1.0 Historical Background of General Motors Corporation
General Motors Corporation one of the world's largest automakers was founded in 1908 and today it manufactures cars in 34 countries with its global headquarters in Detroit, Michigan. In 2008, GM sold 8.3 million cars and trucks globally in the following brand that it deals with: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Walling. GM employs 235000 people in every major part of the world and does business in some 140 countries.
GM's largest market is the United States followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. General Motors’ Onstar subsidiaries are the industry leaders in vehicle safety, security and information services. Genuine GM parts and accessories are sold under the GM performance parts, GM goodwrench and Aldelco brands through GM parts operations, which supplies GM dealers worldwide. GM engines and transmissions are marketed through GM power train.
GM was founded in 1975 and is a joint venture between General Motors Corporation (57.8%), Industrial and Commercial Development Corporation (20%), ICDC investments (17.8%), and Itochu Corporation (4.4%). The company’s vehicle manufacturing plant assembles a wide range of Isuzu trucks and buses. It is the largest manufacturer of trucks and buses in east and central Africa with more than 15 models. GM also retails fully built Chevrolet and Opel models.
GM has over 25 years experience in assembly and service. Models are engineered o suit the local conditions with up to 50% local content on certain models.
GM also has an ultra modern service center providing after sales service to customer. It also has a parts and accessories warehouse which services the entire East African region with Isuzu, Chevrolet, and Opel and Hummer parts.
2.0 THE GM CREDIT DEPARTMENT AND ACCOUNTS RECEIVABLE DEPARTMENT
Being an accounting student, I was very lucky to be attached to these two departments whose activities are in tandem with my career theories in class.
The credit control department is concerned with demanding and receiving as much money as possible from all GM customers. It is headed by the credit controller who reports to the financial controller who in turn reports to the financial director. The credit controller is assisted by the assistant credit controllers otherwise known as credit control analysts. I happened to work as a credit control analyst for a month in my period as an intern in GM.
The accounts receivables department is headed by a management accountant and is concerned with accounting in documentation and in computer systems all transactions that involve receipt of funds in all forms (cash and other forms).the management accountant reports to the financial controller. He is assisted by assistant accountants. I worked for a month as an assistant accountant.
2.2 Individual Responsibilities and Activities
As the assistant accountant I was tasked with:
I. The delicate responsibilities of opening accounts of both vehicle sales customers and parts sales customers. To ensure the account is unique i.e. it has a unique account number, name and code. Any similarity in the accounts is very dangerous financially as amounts may be posted in the wrong accounts. Here I used mainly the ‘Sage’ which is a very sensitive software with numerous user passwords with expiry periods of just two weeks.
II. I was also charged with the responsibility of charging sublets from the service department.
III. As a credit control analyst I was tasked with among other minor demands for payment from customers, following up together with the legal department payment by insurance companies after servicing of vehicles involved in accidents. I was also tasked with registration of vehicles that have been sold in conjunction with the Kenya revenue authority .i was also required to draft demand letters for payment as well as reminder letters before legal action on defaulters.
2.3 NATURE OF MY ACTIVITIES AND THE TWO DEPARTMENTS
The execution these activities is detailed below under sections 2.3.1, 2.3.2, 2.3.3, 2.3.4 and 2.3.5
2.3.1 Account Opening
Account opening is a very sensitive part of the accounting department. Whenever a customer is brought into the firm by the sales staff, an account is opened which has to be as unique as possible. ‘Sage’ is used to open the accounts by any of the assistant accountants. Accounts are denoted by 8 digit numbers with the first three digits used to identify the various categories of accounts for example all vehicle sales accounts are denoted by a group of numbers starting with 106 while all parts sales accounts start with the digits 103.Employee accounts are denoted by numbers starting with 108. In opening accounts the assistant accountant enters the name of the customer, the alpha code which has to be the first name of the customer. He then proceeds to enter the account number into the system using the previous account in the same category and following up in a chronological order.
An example in account opening steps is as shown below:
I. A Mr. Harrison Tuja approached one of the GM salesmen in an effort to buy an Isuzu Dmax. After agreeing on the price and mode of payment, they approach the accounts department in order to open an account.
