This Business Administration Course Case Study applies to most professional services industries, including

• builders and tradespeople
• home improvement suppliers and installers
• flooring specialists
• plumbers and electricians
• real estate agents or salespeople.
• pool cleaners
• gardeners and lawn mowing services
• cleaning businesses
• contractors

Products and Service based businesses

These businesses sell a combination of

• stock items,
• stock items that are ordered in especially for clients, and
• services (time).

We use the example of a VoIP telephone system provider and installer because of the various phone system accessories like headsets, handsets and main equipment needed to provide a whole solution.

Popular, fast selling items are often kept in stock and are an asset of the business.

It’s important to make sure that these “stock” items sell quickly to ensure the business is profitable.

Parts and accessories are also common inventory items that are used by service technicians for repair and maintenance.

Data entry course for daily bookkeeping transactions

This particular Online Phone System provider engages in the following daily transactions:

• Buys stock of popular products and keeps them in stock (inventory),
• Orders products in specifically for their clients. There is a credit risk in this.
• Has a list of suppliers who give them credit (creditors)
• Provide regular servicing work and might use recurring invoices
• Keeps track of which products are most popular and provide the best profit and also which ones take a long time to sell
• Buys products from large suppliers who provide payment terms and also deliver the inventory items in an adhoc basis based on the stock they have on their own shelves
• Visits prospective prospects to understand what they need and use bookkeeping software to provide quotes which are converted to orders and invoices if they get the sale
• Keep track of the time of their employees use to provide services to their clients.

Credit Management Course

When you provide a combination of products and services to a client and give them credit to pay you at a future time you have credit risk.

Products and Services businesses can leverage the terms available to them from wholesale suppliers but are responsible to make sure they get paid in time from their customers.

These are some of the issues that relate to providing credit for goods and services:

• Give their own clients payment terms,
• Receive deposits, pre payment and part payments that you need to keep track of
• Need to keep track of who owes you money
• Run Accounts Receivable Reports to see how much money is owed
• Need a credit management policy and procedures to follow-up with clients who are bad payers

Paying and Collecting GST

When you’re registered for GST you pay GST on purchases and collect GST from your clients from sales.

These payments are made on behalf of the Federal government via the ATO and need to be reported in your BAS (Business Activity Statement).

See the Bookkeepers BAS Course Topics

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