A mid size manufacturer suspected they were over accruing sales and use tax. They did not know how this was occurring and asked us to investigate.
We met with all appropriate client personnel to gain a full understanding of their current processes. We pulled together all available data, invoices, and returns to analyze the situation. We were able to identify an error in the client’s processing of void checks. They were accruing tax on the void check, as well as on the replacement check. The volume of void checks was large enough to cause a substantial over accrual of tax.
We were able to recover more than $500,000 in over accrued sales and use tax. We also worked with the client to implement a process improvement to prevent this from happening in the future.