II. The accounts assistant opens the transactions caption on Sage and clicks on create account. He then enters the names Harrison Tuja and enters the alpha code as Harrison. He checks the account opening file for the last account number issued, if for instance the previous account number was 10603425, he then enters 10603426 as the next account number for the Harrison Tuja file.
III. In accordance with internal control regulations, another accounts assistant will then enter any transactional entries. Here if the truck was worth 2,200,000 an invoice will be issued by the assistant accountant, and entered into the opened account showing the amount and in case of payment at any point in time, it will be entered into the same account detailing the date of payment, cheque numbers and others.
2.3.2 Charging sublets
This exercise provided an introduction to Automaster. The objective is to register all transactions that involve service of vehicles by General Motors. After the service account has been opened, the customer account number is used to register the service of the vehicle using the invoice number which is given during the opening of the account.
Other contents of the sublet include the job card, number, the vehicle registration number and the service head name.
Registration aids in printing of invoices which is given to the customer in order for him/her to facilitate payment of the service rendered. It also caters for printing of Gate passes for the finished vehicle which ensures both order and security. Using Automaster, the accountant can calculate the amount of tax charged and advice the customer accordingly.
2.3.3 Vehicle registration
Vehicle registration is done by the credit control department in conjunction with the Kenya Revenue Authority. There is a KRA official in GM whose duty is to work with the credit control department to ensure prompt registration of vehicles upon purchase.
The credit control analysts use Microsoft excel to maintain a schedule that enables them to know which vehicles have been registered and which ones have not. Upon completion of the legal processes by the KRA official, all invoiced and registered vehicles are maintained in the schedule by the credit control systems using Microsoft excel. it contains a database with the vehicle make, engine number, chassis number, date of entry into the schedule and date of picking of the vehicle by the buyer.
When a vehicle is registered, it is added to the schedule and when picked it is marked as having been picked and saved then the registration documents are handed over to the buyer. This division of tasks ensures minimal corruption.
2.3.4 Preparing payment requests
When an insured vehicle is involved in an accident and is damaged, it is brought to GM service department where it is serviced if possible and the insurance company is required to pay. Before any service is done by GM, the law requires that the insurance company appoints an assessor who assesses the damage and the maximum cost that may be incurred by the insurance company upon completion of repairs. The amount that is invoiced by the accounts department should not be higher than the assessor's amount as they are bound by law not to pay any amount not even the assessor's figure should the invoice amount be more.
Once the vehicle is done according to the service head, he is required to contact the owner who inspects the vehicle and signs a satisfactory note showing that all the repairs required on the vehicle have been done accordingly.
The owner will then contact the insurance company which will write a release letter to GM to allow them to release the vehicle to the owner. It is then up to the credit control department to follow up on the payment.
An insurance company is a strict entity as far as the law is concerned. For any payment to be made by the insurer there should be absolutely no ambiguity on the part of the payee.
First and foremost the insurance company will not pay without being asked to because if they are sued on the same they will plead ignorance of the urgency of payment therefore it is paramount that a payment demand letter is written to the insurance companies.
In the demand letter, copies of the following documents must be attached along with an invoice of the amount stated:
a) A satisfactory note duly signed by the owner otherwise known as the insured.
b) A release letter from the insurance company
c) An assessor's report on the damage on the vehicle.
Copies of all these documents are made and, along with the letter demanding pay and invoices, they are posted or sent via courier to the concerned insurance company. Inquiry is then made via phone later on receipt of the letters.
2.3.4 Physical Collection of Documents
Whenever cheques mature, it is company policy that they are picked up physically by one of the credit control staff. The contact person in possession of the cheque calls the credit controller who will arrange for the document to be collected and later processed accordingly. This is a simple process requiring no documentation whatsoever.
3.0 Training, Research and Implementation
This chapter covers all the training and experiences that I gained during the period that I was an intern in GM.
