A Local Accounting Firm Has Offered to Do All the Billings

question 132

Essay

A local accounting firm has offered to do all the billings and collections of a general practitioner.The annual fee will be $12,000.The service will replace the part-time bookkeeper who works for $12 an hour, 10 hours a week.Because outsourcing accounting activities will take place away from the office, the doctor estimates that she will have one additional hour a week to see patients.Normally she sees four patients an hour with an average visit fee of $100.The office is open 50 weeks a year.Since the accounting service will maintain all records in its office, the doctor will no longer need to rent storage space for the office files.The storage space rents for $150 a month.Required:Determine whether or not the doctor should accept the offer to use the accounting service.

---

Definitions:

Organizational Politics

The process and behavior in human interactions involving power and authority, used to gain advantage within an organization.

Power

The ability or capacity to influence or control the behavior of others, often backed by authority or force.

Potential

The inherent ability or capacity for growth, development, or coming into being.

Behavior

The actions or reactions of individuals or groups in response to external or internal stimuli.