Independent Contractor 1823
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Currently my company is a customer of another company where I am reselling their products and services, my relationship with this company is not as an independent contractor, but as an actual customer. Because I am a small company, my customers prefer to pay the vendor directly either via credit card or wire transfer. My customers are aware of a mark-up in the pricing that is beyond the posted prices of these particular products and services, but they are unaware of the exact pricing because I am given special pricing which is based on sales commitment.
The problem that I am having with my vendor is that they their accounting department is stating that any of the overage that is paid into the company can not be paid to my company because of Sarbanes Oxley. They are just stating that the method that I want to do business with them in is not in compliance with Sarbanes Oxley. They are stating that any over payment may be kept in my company account there and be used against future business with them but not paid to my company.
Does this make sense? My customers are paying either via credit card or wire transfer and having the monies deposited into my company account with this vendor and I do not understand what this method has to do with Sarbanes Oxley.
Any help or advice on this issue would be greatly appreciated.
Thank you.
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It makes absolutely no sense in the realm of Sarbanes-Oxley. It seems like they are trying to use this as an excuse to eliminate you as a reseller of their products.
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As a volume purchaser and value-added reseller, maybe the relationship is more as an independent ‘agent’ of the company?
I’m less versed on how the legal relationship of entities might work in SOX financial record keeping (e.g., contractors, agents, etc). The accounting department most likely requested this because they are receiving the payments directly and it creates financial differences (i.e., due to the different rates or surcharges your company might charge for the value-added service).
Unless you can convince the Accounting department or company otherwise, the only solution I see is for you to collect credit card payments directly (creating an ‘arm’s length’ transaction). If you move to your own credit card collection process, you’d need to charge a little more to make up for the additional expenses.
Maybe others have a better solution and maybe you can talk in more detail with a company representative on the SOX and even the accounting department to arrive at a satisfactory solution. Good luck and maybe other members might have ideas to help here.