» Make sure this year-end practice doesn’t hurt

Make sure this year-end practice doesn’t hurt

November 20, 2008 by Carol Katarsky
Posted in: Best practices, Communication, Hiring & training staff, In this week's e-newsletter, Internal controls, Latest news & views, Tax compliance

As vendors start closing their books for year-end, you’ll need to be on the watch for this sneaky practice.

At year-end, it’s not unheard of for vendors to clear old credits from their books and statements. (Is it legal? No. Does it happen? All the time.) So, if you even think you may have an outstanding credit with any vendors, now’s the time to review your vendor statements to make sure you’ve taken advantage of every penny your company is due.

Note: Depending on your vendors, and industry practice, you may be better off requesting a new statement with “all transactions.” Otherwise, some vendors will issue statements that don’t have certain details — like credits due.

If it turns out you do have a credit but you can’t take it yet because you have no outstanding orders, hold onto that statement and compare it to your first statement in ’09 to make sure the credit is still there. If it’s not, it’s time to remind the vendor that unclaimed credits can’t be purged just because your company didn’t take them within a specified period of time.

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