I found this error during my month end bank reconciliation process. The story is quite dramatic. I summarize all the information, the log could be like this:
Date 3, BNS BANK notified treasury manager Carson and senior specialist Christine that, there was a cheque amount was cashed error by BANK. Our BNS BANK firstly released the funding to the vendor, then took the funding back. They corrected the mistake on the same day. To avoid future confusion, Carson Manager decided to void the cheque and reissue the new.
Date 5, followed by the communication with BANK, Carson, and Christine filed the stop payment immediately and notified our BNS BANK. In the afternoon, when the confirmation from BANK arrived, AP then reissued a new payment to the vendor.
Date 11, the replacement cheque was returned to the office, because the vendor did not pick up from the UPS agent. AP Gurpreet decided to keep this cheque for a while, in case the vendor come back from a business trip and looking for this cheque.
Month end process began, while I was looking for unbalance amount in the bank accounts. This amount was shown as paid already to the vendor, but we were still holding the cheque till month end. The vendor should never receive the funding.
Brought up this question to my co-workers, we called the vendor and called the BANK. The vendor told us that he was able to cash the funding on Date 7. As the whole team knew, the new cheque was cut on Date 11. We wonder if the vendor got the cash from the voided cheque. If that's the case, it could be our nightmare.
We received BANK and vendor's images the next day, it confirmed what we afraid of. Although BANK already filed the stop payment to the voided cheque, but nobody knows what happened, the cheque was still cashed by one of the BANK operator by error.
Advised by our national manager, she would like a explanation and cleared up action from BANK first, then we also clean it in our SAP in next month.
We spent almost a whole month to communicate with BANK and tried to understand what has happened. Unfortunately, BANK could not do much about it, they provided some sort of study result and action plans.
Finally, in order to close this case and balance by next month end. Our manager then advise us to manually cashed the amount to the reissued replacement cheque via SAP, and discard the paper (physical) cheque to the bin.
