I work for a franchise, our clinic is located in one state and our administrative offices in another. I am required to do the accounting for our office. I have a credit card machine which processes credit card payments and a check scanner that scans check payments and deposits them into the corporate account. The problem arises when there are cash payments, I am required to take the cash and purchase money orders ( which I must endorse) or for large amounts of cash ( anything over $1000) I have to get a cashiers check. This requires me to deposit the money in my personal bank account and then have the cashiers check drawn from my account. I have expressed to my boss several times that I am not comfortable doing this but I have gotten no where. My question is: Is this legal? Can I be held responsible if these money orders or cashiers checks get lost or stolen ( some weeks I am required to mail out the checks)
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3If nothing else, open a separate checking account and feed all business activity through it, so as to separate it from your personal checking account.– RonJohnCommented Nov 16, 2019 at 4:37
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6Anyway... "This requires me to deposit the money in my personal bank account". The IRS would not look kindly upon this, and you might be charged with crimes. Company money goes in company accounts. That's inconvenient for your boss, but tough.– RonJohnCommented Nov 16, 2019 at 4:40
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4The whole thing is an illegal mess. Company money goes in company accounts, not in your own checking account.– RonJohnCommented Nov 16, 2019 at 16:43
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1Is there an actual law regarding this. I have reached out to a few attorneys and they really weren’t sure if an actual law was being broken. Short of quitting my job I’m not sure how I can get them to see that this is not right.– TUPCommented Nov 16, 2019 at 17:17
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1The IRS sure might frown upon it. You really should ask Law.SE, though.– RonJohnCommented Nov 16, 2019 at 17:48
1 Answer
My question is: Is this legal?
The issue for you is will those cash transactions cause your banker to contact the government about a suspicious set of transactions. Daily cash transactions if they are near the reporting limit might cause them to wonder.
Your bank might feel that you are running a business out of a non-businessa count and want you to get a business bank account. While that isn't a legal question, it can be a concern for you.
Can I be held responsible if these money orders or cashiers checks get lost or stolen ( some weeks I am required to mail out the checks)
If you break company property or you willfully "lose" company property, then yes you can be held responsible. They could deduct it from your pay, fire you, or bring criminal charges. These responsibilities would exist even if you were making these cash deposits directly into a company bank account.
Of course since you are making deposits of company cash into your account and then turning them into cashiers checks or cash into money orders, then if they suspect that you are skimming money, you might end up having to explain every transaction into or out of your personal bank accounts.
Most companies will not want a single person to be responsible for collecting the cash, counting the cash, turning the cash into another form, and then sending the check or money order. It is too easy for that one person to hide some of the cash. The term is segregation of duties. Their accountant should be enforcing this accounting control.
