Essay About Refund Processing And Proper Business Processes

Proper Business Processes
Proper Business ProcessesIn the article, Pay-and-Return Invoicing, the proper business processes that should have been used was a division of obligations and appropriate inner controls. Veronica should have only performed the invoicing for the association. The refund processing should have been performed by a different employee in the accounts receivable area of the accounting department who does not manage client invoicing. The AP and AR directors ought to have been running reports consistently to survey the payables and receivables every month and comparing them with earlier months. The worker in charge of finishing the bank reconciliations should have been comparing and confirming the installments received against the approaching payments log and the bank deposits. The expansion in the accounts payable account ought to have been seen before the fraud proceeded to the amount of a quarter million dollar loss to the association. The AP supervisor should have approved the payments before checks were issued. The AP supervisor should have likewise been reviewing the foreseen refunds from overpayments, confirming that the expected refunds were exact, and looking into why refunds were expected.Components of the Business Process to Correct the ProcessThe component of the business process that should be corrected is the separation of obligations in accordance with the internal controls within the association. To start with, the incoming mail ought to be handled by no less than two individuals in an open area. Every received payment should be recorded into a log before distribution to the appropriate departments. The payments should then be circulated to the proper faculty in the accounts receivable area and the vendor invoices should then be distributed to the appropriate personnel in the accounts payable segment of the accounting department. The daily bank deposits should be confirmed against a duplicate of the incoming payments log. A different person who performs the bank reconciliations should confirm the incoming mail payments logs and the everyday deposits against the bank statements. Second, Veronica should have just performed the invoicing for the association. Third, the refund processing should have been performed by a different employee in the accounts receivable segment of the accounting department who does not manage invoicing or accounts payable. These procedures would have given a separation of obligations where no single worker would have performed more than one particular function in the accounting department, thus, additionally giving a system of checks and balances. The AP manager, who supports seller installments, should have ran a report each week and another report each month to confirm the outgoing checks that were issued for the period. Had this been done, the AP manager should have caught the duplicate payments and invoice entries into the accounting system. The AR administrator ought to have also run weekly and/or month to month reports. Had this been done, the AR supervisor should have seen that refunds were not received for the overpayments to the organizations vendors. Comparison reports for every month should have also been controlled by the supervisors, which would have showed an increase in vendor costs, an increase in vendor refunds, with no significant changes in amounts for the receivables because of the expected refunds from the overpayments. This may have alarmed the organization earlier to research the increases in vendor costs before the fraud amount turned out to be excessively substantial.