Petty Cash

Part one

Project one

You have been put in charge of the petty cash. Previously, the money was just provided to staffs by the manager when they requested for small purchases. There have been no rules and other than receipts being provided no limitation regarding use of petty cash. You have to establish the rules for the use of petty cash and controls over its use. Describe the rules that you would develop? Why you have chosen those rules? And how they would control the use of petty cash?

To establish rules and control for the use of petty cash would require establishment of an effective petty cash control system. The following would provide an effective petty cash control system;

There shall establish a petty cash comptroller office where cash withdrawn from banks account will be recorded in general ledgers control.
Only one employee will be the custodian of the petty cash fund in the comptroller office
It is the responsibility of the petty cash custodian to provide cash upon approved requests, maintain safe box, and maintain all receipts on cash payments in a chronological order.
An imprest system is to be maintained by the cashier via the comptroller office where upon presenting all valid documents the cashier will be reimbursed cash to the original approved amount.
The receipts must indicate the amount, purpose and signature of the receivers and the cashier.
Petty cash must be separated from other receipts or any other petty cash provided by the organization.
There shall have procedures and guidelines limiting the usage of cash, purposes, and the authorization office stamp or signature.
Petty cash provide miscellaneous expenditures and not vital expenses that require purchasing department approval.
The receipt book shall be numbered consecutively and any cancellation shall be closed and not plucked. In addition, all receipts must be presented for reimbursement or control of imprest system.
Reimbursement shall be done on a regular basis and upon valid documentation and approval from the comptroller’s office.
The cash fund box shall be locked throughout and only the cashier will have access to the safe.
The petty cashier, comptroller officer or any other employees is prohibited cashing own checks to the petty cash fund.
Any suggestions, recommendations or issues regarding maintenance and operating of cash is to be addressed by the organization comptroller officer or the executive officer.

Part two

Activity 1

List the 3 types of transactions that might be entered into an accounting system

Transactions that should be entered in an accounting system are classified as internal or external transactions. Internal transactions take place within the organization while external transactions occur between the organization and the external environment. Basically, types of transaction to be entered in accounting system are; the transactions relating to financing activities, operating activities and investing activities. Examples are;

Business sale of a service or a product to the buyer
Borrowing money from lenders such as banks or fund ventures
Wages or salaries accruing or payment done
Disposal and purchase of a fixed assets
What types of financial information does organization usually need?

Organizations need financial information such as;

Organization expenditure level
Profitability information and benchmarks
Methods of pricing products and allocating costs of products
External information on equity, loans, and debentures
Financial statements information relating to sales, expenses, taxes, extraordinary gains and loses etc.
Earning information

Activity 2

List some of the discrepancies you might find when completing bank reconciliation
Transaction posting error
Checks not debited or credited by banks

Transactions omissions and commissions

If you find a customer has overpaid an invoice, what would you do?

With accurate and effective accounting system, the overpaid invoice is indicated as negative balance in their respective accounts. In case of a new invoice later, the overpayment can be treated as a credit and offset the excess payments. In such a situation the overpayment is deducted from future payments.

Activity 3

List the 10 principles of national privacy Act
Collection
Use and disclosure
Data quality
Data security
Openness
Access and correction
Identifiers
Anonymity
Trans border data flows
Sensitive information
What do you need to do as a whistleblower to qualify for protection under the corporations Act?

For a whistleblower to qualify for protection under the Corporation Act the following conditions must prevail;

The whistleblower must be an employee or officer of the organization or employee of a contractor of the organization supplying goods or services to the organization under question.
The subject matter must be possible breach of the Corporation Act or the Australia securities and investments commission Act 2001. The business, its employees or officer must have committed such a breach in law.
If the subject matter does not contravene the Corporation Act but it’s in danger to public health the whistleblower need to seek state Act protection.
The whistleblower is protected under rules only if makes the breach disclosure to either company’s independent auditor or the Australian securities and investment commission (ASIC).
List some of the acts that may affect a financial role.
Fraud accounting or creative accounting that leads to fraudulent financial reporting.
Independent auditors soliciting with organization officers and provide nonstandard audit reports, that is, professionalism skepticism.

