Is there a Gap in your GAAP?
GAAP (Generally Accepted Accounting Practice) standards are often overlooked. Things that you should look for are:
1. Running edit lists to review transactional data before posting it in batch. – This allows you to catch any errors or omissions prior to posting.
2. Documents that you create should always have unique numbers. This would be true regardless of what area of the software that the document being created in.
Examples: POS Orders and Invoices, A/P Vouchers and Checks (paper and EFT), Payroll Checks, General Journal numbers, etc.
3. Auditing as you go – Whenever you are doing transaction input, after auditing your work, you should have another staff member review it before you post it.
4. Grouping transactions by date or period– As you are making any adjustments, make sure that all adjustments that are posted together are on the same date and/or within the same accounting period – Meaning don’t post entries dated in January with activity for February or March.
Typically, in most software applications, a document number is considered a Primary Key, so it should be considered “Unique” and would not be duplicated. However, there are some programs where it might be a Secondary key where multiples might be allowed, such as using a sequence Number, such as when using duplicate entries and historical tables such as Check History (e.g. checks, voids for the same checks, or manual payments, EFT transactions, etc.).
Just because a program might allow you to insert duplicate data, that isn’t necessarily a good thing to do
Even in situations where the programming might allow for this sort of thing, a duplicate document number might cause other issues with software functionality. -As examples.
• Unique document numbers make auditing easier. If an auditor sees a lot of duplicate documents, it may prompt the auditor to dig deeper looking for other accounting irregularities, thereby artificially extending the length of the audit. An example of this sort of this would be a local, state or federal tax audit.
• A Ticket/Invoice number exists in history multiple times – So A user runs a report on ticket #54653 without having specified a date or date range. The subsequent report returns a dozen documents created over a period of 10 years.
• Problems posting – I have seen examples where end-users have used the same invoice number dozens of times. When they try to post a new voucher using the same invoice number, the program may hang or crash while it attempting multiple times to create a “New” document for one that already existed previously. As an example, the program might be writing data for the same document into history a dozen times, and they just stop the attempts to write the new data.
The worst example of this that I have seen so far, is with one vendor that 21 manual payments on file using an invoice and check number of “SUPPLIES”
In this case, a better example of document number creation would have been to enter numbers in a format like the following: “SUPMMDDYY” (e.g. SUP042519… or Supplies for 04/25/2019), or “VendNoPrefixMM252019) (e.g. BOS042519, Bobs Office Supplies for 04/25/2019).
Check number and Invoice numbers should always be auto-assigned.
If you have any questions or need assistance with the creating your own document number assignment schema, please contact the CCS Retail Systems Support department.