Jamaal Horne, Student Diaries, Accounting and Finance
Many of our accounting and finance students take an extended work placement as part of their sandwich degree to enrich their CVs and first-hand experience of the workplace. Jamaal was one such student, taking on a challenging (but rewarding) internship with Surrey’s A&H International – a specialist supplier of kit and equipment for sports referees.
June and July 2016: a steep learning curve
“June and July is the busiest time of year for the business, and there was also a release of the latest edition of the business’s highest-selling product. As a result, I spent the majority of my first two months working in the operations and shipping part of the business to ensure customers received their orders quickly and for the lowest shipping costs as possible.
My management accounting brain kicked into gear and I wanted to send our products by the lowest cost delivery tariff possible. I quickly learned, however, that the products would not arrive, or arrive late. So, it’s often better to choose the more costly delivery tariff, as we were then able to track delivery and get insurance cover. When I also made a typo and sent an order to New Zealand instead of the Netherlands, it was a key learning point about understanding attention to detail.”
August and September 2016: contributing to improved business performance
With Jamaal’s honeymoon period over, he started to enjoy understanding how the company works. He began to have input and use business and economic theories to improve the business’s performance. The business had been in a monopolistic position within the market for over a decade but was now coming under increased competition.
“I suggested we used psychological pricing to make our prices look more attractive to drive sales. I began understand the importance of time management and the need to prioritise. I would ensure that the bulk of my work was completed as early as possible to give me time to search our warehouse. I wanted to gain a better understanding of our stock and assess the quantity of low-cost stock that was not recorded on Sage that I could sell. My key learning points during this time were the importance of time management and prioritisation to allow me to be a more productive employee.”
October and November 2016: spotting a gap in the market
Jamaal identified that a large portion of stock was purchased by the business at very low cost. As a current customer of the business, he had an understanding of the market value of the products and was confident of the prices that customers would be willing to pay while undercutting the competition.
“My days off were spent direct selling our products to our customers. I identified that none of our competition were direct selling, offering the option to purchase in cash or the option to try before you buy. I had some contacts in our market and so attended some conferences and sold over £2,500 in the first two events, which is a substantial sum for a small business.”
December 2016 and January 2017: stepping up to solve a problem
With the Christmas rush in full effect Jamaal quickly had to understand the importance of this time of year for A&H International customers. Usually, errors could quickly be sorted out by ensuring products are returned and then the correct order sent back to the customer. But, if the order is a Christmas gift it changes things massively.
“After 15 December, our boss made it clear that productivity needed to be at a maximum and there could not be any errors. After a few errors were made, which caused some conflict and unrest within the office, I suggested that a provision for errors account should be created as an expense to the business. This had never been done before in the business.
I suggested that a sum of money be set aside per month for the costs incurred for errors on customer orders. These costs are mostly postage and consolation gifts as part of our customer service. I then suggested that we use it as a target, so if there is a favourable variance, we would get rewarded. This helped to improve several parts of the business and allowed us to be more productive employees by knowing that errors were provided for and that the more efficient we were the more we would get rewarded. Stepping forward to use accounting practices to solve problems and be accountable during a time of conflict was one of my proudest moments of my placement.”
February and March 2017: improving the organisation to improve efficiency
“By this time I was given bank reconciliation as a role as well as fraud checking and releasing customer payments on SagePay. Despite doing other roles and being productive, getting down to some financial work reminded me of how naturally it comes to me. Due to staff movement, these extra roles forced me to manage time even more effectively, while my organisational skills needed to be at maximum.
Reconciling accounts can be a difficult, tedious task, but learning how the business works, from stock, pricing, customer service, operations and shipping made finding errors much easier. Having access to our financial records, sales, purchases and cash flow statements led to me consider suggestions to improve business performance. My key learning points were that improving your organisation leads to improving efficiency and problem-finding abilities can improve your input as an employee.”
April and May 2017: convincing and proving the power of his ideas
As a result of Jamaal’s suggestions, changes were made. With a previously outsourced social media manager moving on, Jamaal volunteered to help out and mentioned that it would reduce expenses. As a result, he became the social media manager of the company.
“I wanted to make our business more competitive by offering more sales promotions, price reductions and videos that will interest our customers. Our boss, however, did not want me to do a wide-scale price reduction because he felt it would impact on our margins.
What I then did was a cost volume profit analysis on our lower-performing products, and convinced him it was something we should try. Using the CVP, I discovered that we could sell one of our products for up to 40% less and still meet our profit target. I did a sales promotion on that product to prove to the boss the effect that CVP could have.
We sold more of this product in 24 hours of the promotion than the product sold in the whole of May last year. After this, the boss allowed me full control of any sales promotion on social media. It was great to use my theoretical knowledge, putting it into practice and presenting ideas in a formal, legible way to convince the senior managers that this would improve business performance.”