Misappropriation of company’s assets

Activity 4

What is the most effective way of ensuring that all receipts have been correctly processed?

Companies keep records of their receipts in cash book. The cash book provide bank and cash columns that show balances at the end of financial period. To effectively ensure receipts have been correctly processed, the cashier must ensure that the cash book is up dated and most recent bank statement is requested from the bank. The bank statement and cashbook are compared and a reconciliation statement prepared to reveal and record discrepancies appropriately. In addition, petty cash book must be reconciled periodically and on a continuous basis to find errors and find the source of incomplete reconciliation.

Activity 5

Provide some examples of reconciliation comparison.
Cash book bank column versus bank statement reconciliation
Reconciliation comparison of profits calculated using absorption costing and profits calculated using marginal or variable costing methods
Petty cash book reconciliation
Reconciling purchases control accounts and sales control accounts

Activity 6

To make it easier to balance cash accurately what should you do?

To balance cash accurately, one need to compare transactions that appear on both cash book and the bank statement, update cash book from relevant information provided by the bank statement and then balance the bank column of the cash book to accurately reflect balance in the bank statement.

What information might you find on a bank deposit form?
The name of the bank
Name of the customer depositing
Account name
Type of the account
Amount deposited
Signature of the depositor
Date of depositing

Activity 7

What should you do if petty cash does not balance?

Chief cashier usually adds up the amount of cash in the petty cash box and compares it with the recorded and returned cash receipts. If the petty cash in the safe box tally with receipts returned, a journal entry is created to record the accounting ledgers. If the petty cash does not tally with the receipts returned, a reconciliation of petty cash is prepared. In this case, the reconciliation tries to find the error and provide the reasons for the differences.

Activity 8

Use the presentation of an invoice to answer the following questions:

Is this a complaint tax invoice?

Yes, because the supplier has an ABN and is registered for GST (tax invoice)

What is the supplier’s ABN?

$ 8.48

How much GST is included in the invoice?

$0.32

Were all items taxed?

Yes.

Activity 9

List some reasons why errors and discrepancies can occur in an invoice.

Errors and discrepancies can occur in invoices because of the following:

Mathematical error on the invoice.
Unauthorized and unapproved deduction of goods or services.
Invoice may be correct but the order purchased is incorrect.
Sales tax being billed incorrectly or subtracted inappropriately.

Activity 10

When should discrepancies be identified and dealt with?

Errors in the invoices should be identified and dealt with at the time of tax submission or on submission for payment. If sales tax was incorrectly billed, cross out the sales tax amount and deduct from the invoice amount and note the correct figure in the invoice.

Part three

Project 1

The most important thing about dealing with customers is that you must meet their needs. This means that you sell them what they want- not what you want to see. Explain what this means and how you put it into practice.

The statement means that businesses utilize their potentials, competencies and produce products based on the market demand gap and on customers’ needs and desires. Products are developed through business activities to provide satisfaction to the end users. In business marketing, this value and success of business is achieved through, putting in place effective marketing mix, and incorporating excellent customer relationship. To accomplish all this, target marketing approach is adopted. In this case, products are developed to specifically meet needs and wants of a specific end user. Essentially, business people have full understanding of the desires/demand, satisfaction level and wants of the consumer. Organization thus strategically employs effective marketing mix to achieve the objectives. Success can only be achieve by maximizing on activities through which demands, wants and needs of the customer are provided rather than providing what the business deem fit for customers.

Project 2

Read the following scenarios and answers the questions:

Scenario 1

Mrs. Smith purchased a computer printer that was supposed to be one of the most reliable brands. The printer worked well for three months and one day and then unfortunately stopped working. She is a regular client and became angry as the printer was recommended by your store to be reliable. She wishes to lodge formal complaint.

Scenario 2

Mr. Jones purchased some textbooks to be delivered to his office before the end of the month. You were able to organize before the end of the week, which was well before he expected them to arrive. He has telephoned in to compliment you and your organization on the services provided.

