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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 checking about 10 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.”
Essay:The member of a financial management and consulting firm in a memorandum states that to help its clients increase their net gains, the firm should advise each of its clients to institute a policy of checking all invoices for errors. He also states that such a recommendation could help them get the Windfall account by demonstrating to Windfall the rigorousness of their methods. The author's line of reasoning is that by checking about 10 percent of the last month's purchasing invoice, an employee of Windfall Ltd. saved the company some $10,000 in overpayments. Stated in this way, the argument manipulates facts and conveys a distorted view of the situation. The argument is, therefore, weak and has several flaws.
First, the argument states that by checking about 10 percent of the last month's purchasing invoices for errors and inconsistencies, an employee saved the company some $10000 in overpayments and hence this method, if implemented, would increase the client's net gains. This statement is a stretch since the argument is based on only 10 percent of all the invoices. The sample size to make such a strong recommendation is very small. Also, the author does not take into account if these selected invoices were based on random selection, or if the accounting department already had the knowledge of errors in these invoices. For example, if the accounting department already knew that these invoices had errors and inconsistencies, then the author's claim of the recommending such plan would not bring about the expected net gain for their clients. The argument would have been much clearer if the author provided the source of these invoices.
Second, the author states that the firm should advise its client to institute a policy for checking all purchasing invoices for errors. This is again a very weak claim since from the given data, one cannot conclude how long it takes to check the invoices or the extra resources required to carry out the checking. If the time and efforts required for such a process are significant, the company might face decreased productivity and efficiency in other important resources and thus, might have adverse effects on the company's bottom line. The company's net profit might decrease significantly. If the author provided the time and resources required to check the invoices for errors and inconsistencies, the argument would have more validity.
Finally, the argument should include the requirements needed for securing the Windfall account. What if Windfall Ltd gave more importance to getting their work done quickly over rigorous methods as stated by the author? What other factors does Windfall Ltd consider before giving their account to a consulting firm? Without the answer to these questions, one is left with the impression that the argument is more wishful thinking rather than substantive evidence since the author only considers one aspect of securing the Windfall account.
In conclusion, the argument is weak for the reasons stated above and is, therefore, unconvincing. To assist the merit of a certain situation, one should have knowledge of all the contributing factors, in this case, the source of these erroneous invoices, the time and resources required to carry out such a huge task and all the requirements needed to secure a Windfall account. Without this information, the argument remains indefensible and open to debate.