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..  she’s a funny little thing.

In July she paid 2 invoices by way of wire – Australian dollars converted to Canadian. So the payments have gone through, which should make the Aussie vendors happy clams. But I am not a happy mushroom about this, and have shared my thoughts with my assistant.

The whole premise of maintaining accounting records is to ensure that a company/individual has the proper paper trail to prove that they had in fact processed the invoice (through Accounts Payable) and said invoice was paid through a particular bank, with a particular cheque number at a particular date.

My assistant paid the vendors without processing the invoices through the accounting system – this means that I currently have a reduction in the bank balance, but no corresponding transaction in the accounting system to match it. She did this as my predecessor put this process in place to reduce the chances of doing multiple F/X conversions. Problem is that a particular project docket number had not been setup in time for July monthend, so now I have a reconciling issue.

I expressed my disappointment to my assistant as this shows a particular weakness in the controls surrounding Accounts Payable. Though the dollar amounts are small, it is of concern, in particular if we go through an Internal Audit or Sarbannes-Oxley Audit for the 2008 Fiscal Year. She is now trying to get this issue resolved by getting the invoice entered – which means she needs to request a docket to be opened.

She  still amuses me 🙂

I had to explain to her last week why a Balance Sheet is called a Balance Sheet.