Socrates is an on-line GM page where every staff member has to undergo a form of training in order to know how to handle documents belonging to GM as there are viewed by all members of staff with rights of access to the document. In connection to that, GM information technology department has developed a training module in handling of the documents in which one has to do a test and the level of rights of access to more and more sensitive documents will depend entirely on the score of the test. Once the test is taken the score sheet is signed by the concerned member of staff and his/her immediate supervisor before being sent to the IT department along with a rights demand form. The IT department will then issue a user name and a password and user rights solely dependent on the score on Socrates. Socrates also involves training in all the software applications that are used by GM staff depending on the department.
3.1.1 The Objective
The objective of this is to build an existing level of quality as far as the handling of all GM documents is concerned, understand fully the working of all the software programs that one would come across as far as his duties in the company would be.
The first part of the training, which required me to learn about Lotus Notes to create a contact
Application, introduced the concept of sharing of documentation with both fellow staff and contact persons such as customers and others.
It also made use of the .Automaster software which is used to charge sublets. Training for Automaster was somewhat simple because the credit control staff only use it for a limited number of uses. Therefore training on a credit control analyst was undertaken on the following principles only.
1) Charging sublets
2) Reprinting invoices
3) Calculating VAT
Sage was also part of the training to enable me as an accounts assistant to open accounts for customers and post transactions as far as my user rights would allow.
• Automaster application
The Sage accounting software is state-of-the-art software that has Syntax similar to that of other accounting application but is more sophisticated. Training on Sage started by acquiring of rights to use it basing it on my duties in accounting and credit control .I was then trained to perform tasks such as opening accounts that was explained earlier, posting transactions and other minor tasks.
B. Lotus notes
Based on the knowledge of function-oriented C Programming, it is not difficult to use the Lotus notes application. The challenge, however, is to use a totally new E-mail format Lotus notes is used as a communication software in both Internet when communicating with external parties such as customers and also intranet within GM.
The Automaster software also requires training by all GM staff and not only the finance department but other departments as well. This makes it a very fundamental part of the induction into GM. It also requires that one acquires rights into the Automaster software. It is a user friendly application software with guidelines on every step taken.
3.1 Analyses of Success
Despite the challenges that I faced, my superiors were very pleased with my work. They described me as ‘a hardworking and ready to learn intern with the ability to work under negligible supervision’, in one of the recommendation letters to be submitted to my supervisor. I was able to match with the strict company’s policies and managed the normal challenges of a working environment with utmost courage.
I would like to say here, if it helps, that it is my wish to later work as an employee of this company after completion of my University degree.
4.0 Problems and Difficulties Encountered
The main difficulty I encountered was the implementation of the programs using the concept of lotus notes. With years of Internet use, experiences in ‘yahoo’ and other normal email functions, I found it hard to adapt to the use of a totally different concept in Lotus notes. Although I was using objects and classes to write a program, there still existed a mixture of both programming concepts. It took me quite some time to really understand how to make full use of the concept of Lotus notes such as the detailing of addresses and creation of other concepts.
The credit control department encounters problems such as poor filing of documents used in sending of demand letters whereby a document such as a satisfactory note is misfiled. This makes it hard for the insurance company to pay as they will demand for the said document prior to payment.
In addition, the account receivable department experiences a sharp shortage of staff coupled with the fact that very few employees in the department have the rights to open accounts. This makes it very difficult for the staff members during peak times of the year. ‘Sage’ is a cumbersome software with minimal computation making data entry very difficult for the accountants.
CONCLUSION AND RECOMMENDATIONS
Following my internship, I find the immediate implementation of the following recommendations very worthwhile;
1. The first recommendation would be the replacement of Sage with Pastel or another more hands off or more intelligent accounting software.
2. Awarding more employees the rights to perform the tiresome tasks which will in turn ensure higher productivity among the accountants.
The implementation of the attachment duties enabled me to get used to open accounts using the Sage concept and to know more about the accounting software Sage. It was a very useful experience for me, and ‘Sage’, putting aside its foregoing shortcomings, generally improves an accountant's efficiency.
Being able to use the Automaster’s concept to charge sublets and register transactions, I found myself more confident in implementing the next stage of the project, which required me to make use of Lotus notes.