Controlling Gas Purchases
As gas prices escalate, the need to control your dealerships gas expenditures increases proportionately. There have been numerous stories concerning thieves siphoning gas, individuals trespassing on dealership property in an attempt to locate "free" gas and gas station fill up and pull away. Given these stories, it is not a stretch to believe that employees might seize the opportunity to fill up their tank at your dealership's expense.
In the current economic climate, controlling this expense is becoming more critical. The perception among employees that an internal control is in place and being closely monitored is just as important as the actual monitoring of the process. There are as many ways to control this process as there are ways to circumvent it, so here are a few options.
• Utilize one or two specific gas stations, negotiating a favorable price for your company. In addition, explain to the station that they are to only allow charges with a signed purchase order, and that they detail the bill by P.O. One of your managers should be designated to control the purchase orders, noting on the purchase order the date, time, employee utilizing the P.O. and stock # of the vehicle. Enter the purchase orders into the payable system on a daily basis. At month's end, reconcile the purchase orders to the vendor bill. Scan the bill for duplicate stock #'s, stock # for sold vehicles, and unusual times for utilized purchase orders. Routinely discuss any discrepancies with employees to monitor the expenditures.
• Another control option would involve having all employees using a company credit card for purchasing gas assigned a specific code set up by the credit card company to identify them. Posting of all gas receipts would be done by entering the date, person's initials and time (military time) into the payables as the invoice number. In the description field, put the stock # of the vehicle.
• The monthly credit card statement can be sorted by name so that there is an easy way of tracking the invoices on the credit card and matching the postings in the payable system. The expense account can be downloaded into Excel, and the postings can be sorted by stock number to determine if duplicate stock numbers are entered. There is also the ability to reference the expenses to sold units or test drives. Several months should be downloaded at a time to catch duplicates.
• Once again, make it known that these expenditures are being closely tracked with discrepancies openly questioned. You will be well on your way to controlling abuse.
EisnerAmper is one of the largest regional accounting and consulting firms in the Northeast and is listed nationally as a Top 25 accounting firm. EisnerAmper has offices throughout the New Jersey / New York / Pennsylvania area. A member of both the Center for Public Company Audit Firms and the Employee Benefit Plan Audit Quality Center of the American Institute of Certified Public Accountants, the firm adheres to all Quality Control requirements of the AICPA.