New Expense Account. if they were vague about their request
for me to create the account, I would ask clarifying questions to resolve any misconceptions.
I would also explain that the account must be specific and defined so that accounting can be
performed accurately and align with the standards. Providing the A/P clerk with the
requirements would educate them on the process if they were unknowing, and if they had
any inappropriate intentions, they would know that the requested information was a
requirement for me to create the account. If it then appeared that they were trying to be
unethical, I would report it my manager and also to our company's compliance & ethics
department. Accurately accounting for the business's finances should be the main objective,
and ensuring that it is managed ethically. I think the A/P clerk doesn't have a deep
understanding that expense accounts should be properly defined. I tend also to think that the
A/P might have asked me to open an expense account for other reasons of trying to hide the
costs of some transactions. The clerk may have a motive to overvalue some costs and prices.
I think as a bookkeeper, I should request the source document where the expense has been
invoiced for better understanding. It would also be good if I would advise the A/P clerk that
naming and defining expense accounts is quite important when it comes to accounting.
Expense accounts are quite sensitive to the finances of a company. Failure to monitor the
expense accounts closely might lead to mismanagement of funds. Additionally, it is
important that the A/P clerks receive approval of an additional account from the senior
departments before introducing it to the bookkeeper. Lastly, it is important to note all the
amount of money that gets out of the company or else used for the payments. An Accounts
Payable (A/P) clerk ultimate job is to maintain daily financial records and transactions for an
organization. In this case the A/P is responsible for the financial records and transaction for
a new upcoming company. When starting a new company maintain money is top priority.
Keeping a close eye on what money is being spent and what money is coming in on the
daily. Managing company expenses helps minimize a company debt due to it decreases
equity.
A/P Clerk needs a new Expense account created to properly identify a new expense to the
company. Properly identifying the expense will ensure when recording and expense amount,
the amount gets recorded to the correct account.
For Tax purposes, A/P will determine if the account is accountable. Actions to consider is
proof of needing the account and the reason for it such as an invoice or bill. Not managing
the account correctly can cause risk to the company cost of expenses. Additional support to
the process will be to implement a policy for the account to prevent fraudulent activity.
I think the A/P clerk needs the New Expense account for new expenses that arise
throughout. I do believe that the name New Expense is such a broad name and should be
more detailed. New Expense account means that every new expense will fall into that
category but I think it whould
have a more clearer description. For example if I named a account Car expenses. That means
that anything I spend on my car will go into that account but what if i really meant it is for
maintenance and gas. I still feel like New expenses opens the door for so much. I think
anyone that handles the account should should know this information so you know exactly
what type of account it is and specifically what it is used for. You don’t want someone
making a mistake and not having a clear understanding and crediting/debiting the account
when it doesn’t go with New Expenses. I have a account named sometnin that is used for
specifically one reason but someone that doesn’t know may not know what the account is
for. I would explain to to the clerk that the account title is not appropriate and that they need
to be specific with the name. If they do not understand then I would ask them to show me
the source document for the expense such as an invoice, receipt, or even a check so that I
can decide on the proper name of the account. To be able to open the account with the
proper heading because the name suggested for opening the account is not appropriate and
they did not have enough knowledge about the accounting process. There is no need to
become suspicious just because they may not understand enough about accounting. If they
still insist on the account name does not cooperate, then I would go to their superior to
discuss the issue. You cannot assume that A/P clerk understands how the accounting process
works.
As it is the duty of the bookkeeper, to keep the chart of all the accounts up to date and verify
that all the expenses, revenues which have been occurred over the period that they have been
entered regularly. I would think the A/P clerk might need some midyear expense account. I
think the company needs to know when a new expense account is opened for what it will be
used for and who will have access to it. Also, I would not be too afraid to ask the A/P Clerk
for a better detail to name the expenses. They could be more equipment for supplies for our
department or a different department within the company. I also think that the COO and
CEO need to approve any new accounts created for the company and would make sure to
bring it to their attention. As being the bookkeeper, I would be responsible for any extra cost
and expenses that are showing coming and a going to for the company. I will also have to be
the one to answer questions if we have an internal or external audit that year. I might think
the A/P Clerk might be trying to hide expenses, or he was asked to create the account for
another reason. Still, I will have to ask more questions and get full details of what will be
expensed on this new account. That way it all will keep the record straight and keep the
company in compliances for an audit. The A/P clerk may want the New Expenses account
for a number of reasons: the A/P might not know that expenses accounts should be specific
and well defined and so just assumed that New Expenses would serve them well. The
naming of accounts is done and asking them for the Source document so I can see what
name to give the new account. Also, If the A/P is being uncooperative, it is time to be
suspicious and to clarify the issue with the superior of the clerk so as to avoid any issues
with the company's books. If he/she still insists on the account name and does not want to
cooperate, then you should go to his superior to discuss the issue. You can't expect an A/P
clerk to understand as much accounting as you do.
