Dummy shipment to meet year end receiving requirement?
Close
Login to Your Account
Page 1 of 2 12 LastLast
Results 1 to 20 of 32
  1. #1
    Join Date
    May 2009
    Location
    Canandaigua, NY, USA
    Posts
    3,047
    Post Thanks / Like
    Likes (Given)
    151
    Likes (Received)
    1410

    Default Dummy shipment to meet year end receiving requirement?

    Has a customer ever asked you to make a "dummy shipment", basically some scrap or other parts, to meet a year-end delivery requirement that was known upfront by both parties to be impossible. The real goods would then be shipped later. This is to use funds before the end of a fiscal year, before they're lost. IMO, on some level it seems fraudulent, but I wonder how common it is.

  2. #2
    Join Date
    Dec 2007
    Location
    Central Ohio USA
    Posts
    3,987
    Post Thanks / Like
    Likes (Given)
    97
    Likes (Received)
    1797

    Default

    Sounds both shady and necessary. You'd probably be safe if you had the request in writing, didn't state that these were part no. XXX parts, etc. Just shipping someone stuff isn't a crime. Stating that it is something that it's not is the fraudulent thing. If they need a packing list, make them supply it.

    I have pre-invoiced things on occasion, to accommodate budget deadlines. I'm comfortable with calling it an up-front payment, deposit, etc. I don't misstate the any delivery dates (as in stating that 'whatever' was delivered last week, when it hasn't been.) I have just omitted the delivery date, though.

    Now, if they bring/send you some parts, and ask you to ship them back to them, you're probably in good shape...

    Chip

  3. #3
    Join Date
    May 2002
    Location
    South Central PA
    Posts
    14,140
    Post Thanks / Like
    Likes (Given)
    2566
    Likes (Received)
    3850

    Default

    Is this a government entity, or a private company?

  4. Likes digger doug liked this post
  5. #4
    Join Date
    Apr 2007
    Country
    UNITED STATES
    State/Province
    West Virginia
    Posts
    1,180
    Post Thanks / Like
    Likes (Given)
    744
    Likes (Received)
    510

    Default

    Seems like every company I ever worked for played quarter end and year end shenanigans along these lines. The current one is a multi-billion dollar company. It is generally caused by significant disconnects between very top levels in the company where policy is set with little to no idea what it takes to get stuff done. Those on the lower levels are tasked with getting this or that done with stupid more or less artificial constraints. So you do what you gotta do.

  6. Likes Philabuster, sfriedberg liked this post
  7. #5
    Join Date
    May 2009
    Location
    Canandaigua, NY, USA
    Posts
    3,047
    Post Thanks / Like
    Likes (Given)
    151
    Likes (Received)
    1410

    Default

    Quote Originally Posted by Mud View Post
    Is this a government entity, or a private company?
    Private company, but all their work is government.

  8. #6
    Join Date
    Jul 2010
    Location
    Northern California
    Posts
    223
    Post Thanks / Like
    Likes (Given)
    726
    Likes (Received)
    190

    Default

    Quote Originally Posted by Conrad Hoffman View Post
    Has a customer ever asked you to make a "dummy shipment", basically some scrap or other parts, to meet a year-end delivery requirement that was known upfront by both parties to be impossible. The real goods would then be shipped later. This is to use funds before the end of a fiscal year, before they're lost. IMO, on some level it seems fraudulent, but I wonder how common it is.
    If it feels fraudulent, then it probably is.

    And if you feel that way you should not be participating in the fraud.

  9. Likes oldster, Ox liked this post
  10. #7
    Join Date
    Dec 2010
    Location
    WA, USA
    Posts
    1,506
    Post Thanks / Like
    Likes (Given)
    2062
    Likes (Received)
    1041

    Default

    Back in the seventies I was the requester on multiple PNs and various quantities of quick turnaround PCBs. A PO was awarded (by a purchasing agent, not me) that covered all the work. Quick turnaround and collaboration with prototype development was the suppliers forte. Our "needs" evolved from the exact letter of the PO. Total PO $$ were fine. I coordinated some "duplicate receiving" of enough parts to pay for the evolution. PO was satisfied, engineering got the parts we needed, supplier was paid in full. No harm. no foul (my opinion).

    That was in the seventies. Recounting it today makes me glance over my shoulder (are they coming after me?). Today, NFW. If it's important enough, and the rules are rigid enough, that "actual" delivery will be too late, you're sticking your neck way out. If you ship a box with the PO# referenced on the label or attach a fraudulent packing list, you are culpable. Suggest your customer does the work to get you prepaid.

  11. Likes Conrad Hoffman liked this post
  12. #8
    Join Date
    Dec 2008
    Location
    Vt USA
    Posts
    8,768
    Post Thanks / Like
    Likes (Given)
    1413
    Likes (Received)
    3085

    Default

    Business as usual.

