Question for CPA or Accountants - regarding GAAP?

Question

I have just begun working for a company that sells bath and body products, wholesale & retail. The business has not previously kept hard copies of invoices, filed numerically, anywhere. I would like to begin doing this. They do not want to have to "print" all of these invoices every day. How can I communicate to them why it is important to have a file of all invoices in hard copy form? Is it important? I have always kept invoices this way. please advise.

Answer 1

This is not a GAAP question. It is a question of internal control.

Assuming you are using some kind of software to keep your invoice records, there is no need to print all your invoices. The key is to make sure there are proper review processes in place to review, post, reconcile and track collections related to invoicing.

For tips, you may want to review SAS (Statements on Auditing Standards) issued by the FASB. Those statements contain guidance for auditors - who are always concerned about controls as they impact a company's financial statements.

Answer 2

I suggest to everyone I deal with to electronically file copies instead of having paperwork all over the place. There is no requirement by the GAAP to have hard copies of invoices stored away. You do need to have quick access to your records for business purposes, but in today's world it is better to have them stored electronically. Think about it... it is so much more convenient being able to access that information with a click of a mouse instead of having boxes full of paperwork.

Answer 3

Unfortunately, I cannot quote US GAAP, but there is no requirement in Canadian GAAP (or GAAS) to keep invoices in hard form. So long as you can get a copy electronically, that should suffice.