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. ww
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.