    Heard of , seen it, but I've never been in a position to be the one to authorize it.

    Get it in the books, (for whatever benefit ) then deal with the "return" , and subsequent shipment of good parts.

    I also hear it's been part of some ebay business models from the git go. ;-)

  13. Likes Thomas Paine liked this post
  14. #9
    Join Date
    Dec 2010
    Location
    WA, USA
    Posts
    1,506
    Post Thanks / Like
    Likes (Given)
    2062
    Likes (Received)
    1041

    Default

    Quote Originally Posted by CalG View Post
    I also hear it's been part of some ebay business models from the git go. ;-)
    I'm interested in what that means. Care to elaborate? or suggest a source of reading material?

  15. #10
    Join Date
    Aug 2008
    Location
    Sussex, England
    Posts
    3,454
    Post Thanks / Like
    Likes (Given)
    13
    Likes (Received)
    782

    Default

    Absolutely routine practice in my days with RARDE/DERA/DRA due to UK Government funding things by "yearly vote" with no way of carrying project expenditure over financial year boundaries. Some official shenanigans to carry fixed costs and wages over but for project stores and similar expenditure you were on your own. Given the gross incompetance of most project managers it was unsafe not to leave a buffer between actual expenditure and assigned funding until you got close to teh last month of the financial year. I used to be royally fed up with having my funding stolen to support the hopeless and incompetent. Only saving grace for being good with the money and technical side of project management was that I always got what I asked for at appropriation time. The other nitwits figured that if I had it there would be agood cahnce of some cash being left for them to steal!

    I've had approaching 1/2 a million pounds worth of stuff outstanding in empty boxes delivered shortly before year end before now. Trying to explain to les bosses that a one month lead time from second week in April to get orders out for equipment on 6 to 8 weeks delivery isn't compatible with field trials in June re-defines frustration. Just a fairly minor example of institutionalised insanity. You'd have to had worked there to believe some of it, even having been in the middle (the calm centre at the eye of the storm) of some of the crazy goings on I'm unsure whether I actually believed what was going on.

    Clive

  16. Likes PDW liked this post
  17. #11
    Join Date
    Jan 2007
    Location
    Annapolis, Maryland
    Posts
    528
    Post Thanks / Like
    Likes (Given)
    745
    Likes (Received)
    291

    Default

    A company (very large) I used to work for use dot do it all the time - especially at the end of the year. That called it "ship in place" and would use it to make numbers. Seemed fraudulent as hell, but I figured it was the SEC's job to find that stuff and not some lowly engineer to report it (and surely lose my job). That said, MOST (not all ) of the product was good and it was always al prepared as if it was actually going somewhere. After the quarter or end of year passed, I think they would the 'return' it all. It was also all within the company, i.e., they didn't ask other vendors to do that on their behalf to my knowledge.

    I woulds'd do it. If they want you to ship good, known product to them to make numbers, that's one thing, but I wouldn't expect to 'receive' any 'return' after the fact...

    Brent

  18. #12
    Join Date
    May 2005
    Location
    AZ
    Posts
    2,441
    Post Thanks / Like
    Likes (Given)
    236
    Likes (Received)
    829

    Default

    I have been in this type of situation over the years, and it does seem to occur mostly with large companies in most cases doing work on govt. prime contracts or the downstream sub-contracts. I have never viewed it as fraudulent, and it has occurred both in cases where as a supplier we were behind schedule for any number of reasons, and/or where the p.o. from the customer was placed way too late for the delivery requested. In my previous cases, there was only one time where some sort of actual physical box was requested; in all other cases, it was a simple request for the invoice before the end of the year or whatever the relevant date was. I think this usually occurs where buyers and sellers have a good working relationship, and the buyer is aware of the specifics of the supplier's progress on a project. In many cases, it's the difference between completing the order, or having it cancelled.

  19. #13
    Join Date
    Dec 2008
    Location
    Vt USA
    Posts
    8,768
    Post Thanks / Like
    Likes (Given)
    1413
    Likes (Received)
    3085

    Default

    Quote Originally Posted by extropic View Post
    I'm interested in what that means. Care to elaborate? or suggest a source of reading material?

    scams.......

  20. #14
    Join Date
    Dec 2005
    Country
    UNITED STATES
    State/Province
    New Jersey
    Posts
    3,955
    Post Thanks / Like
    Likes (Given)
    284
    Likes (Received)
    498

    Default prepaid invoice

    I did this a few times with local government entities. The fiscal year ended 6/30, so they spent the last of the budget money on the wish list. The PO and Invoice stated delivery ASAP, so a july delivery was asap.

  21. #15
    Join Date
    Aug 2005
    Location
    Toronto
    Posts
    5,424
    Post Thanks / Like
    Likes (Given)
    3626
    Likes (Received)
    4238

    Default

    i believe in commercial law when you invoice ownership changes, nothing to do with delivery, so there must be some other driver. As its common in many businesses to get paid all or part in advance, there is nothing unusual about invoicing in advance of shipping.