What are the customer’s needs in each scenario?

In scenario one, Mrs. Smith is complaining on the quality of the products sold. The client want product durable and reliable as per the company’s recommended quality. In scenario two, the client need is improved service delivery effectiveness and efficiency. Mr. Jones demand services delivered promptly without waiting the time period recommended.

How you would handle each situation /scenario. Include information regarding policies and procedures as a representative of your organization.

As an organization representative handling each scenario needs a thorough follow up on organization policies and procedures. The company is committed to efficiency, effectiveness and quality products delivery. Mrs. Smith case is far much intolerable since the company policies on quality were not adhered to. The policy of the company is a guarantee of six months. Thus, the company will compensate for any damage caused and provide after sale service to improve the quality of the products. Alternatively, the printer can be repossessed back and new, reliable and of high quality provided. In the case of Mr. Jones, the time period for delivery is yet to elapse. For this reason the company will immediately deliver products and explain the cause of delay.

What can you do to prevent the situation from happening again in scenario 1?

To prevent the situation in scenario one not to happen again, the company will recognize customers’ expectations and needs to deliver quality to the market. This will be through adequate market research to establish products qualities that meets buyers’ expectations and needs. Quality management system should be implemented to improve on quality management and control process for production of high quality and reliable products.

How can you use customer feedback to improve your services?

Customer’s feedbacks are significant in improving organization services. All complaints and grievances from customers are to be maintained in customer care department as a reference to increased quality. Nevertheless, it is important to differentiate customers who complain for everything and to everybody. In this respects, distinguishing justified complaints from fake is important. Customer feedbacks can be used to assess and evaluate satisfaction level, trust or comfort customers achieve from the business. The feedback can also act as a benchmark to measure the achievement or company’s attaining customers’ needs objectives.

Part four

Assessment activities

Assessment activity 1

Describe simple steps for greeting/welcoming customers in a retail shop

Being a retail shop attendant is all about customer handling and satisfaction. The major objective of a retail shop is to build customer relationship and interaction. Attracting and retaining customers is based on the shop attendant approaches in handling customers. Handling customers starts from the greeting to the parting process after the customer buy what they want. In fact, customer need to feel important and satisfied. Greeting customers or welcoming customer need to take approximately 10 seconds and around 10 feet from the main door. Greet customer smiling, precisely and with sincere greeting phrases. Thirdly, it is important for the customer feel that you are there to serve them even if you have another customer. The greeting must be polite and use formal phrases. Politeness and formal greeting essentially provide a first impression to a customer. After greeting and brief introduction of other special products you would like customer be aware of, it’s important to check whether they are satisfied or gotten everything they are looking for.

Assessment activity 2

Why is the way you dress for work and your personal presentation extremely important for business customers.

Personal presentation involves the individual personality that includes physical presentation, cleanliness, communication skills, interpersonal relations skills, and capacity to deal with work issues independently. The manner employees dress and personal presentation plays a critical part in maintain individual in employment and also securing new employments. From the customer’s angle, dressing and personal presentation portrays degrees of trust, integrity, hygiene and individual interpersonal relationship with the customer and the rapport. Customers will always perceive individual personality as a composite of their needs and fulfillment. Dressing code significantly portrays organization culture while presentation portrays the qualification of employees to attend customer’s needs and desires.

Assessment activity 3

What types of communication skills are required in a business environment and why are they important?

Communication skills are vital to both managers and employees. Other than the technical, administrative skills and the conceptual skills possessed by managers, communication skills are the most important for all employees in an organization. Generally, employees need to be well equipped with written and verbal communication skills. The most common types of communication skills are Organization communication skills, Interpersonal communication skills and Leadership communication skills. Organization communication skills include skills to resolve disputes, teaching skills, convincing presentation skills, writing skills, negotiating skills, and skills for initiating an open group discussions. Leadership skills are related to motivation, encouragement, building group relationship, being catalyst for change and creation of group synergy. Interpersonal skills encompass listening skills, relationship building, building trust, understanding emotions and self-controlling ones emotion.

