Damocles’ Kitchenware sells cutlery and dinnerware to customers through a small
retail outlet located in downtown Brisbane. All of Damocles’ sales are to customers
who purchase on credit. Since the existing process for receiving payments from
customers is not technology based, all receipts from customers are either received
through the mail or in person from the customer. Over the past few years, sales for
Damocles’ Kitchenware have steadily increased. So too have accounts receivable
levels. A summary of the details is shown below:

Concerned about its liquidity, Damocles is investigating the introduction of electronic
bill presentation and payment (EBPP), and EBPP combined with bill management
systems (EBPP/BMS).
Required
Prepare a memo that advises the management of Damocles about the difference in
the services offered through EBPP versus EBPP or BMS. The memo should address
the following:
(a) A description of what EBPP and EBPP/BMS are and how they operate.
(b) The advantages of each option for the business and for its customers.
(c) The impacts of the technology on the current operation of the process.
(d) The impact of both systems on process performance and key financial statement
ratios.
(e) A conclusion as to which (if any) technology option Damocles should select.

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Year 2007 2008 2009 2010 Sales for year ending 30 125 450 157993 188014 212331 June (all on credit) Net profit after tax for 35014 44761 48 536 51664 year ending 30 June Accounts receivable at 12500 29746 55 484 72467 30 June