Greed

What had been going through my mind on this thread has been several years ago I paid off a credit card all but two dollars. I let it go to see how far the company would go in collecting. It went the entire route including the letters threatoning collections untill I recieved the phone call trying to collect the money and when I asked how much was owed the rep hemmed a little and put me on hold. A few minutes later she came back on and said to forget about it because her suppervisor cleared the account.

That experience still gives me a chuckle once in a while because they spent more to try and collect the money then what was owed and how much these companies rely on computors...
 
I'd just like to interject, if I may. I spent 7 years working as an auditor in a hotel. Call it an accounting clerk position for simplicity.

Daily, I had to balance the day's receipts .... to the penny. Then at month and year's end, I had to balance them. One year, the year end total was out by seven cents. I spent three days tracking down that bastard, to a typo, no less. the short and long of it is, in accounting terms, a penny and a 100 bucks are no different. You still need to balance. To the penny. That missing penny can't just be forgotten. Nor 2 dollars. That money has to actually be transfered into an overs-and-unders account. And that transfer has to be authorized, noted, and justified. Usually by the accountant, not the clerks. Too many of them and the company is sure to get nailed for an audit, costing thousands. The transfer of that penny between accounts also costs money. Clerks and accountants aren't free. Computer time isn't free. So, in the long run, cutting off someone's power for a penny might well make fiscal sense. It might only be chump change for Joe Q Public. But in the accounting world, it's an X where a zero belongs.
 
Then next time she's two cents short, then three cents, then a few bucks...

Where's the line for how short you can be without having to pay? A dollar maybe?

Then what happens when other people start paying short of their bills? Let's say her power company has ten million customers. They all pay a dollar short, that's a huge amount of cash gone.

She needs to pay attention to her finances better. Ignorance is no excuse.
 
Professur said:
Clerks and accountants aren't free. Computer time isn't free. So, in the long run, cutting off someone's power for a penny might well make fiscal sense.
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It also cost to turn off the power, weather it is done remotely or someone is sent out to do it manualy. Somewere down the line there is cost incured whether it is through the computor or labor.

What is the most cost effective way, right off the cost or turn off the power? Time wise it would have been cheaper to write off the penny as a bad dept or carry it over to the next billing cycle then it would have been to turn off the power.
 
No I get the point perfectly clear. That doesn't mean it's right or makes any damn sense.

Maybe I'm crazy, but I consider my time more valuable than seven lousy cents. Maybe yours isn't. Not my fault.
 
SouthernN'Proud said:
Maybe I'm crazy, but I consider my time more valuable than seven lousy cents. Maybe yours isn't. Not my fault.
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Can't argue with that...

Professur said:
One year, the year end total was out by seven cents. I spent three days tracking down that bastard, to a typo, no less.
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Three days labor to find seven cents? Figuring aproxamatly $100 a day it took in your labour alone three houndred bucks to find a few cents. To sum it up the dollars don't make sence...Why not correct the error and make a note of it and keep an eye out for any more descrepancies that might show a pattern...
 
Highway ... the size of the error is irrelevant. 7 cents, or $300, it doesn't matter.

You're right about correcting the error. But (read above) too many of those little corrections and you've painted a bullseye for an auditor. And that costs a helluva lot more than $300. I repeat. It wasn't $300 to find seven cents. It was $300 to find ... an error. What if those seven cents weren't alone? What if they were actually two or more errors that cancelled each other out almost perfectly (which is actually exactly what it was).

Oh, and just out of curiosity, should I call your bosses and tell them that if they make a small enough mistake on your paycheques that they should just shrug it off?
 
SouthernN'Proud said:
No I get the point perfectly clear. That doesn't mean it's right or makes any damn sense.

Maybe I'm crazy, but I consider my time more valuable than seven lousy cents. Maybe yours isn't. Not my fault.
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It doesn't matter what your time is worth. I'm pretty sure he got paid a hell of a lot more than seven cents to find the error. Hell, it wasn't even his seven cents. Point is it has to balance. Period. That's accounting, that's the way it works. If it doesn't make sense to you then you're not an accountant. Nothing wrong with that, just a different way of seeing things.
 