Assessment activity 4

What is meant by the term cultural awareness?

Cultural awareness refer to the process of continually enhancing and understanding individuals own culture and others cultural element to promote performance of an individual in a multicultural society. It actually involve learning your and others beliefs, customs, values, common phrases, words meanings, important activities and common rites. It can also refer to skills acquired through social and professional process of culture interactions. This concept is particularly important in the contemporary globalized business environment.

Assessment activity 5

Why is establishing a rapport with your customer important?

Establishing a customer relationship with the customers is vital since it is the base of developing trust and comfort of the buyer. Usually, rapport is regarded as the function of customers comfort and their trust towards sellers or employees. Trust building starts with the business owners and employees integrity, while rapport increase customers comfort with the services or the products offered. Through rapport based on trust and comfort, the business is in a position to attract new customers and also retain current loyal customers.

What are some steps for building a good customer relationship?

Building a good customer relationship can take the following steps.

Excellent greeting and introduction approach.
Reduced distractions through questions or non-attendance.
Understanding the customers wants and needs by first appreciating customers need and provide assurance on the benefits to your products.
Reduce the service time when providing goods or services.
Actively listen to customer request, complains and appreciations.
Appreciate customer frequently as you serve, politely and with integrity.

Assessment activity 6

Explain the questioning methods you should use to find out a customer needs. Give examples.

Finding customers’ needs is very important in business and builds a good customer relationship or marketing relationship. Fundamentally, the manner customers are handled and questions are asked reflect the comfort and trust customers will have towards business products. Some of the questioning techniques and examples are as outlined below;

Leading enquiry- this tries to guide customers on their exact needs in an influential way.

Example: “let’s say you buy our product for $20, will you feel satisfied? Or add value?”

Open ended enquiries- these questions cannot be answered by a yes or no answer only, an elaboration are required.

Example: Why do you prefer this particular product to other products? Or what is your motive in purchasing this product?

Investigative techniques- The attendant interrogate persuasively on the needs customers has.

Example: Please provide some additional details of that product?

Assessment activity 7

What steps can you take to find out exactly what your customers’ needs are?

To understand customer needs the following steps are appropriate;

Greet your customer politely and briefly.
Reduce distraction when serving customers.
Listen carefully and actively to the customers’ requests.
Ask questions formally and politely to capture customers’ needs.
Probe politely on the alternatives preferred to fulfill customers desires effectively.

Assessment activity 8

Where could you find information about products benefits, features and choices to help meet the customers’ needs if you worked in a hardware store?

Unlike the traditional methods of marketing and marketing research, contemporary businesses especially in hardware shops/stores uses internet to get information on product features and how customers embrace retaining their choices. The advanced technology has changed the world into a global village where needs and product features can only be gathered from the internet. From this perspective, if I worked in a hardware store, internet and technological related resource centers are important to gather information relating to products features, customer needs and choices.

Assessment activity 9

Who could you talk to at work to find some help if you don’t know the answer to customer’s questions about a product?

Production department is organization unit responsible in producing products as suggested by the marketing departments. One department in organization may not be aware to the feature and the qualities of products. For example, finance unit personnel may not particularly answer most of customers’ questions regarding products. In such a situation, they are supposed to borrow a leaf from the marketing department or the production department personals. Similarly, this case refers to my situation where the production department staffs can assist in giving such answers.

Assessment activity 10

Why is fast customer service important?

There are many factors that affect and influence customer satisfaction level. Some of these factors include the time taken by customer in a queue, employee’s friendliness, accuracy in service provision, prices, quality, value, and clarification given upon request. Retaining customers is an important facet in delivering quality to customers. Fast customer service is important since it is the practice of working to customers’ satisfaction with an intention of developing a long lasting relationship.

How do you provide prompt customer service?

In order to enhance customer loyalty and retain customers, organization must forecast customers’ expectations and needs. Providing prompt services to customer must start by first establishing the customers’ needs and anticipating their expectation from your company or industry. Despite stiff competition, companies will always develop innovatively new mechanisms and processes for speed, efficiency, clarity, and effectiveness. One way to attain these is by implementing information systems that have high speed and that provide speedy services. For example, developing an internet based marketing (ecommerce) to reduce queues in the company’s premises.

