CASE BACKGROUND The MGMT Insurance Ltd. accepts payments on various insurance policies from employees of businesses across the island. These businesses deduct payments from employees' salaries and pay the insurance company a lump sum each month. This total amount deducted is shown on each employee's payslip. Deductions are due at the end of each month and each participating business submits one payment for its employees to the insurance company via online payments through the bank. However, if payments were received after 11:00 a.m., the bank does not process them until the next business day. At the beginning of each month an administrative assistant at MGMT Insurance Ltd. downloads the deductions for each company and allocates payments to the various policies. These payments include the client's unique number along with his/her relevant policy numbers and amounts due. However, recently there has been some complaints that payments for some policies were not being allocated correctly. Additionally, assume that one client experienced a problem with insufficient deductions to cover his/her monthly premiums. As a new manager with the company, you wish to check the systems and processes to ensure that they are up-to-date and report your findings and possible recommendations at the upcoming meeting. As the Manager of the Strategic Accounting department, you need to analyze the above business processes and discuss what could possibly cause the troubles that the company is currently experiencing. Discuss the allocation issue From the perspective of your department (Accounting) and management level (Manager), discuss the problem of errors in the allocation of deductions to policy premiums. Suggest ONE advantage of having an insurance policy and ONE contributing factor to errors in the allocation of deductions
CASE BACKGROUND
The MGMT Insurance Ltd. accepts payments on various insurance policies from employees of businesses across the island. These businesses deduct payments from employees' salaries and pay the insurance company a lump sum each month. This total amount deducted is shown on each employee's payslip. Deductions are due at the end of each month and each participating business submits one payment for its employees to the insurance company via online payments through the bank. However, if payments were received after 11:00 a.m., the bank does not process them until the next business day. At the beginning of each month an administrative assistant at MGMT Insurance Ltd. downloads the deductions for each company and allocates payments to the various policies. These payments include the client's unique number along with his/her relevant policy numbers and amounts due. However, recently there has been some complaints that payments for some policies were not being allocated correctly. Additionally, assume that one client experienced a problem with insufficient deductions to cover his/her monthly premiums. As a new manager with the company, you wish to check the systems and processes to ensure that they are up-to-date and report your findings and possible recommendations at the upcoming meeting.
As the Manager of the Strategic Accounting department, you need to analyze the above business processes and discuss what could possibly cause the troubles that the company is currently experiencing.
Discuss the allocation issue
From the perspective of your department (Accounting) and management level (Manager), discuss the problem of errors in the allocation of deductions to policy premiums.
Suggest ONE advantage of having an insurance policy and ONE contributing factor to errors in the allocation of deductions
Identify information from TWO other departments that could assist in your investigation. Please specify the type of report you think will be helpful and why.
Discuss your issue from the perspective of your department and management level, and discuss the impact that your issue could have on the department and the company as a whole.
Suggest ONE reason why the deduction could have been too small
Create the process diagram
a. Assuming that a client increases his/her insurance coverage, design and draw a "Policy Change Request" process diagram that will ensure the correct deductions are made the month following the increase. The diagram should show the bands, process flows, decisions, and cross-functional interactions required.
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