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. zz
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.