Assessment activity 11

Why is it important to let customers know if there are any delays to customers and follow up promptly?

Usually, a positive word of mouth plays an important part in increasing customers’ loyalty. It is therefore, important to let customers know if there are any delays to customers and follow up promptly. This will in addition prevent customers to evaluate and explore competing alternatives and create a strong tie between the organizations and customers.

Assessment activity 12

When communicating with customers what can you do to make sure your message is clear and understood?

Communicating with customer does not give positive results in most cases. Therefore, it is vital for the marketer to have a detailed understanding and analysis on how to make customers understand and appreciate marketing message. The most common methods to make customers understand the message is by driving customers to acquisition. First, understand customers’ needs and develop a demographic or lifestyle behavior to increase customer relationship and effective gestures. In addition, as a marketer, one need to optimize on communication and asking questions which develop smarter and more contact approach to make customers understand message clearly.

Assessment activity 13

When serving a customer you have an opportunity to exchange information. When finishing a sale, what could you do to make the most of this contact to promote other products and services?

When serving customers, one has an opportunity to market other organization products. Customer service involves sensitivity, being sincere, and possessing adequate human relation skills. Quality customer service providers probe for other customers’ requirements or needs. Through probing or interrogation, marketers are able to provide goods that can be suitable as per the customer’s needs. For example, marketers can show different products that are similar or providing alternative remedies.

Assessment activity 14

Why is customer feedback important?

The attitude of customers towards company’s products depends wholly on how the feedbacks are taken and implemented. By implementing customers feedback, shows that the customers feedback are important indicating customers are distinguished stakeholders in the business. Actually the manner company’s handle feedback can transform organization perception and this will act as compensation on customer grievances or complaints.

Why is it important to listen and respond to customer feedback sensitively?

Listening and responding to customers’ feedback sensitively is important in portraying the importance of customers to an organization. Basically, customers’ feedback act as benchmarks on the way customers is handled. Implementing reasonable changes in service delivery or products features and qualities based on customers feedback play are role in success and increasing customer loyalty.

Assessment activity 15

Why should communication between the customer and the organization be recorded in simple language?

Communication between customers and the organization is vital in providing message accurately and precisely. Communicating through simple languages enhance understanding of the message. Thus, communication between organizations and customers need to be put in simple languages. Complicated language may deter the meaning or deteriorate the message intention.

Assessment activity 16

What are some steps you can take to make sure unmet customer needs are identified?

To make sure unmet customers are identified organization can carry out a market research or implement a market information system. Market research can take the following process.

Developing a market research plan
Establishing research population and samples
Developing effective research tools or techniques such as questionnaires and observation
Data collection
Data or information analysis
Decision making on whether to develop new products or improve existing products.
When is it ok to discuss other products or services with the customer?

Discussion with clients may sometimes take a wide spectrum and include other products not possessed with the marketers. Not all discussions are health for success in businesses. Organization staffs need to be trained on the limit of customer discussions. The discussion can extend to other products if the customer is distressed on needs and when the company does not directly trade in such products. Assisting the pressing desires of clients is crucial in increasing customer relationship. Conversely, the assistance should be limited and depend on the skills and attitude of staffs.

Assessment activity 17

When is it ok to refer customers to other services?

Referring customers to other services depend on the level of skills of the employee and the attitude of that employee. In this respect, employees should uphold and address customers pressing needs and wants. Employee should explain reasons why customers have been referred to other services. It is ok to refer customers to other services when safety needs are guaranteed and the referral should not compromise the customers’ safety or expectations.

Why is it important that you only make recommendation or referrals to customers about products and services you have a good knowledge about?

As noted above, referring customers to other services should not compromise their expectation and safety. It is important to provide recommendations to services where good understanding of services is available. Moreover, referral needs to take account on the client choice and the distress level of the customer.