Many companies get billed that are paid on a 30-60-90 agreement. In my previous
employment, Sears Outlet (now American Freight), after the separation from sears (their
bankruptcy issues), new POS systems, and many other changes, many companies will not
allow us to set a 30-60-90 agreement, and we found different ways to make deals that
accommodate their needs to ensure a business deal. I learned while working there that not
everything is black and white in big corporations, and we need to ensure the customer is
taking care of to ensure a successful client relationship as they are the ones that keep a
company afloat. Of course, we need to ensure we follow the company's rules and maintain
an ethical transaction; however, I often saw ways to "manipulate" the books to ensure
everything was entered correctly while still helping the client. It is essential to communicate
with our leadership team when we receive requests considered out of the norm; get
necessary approvals, and ensure that everything is notated accordingly. As an employee, I
would never fulfill any request that is not considered common without proper approvals and
written communication on how to enter the request in the system correctly. It is important to
remember that everything needs to be documented and communicated through email to
avoid confusion or he-said-she-said issues. I would probably have verbal communication
with my superior, whether declined or approved; I would follow with an email with a "per
our conversation.." to ensure I am protected from any issues that can arise. I would not
participate in erroneous activities on my job or anywhere else. I would have to let that
coworker know that under not circumstances would I be a part of unethical decisions or
actions at my place of employment. Wrong behavior is not okay regardless of the
relationship of the person who is requesting a favor for. It is a possibility that the coworker
is just trying to help a very important client but regardless of their intentions it is never good
practice to be involved in unethical practices. I would advise the coworker to have a
conversation with their manager and see if there were someway to provide support to the
client to accommodate the project. I would also let the coworker know that their request
could put the company's fiscal year totals in jeopardy and that isn't the right way to go about
doing things. That coworker is only thinking of satisfying the customer and to make
themselves look good but in reality it is jeopardizing the company's fiscal year totals and is
not fair to the company we are working for. I would not write the $2,000 check without fact
check and getting confirmation from a reliable source such as a higher up. I would have to
wait to get confirmation that the invoice I was given in genuine first before I wrote the
check. Then when I received confirmation then I would write the check one that day. The
$2,000 check needs to written by the end of day because it is the last day of the fiscal year.
I could not write the check for tomorrow because it would cause a disruption in the accounts
and the miscellaneous expense would not be set as zero it would be offset by the $2,000. If
the invoice ended up being erroneous and I had written the check it would mean the
company was out $2,000 and I could end up without a job because I did not fact check first
when I saw the invoice is different then the others. The “VIP” customer whose project could
not be billed since it was not a genuine invoice. customers are the most important part of a
company. This is a bit of a tricky situation, since its on the last day and the apparently it's
one of our important customers. Bottom line is stick to rules and policies of the company, if
the invoice is incorrect, then correct it and we can have it submitted. If there is anything
missing then we need to get the right info in to get it done. To answer the question I would
not write the check unless everything checks off.
If in some instance I get direction to write the check from higher up then at that point I
would but definitely get the documentation to back up why I was doing this exception. A lot
of companies have specific rules that lead to preserving cash. They have rules in place that
they will not pay bills for 30 or 60 days. I know where I work at Johnson and Johnson this
is the case and they will not pay the bill before that time is up. It helps them keep a higher
cash flow, so if I did write the check, I would be breaking internal rules. Nothing would be
broken as far as GAAP rules are concerned if it all checked out, but companies have internal
rules that have to be followed as well. I feel like this varies by companies, to think about this
in terms of a styling company I would think how I would handle this would be to verify in
someway what company or companies are billed, what VIP customer it is for. An example
would be a high in client who uses our services for all of their homes, and a invoice of a
lunch with the client, furniture, or decor costs. If this is something that is normally
accommodated then I would push it for the day of. since I know there are situations I have
been in where my department have created manual invoices for end of quarter or end of year
purposes. These are valid invoices and are honored by our vendors. These manual invoices
are still system generated. Despite knowing I have personally had experiences where this
happened, if I was asked to cut a check for $2000 for a miscellaneous expense for supplies I
would still always ask questions and ultimately I would bring in a manager for advice or
approval. I would not feel comfortable just cutting the check without having approval. The
reason for this request is because the company wants the expense to hit the current year. If
the check is written the next day then it would go into the following year and not zero out
the following year. If the check is written and the invoice ends up being erroneous then the
check was paid to a non existing expense and the company would have overpaid $2000. This
would affect the company’s books and not have all expenses accounted for correctly. In this
situation, there is not a chance in hell that I would write that check for that co-worker. You
are asking me to cut you a check for $2,000 as a miscellaneous expense for supplies in order
to complete a project for a VIP customer today right at the closing of the entries. I will say
that this sounds like a “hookup” and usually a hookup is illegal and someone can and will be
terminated because of it and I will not be a part of that process. This is a red flag situation
that I would first start asking questions about who is the authorizing authority of this
transaction. Next, I would bring this situation to the higher ups especially if it involves a
“VIP” and go from there. The trick to this is to not be the last person with the secret.
