Memo – Assignment Example
VMD Manager March 26, Re: Irregular Billing VMD Manger, I have major concerns about the inconsistent billings my department hasbeen receiving. In an effort to resolve the matter, I am sending this email with facts and figures to support my position. I also have a suggestion to solve the situation.
Internal Service Funds is a fund that should be self sustaining. Prices need to set high enough to cover supplies, labor, and to keep the fund in the black, but low enough in order not to create a huge profit. The prices need to be set so fluctuations will be minimal. This is not currently the situation.
I have not done an internal review of your department, but with the billing over time I have some ideas of the problem. Your billing department is compensating for not charging enough or over charging in order to make the Internal Service Fund the correct number at the end of the month. This is done not out of malicious, but out of incorrect billing to begin with. Other departments are being charged by estimation instead of service use. Then at the end of the month when there is too much or not enough money, the new bills are sent out with the fluctuating prices. This is a vicious cycle that will not stop until a new billing system is put into place.
Since the VMD has fluctuations in the billing, I believe an alternative method of billing needs to be explored. Itemized bills would seem to be more efficient and fair to not only my department, but to your department as well. Services need to have set prices. I am not suggesting that every little screw tightened by your department be itemized. Lube jobs, brake jobs, tire changes, and so forth need to be itemized at an X amount and sent to the departments every month. The way that the billing works currently, no explanation of services is given. This would help make the billing clearer for both departments. Itemized bills will also help with audits on both ends. This type of billing will determine if the billing is due to improper usage of your services by my department. In return, itemized billing would help you know if your employees are over or under charging improperly. Itemized billing will also help your department maintain your goals of the Internal Service Funds. It will help you price items correctly in order to maintain the goal of setting the right price that is neither too high nor too low. Since all jobs must be put into the computer leaving a paper trail, it would be easy to implement prices that could be raised or lowered according to the economy. Itemized prices would help everyone keep their goals.
I am no way accusing or laying blame upon your department. The problem needs to be addressed. I feel that this is a better solution to the problem. Itemized billing could save both departments a lot of time and money. If you disagree, please feel free to make your own suggestions to your supervisors. I just need to find a solution to this problem due to the burden placed upon my department. I hope my suggestions help. Thank you for taking the time to consider my suggestions and concerns.