Sales Ledger Fraud

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CelticStar
CelticStar Registered Posts: 142 Dedicated contributor 🦉
I am experiencing brain block at the moment and need a bit of help to work out how one person being in charge of the sales ledger could lead to fraud. I can think of loads for the purchases ledger but I'm finding the sales ledger a bit more difficult.

I suppose there's the chance that someone would write off debts when they could be recovered but I can't really think of anything else. There is no debit/credit card machine in place in the company I'm writing about so I can't relate any fraud to that. I suppose someone could alter the cheques in some way but that isn't very likely if the cheques are printed. There's also the chance that cheques could 'disappear' if someone else wasn't involved in 'booking them in' when the post arrives before passing them on to the Sales Ledger Clerk.

Any help gratefully receieved - I would make a rubbish fraudster lol.

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  • Primble
    Primble Registered Posts: 734 Epic contributor 🐘
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    CelticStar wrote: »
    I am experiencing brain block at the moment and need a bit of help to work out how one person being in charge of the sales ledger could lead to fraud. I can think of loads for the purchases ledger but I'm finding the sales ledger a bit more difficult.

    I suppose there's the chance that someone would write off debts when they could be recovered but I can't really think of anything else. There is no debit/credit card machine in place in the company I'm writing about so I can't relate any fraud to that. I suppose someone could alter the cheques in some way but that isn't very likely if the cheques are printed. There's also the chance that cheques could 'disappear' if someone else wasn't involved in 'booking them in' when the post arrives before passing them on to the Sales Ledger Clerk.

    Any help gratefully receieved.

    that a different person records the cheques to the person tht banks them?
  • Jimmyboy1888
    Jimmyboy1888 Registered Posts: 32 Regular contributor ⭐
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    Could issue credits (write off) against recoverable debt, as you say. All credits should therefore be authorised by someone else.
    Open new accounts for people/friends who default on their debt. Again, new account forms should be authorised by manager/director and all necessary credit checks performed.
    Cash sales should be monitored to ensure cash is banked and posted to the correct account.
    Not sure what else really ?
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
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    Issue an unauthorised credit note
    Issue sales invoive at a lower price then the usual price
    give discount when not allowed
    issue invoice for 100 unit instead of actual sale of 100o units
    Do not chase outstanding debt -thus giving longer credit facility
    Approve sale of goods over and above the agreed credit limit
    deliver goods to one customer and invoice it to other (or not issue invoice at all)


    some of the examples
  • CelticStar
    CelticStar Registered Posts: 142 Dedicated contributor 🦉
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    Some great answers, thank you very much, that's really helpful.
  • blobbyh
    blobbyh Registered Posts: 2,415 Beyond epic contributor 🧙‍♂️
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    All of the above but a variation on the credit note/reducing invoice amount would be to collect a cash payment from a debtor but post a lower amount to the accounts as a discount agreed. For example, collect £1,000 from the debtor, post £950 to the accounts while the £50 balance - allegedly written off as a "discount allowed" to the accounts - is pocketed by the fraudster.

    I imagine a very common fraud in cash rich, smaller companies where the cash is often collected by the owners themselves.
  • CelticStar
    CelticStar Registered Posts: 142 Dedicated contributor 🦉
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    Another good one. Thank you. blobbyh.
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