In Module 2 we studied customers and vendors. In this assignment, you
will assume the role of the business owner of Kristin Raina Interior
Designs responding to a complaint about billing practices. Below is the
message you received from a customer; your assignment is to write a
professional business letter that will serve as the cover letter for an
updated invoice. After the letter, please write a short summary of
internal control practices that should be in place to avoid this type of
accounting error. Make sure to discuss how this error could be avoided
in the future (note: an updated invoice is not required for this
assignment only the business letter):
Hello Ms. Raina,
I don’t know what is going on with your company. I just received a bill for 16 hours of design services and 8 hours of decorating services, I was charged $75 for both, we had agreed on a price of $60 per hour for design services and $50 per hour for decorating services, as my neighbor Jennie Gunthrie received the same deal.
I am not paying this bill, in fact I already put down a $600 payment, which isn’t reflected on this invoice at all? What is going on? I need to be compensated for all of my time and if this isn’t cleared up and a new bill sent out immediately, I will never use your services and would not recommend your services to anyone.
Information to help create letter:
Business Company Address:
Kristin Raina Interior Designs
25 NE Johnson Street
Minneapolis, MN 53402
Customer Company Address:
210 NE Lowry Ave.
Minneapolis, MN 54204
Sam Hernandez has noticed a marked decline in his gross profit percentage from last year to this year, from 60% down to 40%.
you will respond as Sam to the email below. Think about the kinds of questions that Sam might still have regarding the solution your classmate has proposed to him, and ask probing questions to seek clarification. Post your email as a reply to your classmate’s email.
Dear Mr. Hernandez,
That you for your previous email. I have looked into the situation deeply to see the possible reasons why the gross profit percentage dropped 20%. It went from 60% at the beginning of the year to 40%. I believe our pricing of the products are too high and we are not getting enough revenue in. In this situation there is a chance if things don’t get better by next year we could have to close the doors. I believe we should speak further about this in person to get a game plan for the business. Please advise with a time and date that you would like to discuss this further.