Accounting Theory

The following information is provided as a substitute for the first point of contact with your “business

client”.

Treat this information in the same manner as you would if you are being introduced to your client or have

just had a physical visit to the client’s premises.

This information is usually part of the initial “getting to know you” introduction to the client.

From this point, you are expected to proceed to the next stage which is

the initial detailed “client interview”.

This initial detailed “client interview” should explore the details of the client’s operations

specifically in the areas that feel are of interest and relevant to the consultation.

I would expect that the responses to this interview will result in further questions and clarification,

perhaps once or even twice until you feel you are satisfied with the information you are able to

gather.

How should you conduct the interview?

This depends on the group, but one suggestion that often works well is that you take the

information in this document, and formulate a number of questions that you feel might be relevant,

(sometimes helpful to you and to the client if you group the questions into relevant sections) and

submit these questions to the client via MS Word document. I will then respond in detail to each

question raised.

The next phase then might be conducted “live” (perhaps using the online Wimba system) interview that can

be used to “flesh out” the responses and clarify points you need to raise and at the same time discuss what

to do and how to approach it. It will make more sense to do it at this stage rather than the beginning as you

will have a better idea of what you want to do at this point.

At a later stage you can revisit the questions and either send me more written questions or have another live

interview as the consultation progresses.

Note: do not be too concerned as to whether the market strategy is a good one or otherwise. Obviously you

will need to have an understanding of what the business is trying to achieve and the associated methods so

that the system can support it…but you are not being consulted as marketing or business consultants but as

systems accounting consultants (albeit that there is some overlap and that in real life the difference is often

impossible to distinguish).

E-commerce Retail Supermarket

Supermercado Online Loco de Kev Intend to have a web presence

 To take online orders

 To service the market of busy working families who generally live in the rural area in Howard Springs, Humpty Doo and Darwin river area – but will service the Palmerston area as well

 To provide a delivery service for those people who find it difficult to access the walk-in store - as public transport in the outer Darwin area is limited;

 Because customers need to access info on my products

Will provide 13hr 8am-9pm same day delivery service 7 days a week for all products including perishables.

I have five 5tonne pan-tech trucks.

I have my own web page designer, IT equipment/software provider & ISP but require my accountant to

provide me with system/operational guidelines and advice.

My supermarket is located in Coolalinga (in the outer Darwin area) with a large coldstore/warehouse type

facility located near the Darwin Railway Terminal situated at East Arm NT. I store the bulk of my

inventory in the warehouse, and transfer goods to and from the retail outlet as required..

At this point in time I provide a walk-in stationery outlet and don’t anticipate closing that operation until

my on-line operation is sufficiently viable. Therefore it would be useful if the system used for the “walk-

in” operation was able to incorporate the new online system i.e. Be integrated and operate concurrently and

parallel to the new system.

Currently all goods are labelled before being placed on shelves but I anticipate that I will need to introduce

some form of bar-coding and point of sale scanning technology into the supermarket in the near future.

Areas I want you to look at are the:

 Sales system

 Inventory management system.

 Shipping system.

Intention is to capture 25% of retail market in the outer Darwin area within 5 years

If the take-away home delivered food market is as large as it seems to be, then the potential for home

delivered groceries is enormous. The current barriers to online retailing as I see them are that customers

often like to browse/graze and to bargain hunt.

Potential market problems would include

Leading/bleeding edge of retail supermarket sales in NT

Internet connections in the rural area is limited, relying heavily on satellite broadband connections - that are

readily disrupted during the wet season

Whilst I have an existing system, I anticipate that the current accounting systems software and hardware is

obsolete and will need to be replaced in a manner that is consistent with your proposed new system.

I have access to approx. $5000,000 in capital/finance in addition to existing investment and infrastructure

I bank with one of the major banks in Darwin/Australia and have full credit card (but no charge card)

facilities and EFTPOS arrangements

Current inventory level is approximately $750,000 with approx. 5,000 brand items with 1000 of those items

having an average of 3 varieties per item

Current annual turnover is approximately $1.5 million per annum

I have several existing staff but can employ more staff if needed and justified

Manager – me

Checkout chics/lads – 2 each shift – use part-time casuals

2 storemen

Four drivers (one vehicle kept in reserve in case of breakdowns)

Part-time bookkeeper/clerk

As business grows I anticipate increases in staffing, especially in respect to sales persons and warehouse

staff. The new staffing establishment will reflect the new system that you will propose.

Sales in NT retail supermarket industry is highly competitive with low gross and low net margins. Large

chains provide heavy price competition. I see that competitive advantage in providing service, range and to

some degree reasonably competitive pricing, although not the price leader. Although customer loyalty is a

thing of the past, I am intending to generate a lot of repeat trade and to be able to analyse sales in a manner

that will help me monitor customer retention (and of course customer defection).