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. xx
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.