Covering yourself in situations like this is not frowned upon and I hope that the company
would see that I have good intentions and I am thinking about the best interest for the
company. I think that it is never ok to to write a check when the invoice does not look quite
right, but I know that when your in a hurry you can make mistakes. Assuming the co worker
is in a hurry to complete a VIP project then I think it highly likely mistakes could have been
made. I would ask the co worker to to correct the paper work so that everything is in order
before making the entry. I would make the entry for the day the check was cut. We have all
been in tight situation and if the VIP project was not completed on time then I feel the
company could have more to lose. If the co worker was trustworthy, they made attempts to
correct the invoice, and after asking around to verify that the VIP project was real then I
would make the effort to help by cutting the check. I would make the entry the next day.The
company would be out $2000 and I would assume some form of reprimand would be handed
down to the co worker who requested the money and myself. At the same time I feel like
there would be policy in place to catch something like this and if there isn't then this would
be a learning opportunity. I feel most of these questions have been posed to assume the
worst in people, with that said, I have travelled and have seen some of the worst in people
but there is good as well. I am a firm believer it is always best to get things in writing. If a
co-worker asked me to cut a miscellaneous check for $2000 and provided me with an
unrecognizable invoice, I would not process the check. I would forward the invoice copying
the co-worker to my supervisor, seeking approval to process the invoice. If my supervisor
approves the invoice payment, I will cut the check to account for the expenses incurred in
the month. a
If I cut the check on the last day of the fiscal year but recorded it the following day, the year-
end balance sheet will not be accurate. Cutting the check requires an expense code which
would need a debit/credit entry to reconcile. Not recording the entry during the current
month or year of expense would only show a credit to cash which will cause the trial balance
not to end evenly. This is a hard one because it is the end of the fiscal year and they need to
complete the project for a VIP customer that day. This puts me in a tuff spot cause I'm the
type of person that wants to get things done but at the same time I don't want to do
something wrong for the company. I would start by reaching out to a higher up manager and
let them know the issues and I would probably send an email and would ask for a reply to
have a record that I had authority to write the check for the money needed. I would write the
check and record it for the next day because if the close of the fiscal year wouldn't capture
the project for VIP customer. I think recording the check for the new fiscal year would be
easier so if there was any error there wouldn't be any problem with the closing of the fiscal
year. I think having emails would cover me if anything went wrong and documenting the
check for the next day would help if anything needed to be corrected. I would not write the
$2,000 check for a co-worker with a funny or different looking invoice. What I would do
would be to show the invoice to a superior and get the okay from them before I did, making
sure that it was something that was approved. I have realized that all of the questions in this
class are more ethical than theory based. With that being said. I think with all of the other
questions as well as this one, all of my answers have been to get the action approved by a
superior. This situation could cause problems with the company loosing $2,000. It would
seem that the co-worker has made up an invoice knowing it is the last day of the fiscal year
and knowing that the accounts reset the following day, so it would be a hard transaction to
catch if one wasn't looking for it. Also, with my experience in the work force with lots and
lots of co-workers in the past I automatically assume the worst of people. I think that just
from experience if I were to be an accountant for a company, I would question everything
and always assume that co-workers are trying to take advantage. I honestly don't think that
this would be a job that I would like. I would not write the check today and record tomorrow
or write the check tomorrow. I would have to make sure that everything is legit first and
foremost. I would have concerns as to why the check has to be written today and not wait u
til tomorrow. The invoice looking different from the invoices that are normally processed is
a red flag for certain. The invoice could be altered or even fake honestly. I would be
skeptical about the check needing to be rushed instead of waiting. The company would be
affected by the check is written because the numbers would be off. I don’t know quiet
exactly
how it would affect it but I believe it will have something to do with the expenses being off
for the beginning of the year. There is definitely some red flags and you would need to pay
close attention to this matter. You would be the one in the most trouble due to you cutting
the check and also the person who created the suspicious invoice as well. In this situation I
personally would not write the check because of its impact on the balance sheet and net
income. If a check is written and used in the wrong time frame in this instance would throw
off the net income because it would reveal $2000 more. You must debit and credit the
proper accounts at the same time to avoid any possible errors. The accounts to be Debited
would be the Misc. Expense account and a credit will go to the Bank Account. The net
income will also show a n -$2000 error for the next fiscal year.
Furthermore if I'm asked to expedite monies for supplies I would have to put my supervisors
in the loop because maybe they can make some adjustments that require extensive
authorization. My advice to my co-worker would be to issue and record the check and the
proper amount on the day that it is issued. Again, this is about business and doing things the
correct way. In my opinion I am not going to potentially lose my job due to recording and
giving out checks to meet deadlines unless i'm advised to do so by my superiors.
I would have to ask questions have more details before I write a check of that amount. And
for the invoice to be different from the ones I am use to working with. I would definitely
have to ask a supervisor about it and if I was doing thing correctly. And if I was to write the
check and it came back being a error. It could show funds that was being withdrawn but it
was counted for. That could send a red flag to you for writing the check. But that is why it’s
best, if you are not sure to ask and get a second person. If you feel like something is not
right. But I wouldn’t right the check. Til the next day so it can be counted with everything
else. I personally would not write the check today and record the expense or write the check
tomorrow until I know for sure what's going on. As per accounting rule, While entering the
transactions there should be Debit and Credit simultaneously. Therefore if I cut a check
today for miscellaneous expense for supplies then it should be debited by Miscellaneous
expense account and Credited by bank account simultaneously. Otherwise current year net
income wrongly shows $2,000 higher.Affect of the company if the check cut today and
didn't record the expense, then the net income of the current fiscal year will be increased by
$2,000 and net income of the next year will be decreased by $2,000. It happens due to error.
If check cut today and expense recorded tomorrow then the current year financial statement
shows $2,000 higher net income and the amount in the balance sheet will be reduced by
$2,000.