    There is zero issue in invoicing in advance of shipping, but this is different. The issue is you are being asked to fill out a falsified packing slip/waybill. which is a commercial document between your firms. Falsifying commercial documents to a transaction should be more than feeling, its clearly fraudulent. This to me carries the risk of some third party being duped so no, i wouldn't do it. There is also the problem it sends to your organization.....its ok to be a little slippery....well, no its not.

  22. Likes Ox liked this post
  23. #16
    Join Date
    Jan 2008
    Location
    Merced, Calif
    Posts
    1,046
    Post Thanks / Like
    Likes (Given)
    1257
    Likes (Received)
    221

    Default

    We did it for 25 years with Kraft Foods -- If you like your customer do it -

  24. #17
    Join Date
    Sep 2006
    Location
    Sacramento County, California
    Posts
    4,127
    Post Thanks / Like
    Likes (Given)
    2607
    Likes (Received)
    1518

    Default

    When I was in Aerospace with a large company, I was peripherally involved in purchasing for my department. The manager would develop his budget at the first of each year. He would aim for using all of it because if he did not do so, he would be limited to his actual usage and would be cut back the following year. This theory was called "budget equals actuals"

    This led to his requesting me to spend money in certain amounts with associated invoicing so that he could show that he had either used the actual budget that he had written at the first of the year or exceeded it so that he would need more in the following year.

    During the ten years that I worked there, if nothing else, everyone in the office got a new desk and lamp to go with it. Some years we bought new typewriters and desk calculators These were of course all charged to the appropriate government account. The items didn't have to actually be delivered just as long as they could be shown as an expense in the particular fiscal year in question so that the budget would be shown to have been valid.

    I did what I was told, but I thought it rather wasteful at the least. For the record, that company is no longer in business. LOL.

  25. #18
    Join Date
    Aug 2005
    Location
    Toronto
    Posts
    5,424
    Post Thanks / Like
    Likes (Given)
    3626
    Likes (Received)
    4238

    Default

    Quote Originally Posted by Newman109 View Post
    When I was in Aerospace with a large company, I was peripherally involved in purchasing for my department. The manager would develop his budget at the first of each year. He would aim for using all of it because if he did not do so, he would be limited to his actual usage and would be cut back the following year. This theory was called "budget equals actuals"

    This led to his requesting me to spend money in certain amounts with associated invoicing so that he could show that he had either used the actual budget that he had written at the first of the year or exceeded it so that he would need more in the following year.

    During the ten years that I worked there, if nothing else, everyone in the office got a new desk and lamp to go with it. Some years we bought new typewriters and desk calculators These were of course all charged to the appropriate government account. The items didn't have to actually be delivered just as long as they could be shown as an expense in the particular fiscal year in question so that the budget would be shown to have been valid.

    I did what I was told, but I thought it rather wasteful at the least. For the record, that company is no longer in business. LOL.
    sure, but what does that have to do with having to a fake shipment? Being invoiced before year end is entirely different, commonplace and not fraud, use it or lose it budget mentality...and its not just government

  26. #19
    Join Date
    Sep 2006
    Location
    Sacramento County, California
    Posts
    4,127
    Post Thanks / Like
    Likes (Given)
    2607
    Likes (Received)
    1518

    Default

    Quote Originally Posted by Mcgyver View Post
    sure, but what does that have to do with having to a fake shipment? Being invoiced before year end is entirely different, commonplace and not fraud, use it or lose it budget mentality...and its not just government
    Go back and read Post #2 by Chip Chester. He mentioned invoicing. Buying stuff to pack your budget is no different from shipping junk out to assist a customer. It's all questionable.

    On second thought, don't bother since it doesn't matter what you think.

  27. #20
    Join Date
    Aug 2005
    Location
    Toronto
    Posts
    5,424
    Post Thanks / Like
    Likes (Given)
    3626
    Likes (Received)
    4238

    Default

    Quote Originally Posted by Newman109 View Post
    Go back and read Post #2 by Chip Chester. He mentioned invoicing. Buying stuff to pack your budget is no different from shipping junk out to assist a customer. It's all questionable.

    On second thought, don't bother since it doesn't matter what you think.
    You re-read Chip's post, it agrees with what I've said.

    The OP's question is this false/fraudulent shipment and people is replying "hey I've been asked to invoice early before" That's common, perfectly ok and unrelated to the issue the OP's asking about. He's being asked to commit fraud by falsifying a shipment and presumably shipping documents, packing slip and or bill of lading, else whats the point. That's fraudulent. There is no fraud in invoicing early when the customer asks you to.
    Last edited by Mcgyver; 05-23-2016 at 06:18 AM.


Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •