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Are there any ill effects of overstating sales figures? For tax or other purposes.
The business I work for has been incorrectly charging their "Gift Certificates"
Essentially they have been reporting the sale of a gift certificate
And Recoding the sale of a person using a gift certificate.
Essentially doubling the sales figure of the gift certificate.
The only thing I can think of is overstating the tax by a few bucks, is there anything else?
I need to determine wether or not it is worth the effort to fix these. Sales wise the last 8 months of gift certificates only add up to about one days worth of buisness. It almost doesnt seem worth the effort. Any input is appreciated.
Essentially they have been reporting the sale of a gift certificate
And Recoding the sale of a person using a gift certificate.
Essentially doubling the sales figure of the gift certificate.
The only thing I can think of is overstating the tax by a few bucks, is there anything else?
I need to determine wether or not it is worth the effort to fix these. Sales wise the last 8 months of gift certificates only add up to about one days worth of buisness. It almost doesnt seem worth the effort. Any input is appreciated.
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>The only thing I can think of is overstating the tax by a few bucks, is there anything else?
Overstating sales by 1 day in 8 months = about a 1/2% artificial increase?
Hard to see where that can be used for unethical purposes. For instance, fake growth (or less loss) for bankers or investors. Or better credit terms. The number is probably too small to have an impact there.
The biggest reason to fix it is to have clean books. Should this come up in an audit, you'd need to do the work anyway. If the booking method continues, you are only compounding the problem.
I've had to sit in on quite a few audit sessions (not being a bookkeeper, but a detail-oriented troubleshooter). Having multiple errors in repetition makes tracking down other problems more difficult.
Properly tracking those gift certificate sales will also help show how they contribute to overall sales. What is the % bought over the initial gift amount? Does this merit increased efforts to sell gift cards? (Usually, yes.)
I know the dollar return will be small...maybe you spend $100 in time to recoup $50 in overpaid taxes. But, you'll know that you're keeping a tight ship.
Can't tell you how many hours I've spent tracking down annoying $0.01 balance on account and getting one-sided entries to clean up aging reports.
Necessary evils.
Overstating sales by 1 day in 8 months = about a 1/2% artificial increase?
Hard to see where that can be used for unethical purposes. For instance, fake growth (or less loss) for bankers or investors. Or better credit terms. The number is probably too small to have an impact there.
The biggest reason to fix it is to have clean books. Should this come up in an audit, you'd need to do the work anyway. If the booking method continues, you are only compounding the problem.
I've had to sit in on quite a few audit sessions (not being a bookkeeper, but a detail-oriented troubleshooter). Having multiple errors in repetition makes tracking down other problems more difficult.
Properly tracking those gift certificate sales will also help show how they contribute to overall sales. What is the % bought over the initial gift amount? Does this merit increased efforts to sell gift cards? (Usually, yes.)
I know the dollar return will be small...maybe you spend $100 in time to recoup $50 in overpaid taxes. But, you'll know that you're keeping a tight ship.
Can't tell you how many hours I've spent tracking down annoying $0.01 balance on account and getting one-sided entries to clean up aging reports.
Necessary evils.
Thanks for the response you were quite helpfull. I know what you mean about the clean books. Since I started entering our daily sales I've made a spreadsheet to help me track down those .01 that turn out to be a bigger problem being masked.
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