Actually, you can set a materiality threshhold and ignore stuff under it. However, prof's right. Too many of those, and somebody's gonna come looking. If you're lucky, it's an internal auditor. If you're not, it's a governmental agency.

That's why it's set up like it is. The default is to shut 'em off if it ain't fully paid. For a penny, you can usually get them to not do that (see highwayman's experience). However, YOU have to be proactive to forestall the process.

She obviously WASN'T. Not the company's fault, given the information presented here. It's on her.
 
Professur said:
What if they were actually two or more errors that cancelled each other out almost perfectly (which is actually exactly what it was).
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That went through my mind along with it could have been by design, eg somebody trying to be slick. I did not bring this up to run down your dilegence but your time could have been better utilised. Keeping in mind book keeping errors have brought down companies, Enron comes to mind on the last part.

What I am saying is after doing some checking and serious digging and nothing is realy turned up correct the error and keep an eye out. if it turns up again, weather a few cents or serious dollars then find out what the problem is.
 
Actually, at the IOU's (invester owned utilities) the default is to shut them off. The smaller REC and REMC's (rural) power companies, like the one I work at, will forget about something like this (or like SnP said just pitch in the penny themselves) because the company is small and the billing clerk probably knows the person who owes the penny. I've seen it happen while visiting one of the local REMC's for a video conference setup. The lady in charge of the computers was also the billing clerk.
 
I've had paychecks be off by a few cents. Judging from my frame, it didn't starve me to death.

Couple years ago I went in to pay a water bill (I think it was water...) I took the check I had made out the night before. I accidentally transposed the two digits in the cents column, causing a nine cent shortage. The lady at the window saw it when she entered the payment, and mentioned it. I dug through my pocket for the dime, and she told me not to worry about it, and tossed in the dime. She still works there, evidence that she didn't starve either.

An accountant I am not nor shall I ever be.

I guess common sense really is dead.
 
SouthernN'Proud said:
I guess common sense really is dead.
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Common sense is and always was a myth.
Accounting has nothing to do with common or uncommon sense, it has to do with accounting. If you get it, you get it. If you don't, no amount of explaining will ever make it clear. As I say, it's a different way of looking at things.
 
As I recall, SnP, you didn't understand HL's explaination of how not paying cash for a new car profitted him either. But then, you didn't hesitate to request his advice about your mortgage request. More than a little hypocritical there. That you don't understand it, fine. But don't go insulting it on that basis.

If PT and I start up a conversation about COBOL (that's an old computer programming language) you're not gonna understand it either. But it's kept electrical power to your house for the last couple of decades, and it keeps the 8:45 to Chattanooga on time. You benefit daily from that exactitude in accounting. You rely on it. It's what keeps those nickles and dimes from accidently getting rounded off when you pay for something.
 
I be thinkin' you and everybody else'd have an issue if all (500 000 or however many customers they have) of your paycheques were short a penny, oh wait, maybe a nickel? a dime? a dollar? hell, ten bucks is nothing, they can live without it/oops i forgot every single month, accounting or no accounting.
 
I'll agree that its an Accountants job to make sure all the pennies are there,but its Accounts Recievable that determines if its worth the $$$ to go after pennies.I can't imagine it being fiscally reponsible to spend hundreds/thousands of $$$ to go after pennies(yes I know they add up ).
 
Again, the amount doesn't matter. Almost all billing isn't even seen by human eyes.

Last attempt.

A computer sees an account as one of two things. Zero, or not-zero.
If zero, take no action.
If not-zero then
is amount more than 30 days old (yes/no)
if no, print statement and send
If yes, is amount more than 60 days old (yes/no)
If no, print statement, and warning letter and send
if yes is amount more than 90 days old (yes/no)
If no, print statement and final warning,and send and advise logistics to schedule a cut off during the next month, to be confirmed
If yes, confirm cut off, and print statement, notice of cut off, and send.


Where exactly in there is anyone going to give a damn about wether it's a penny or not?
 
Exactly. Computer programs don't work under the premise of management by love.

The pain of it all would have been if they charge a re-hookup fee. Now that would have been ugly since those decisions are made by humans at computer terminals. They have the built in heruistics to determine that there was a mistake of a mini magnitude and that a freebie rehook is a proper course of action.
 
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