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. c
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.
