Receivables skimming — false write-offs and credits (including utility billing adjustments)

An employee keeps a customer's payment and removes the balance from receivables with a write-off, credit memo, false return, discount, or, in utility and municipal billing, a meter or billing adjustment. A variant posts credits to accounts of friends or relatives without taking cash, which overlaps with the sales conflict-of-interest scheme.

Planned. Analysis for this scheme is in development.

Starter pack: Revenue and receivables review

Red flags

In the data

• Write-offs and credits concentrated by user, customer, or timing
• Customer payments received on accounts already written off
• Adjustments posted by users who also handle cash receipts
• Adjustments just under the approval threshold
• Utility billing adjustments on accounts with normal consumption history

Behavioral

• Employee handles specific customer accounts personally
• Employee discourages direct contact between auditors and customers

Internal controls

• Same user can receive cash and post adjustments
• No approval or independent review of write-offs and credits
• Written-off accounts are not monitored for later receipts