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. b
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.
