I was highly amused yesterday afternoon by my A/P Clerk, and twice in one day.
*She made 2 wire payments, each under $100 USD and was asking me if she needs to input the invoices into the A/P subledger, since we report our Financials in 1000s. I told her yes, we need to get the invoices properly processed. The invoices provide documentation to support payment and show that the company had a legal obligation to make a remittance. She couldn’t quite grasp that concept, but I told her to do it, so I think she’ll be running on autopilot in that regard.
*2 payments were voided a couple of months ago as the vendor had not cashed the cheques. And because it was a long time since the cheques were sent out we journalised the amounts as “unclaimed credits”. Now we get a statement from the vendor saying they were trying to cash a cheque from 2006 and it got rejected — no shit, it’s been 2 years, banks have strict staledating policies. My assistant wanted to just re-enter the invoices, and thereby hit the expense accounts. Since the voiding and reclassing from A/P to Unclaimed Credits did not touch the original amounts in expense I had to instruct her that the proper DR should be Unclaimed Credits, not Expense. She couldn’t understand this until I explained that we can’t hit the expense accounting twice for the same charge. In effect we have to reverse the entry we made for “Unclaimed Credits”.
This company is funny. I really enjoy working here, but the lack of GAAP knowledge is ridiculous. One of my co-workers, who works as a Senior Accountant, was asking me how to process an asset disposal in the G/L. And another couldn’t fathom the concept of commodity taxes payable.
I think I shall do reasonably well here, though I have to bite my tongue quite a bit. No one is violating SOx, GAAP or IFRS – thankfully, and that is probably due to the fact that Senior Management in Finance are designated and are very well versed in the various standards we have to adhere to.