GMAT Essay Topic 436 - The following appeared in a memorandum from a member of a financial management and consulting firm. "We have learned from an employee of Windfall, Ltd., that its accounting department, by checkin g about ten percent of the last month's purchasing invoices for errors and inconsistencies, saved the company some $10,000 in overpayments. In order to help our clients increase their net gains, we should advise each of them to institute a policy of checking all purchasing invoices for errors. Such a recommendation could also help us get the Windfall account by demonstrating to Windfall the rigorousness of our methods." Discuss how well reasoned . . . Etc.
The argument above states about the mistake in Windfall company's invoices and how its accounting team has saved the company some ten thousand in overpayment. The accounting team has checked about ten percent of the last month's purchasing invoices for error and inconsistencies. Therefore the aut...
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In the argument the member of a financial management firm suggests to institute a policy where clients have to check their purchasing invoices. The pracice would save the client from overpayment and also help the financial firm to get the Windfall account. The argument is seriously flawed and have some concerns which need to be address first to validate the argument.
The financial firm is expecting its client to do the verification to find out any mismatch in the purchasing invoices. Asking client to follow this kind of practice could tarnish the company's image as it would be clear to the client that compnay's accounting department is not confident whether the invoices are free from any kinds of errors. This cuould hinder the subsequent sales of the company's products to the new customers. If this is true then the company's expectation to get the Windfall account is not strong enough because the method is not rigorous and it is indicating some loopholes in the firm's accounting process.
We also don't know what is Windfall's action after detecting the mismatch in the invoices. Did they cancel the contarct with the concerns who provided the flawed invoices? Without this answer we can't comment whether the company's plan would be successful to get Windfall account.
The argument mentions the example of the Windfall's accounting department which saved around $10000 in overpayment after checking 10 percent of the purchasing invoices. We don't know anything about the financial firm's customer base. The argument assumes that the firm's customers would be educated enough to read the invoice and find the faults in it. If the customers don't know how to read the invoices then the company's plan would not be effective by implementing the mentioned policy in the argument.
It is not clear from the argument whether Windfall gets the extra amount after detecting the faults in the invoices and also it is not clear how the financial management firm wants to address such claims for the payments from its customers. We don't know anything from the argument what will be firm's response to the consumer whether to imporve the practice to avoid the future blunders or to give the customer the claimed amounts. Both methods can result in financial gain for customers.So the recommendation with details of action points needs to be clear to justify the argument.
From the above discussion I can conclude that the argument is not persuasive and convincing enough. It needs to address all the abovementioned points to be more through and appealing.