The following interviews were conducted prior to the start of the project to explore specific aspects of

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The following interviews were conducted prior to the start of the project to explore specific aspects of Z Cheddr business processes. The interviews with employees provide information that is representative of activities performed by all employees with the same titles. For example, the interview with Gordon, manager of the Bend store, provides information about the activities that all store managers perform. It is not suggested that these interviews provide complete information about all of Z Cheddr business processes. They are meant to provide an initial overview of the business.

Summary of Interview with Mr. Z

Western Oregon’s mild climate and abundant rainfall contribute to the state’s allure for dairy farmers. Mr. Z routinely said, “We have more green grass longer than any state in the country.” What’s more, land prices and living costs are relatively low in Oregon, luring a number of cheesemakers from neighboring California. Many new cheesemakers are also attracted by the cross-marketing potential of locating in Oregon wine country. Those were some of the reasons that he started Z Cheddr just over 10 years ago. His business quickly grew from one store to 10 stores plus an internet presence. Recently, he also started selling some cheeses on a wholesale basis to small groceries and other cheese and wine shops on the west coast. Mr. Z is the sole owner of Z Cheddr and operates his business as a limited liability corporation. He has a small board of directors, including his daughter and her husband, but they are seldom involved in any real business decisions. Mr. Z is a good businessman and knows a lot about selling wine and cheese. Unfortunately, Z’s accounting knowledge is marginal. His systems did not keep up with the growth of his business. He currently relies heavily on manual processes, and his data is spread among several different systems and EXCEL spreadsheets. He plans to expand his business to other west coast states to take advantage of the rapid growth in artisan cheese, wine, and beer makers. So, in addition to providing financial information about his current performance, he wants advice on the risks his business faces and cloud-based accounting system where each store submits transactions daily via the internet. He also sells cheeses and cheese and wine gift baskets over the internet. His website looks good, but the backend processes require heavy manual intervention. After a customer places an order and pays by credit card, his employees must print the orders and move to another system to update inventory, prepare shipping documents, and record the sales. He knows that this can be streamlined, so he also wants an overall evaluation of how he can use information technology to streamline his online process. Of course, he also wants to know how those changes would affect his internal control system.

Summary of interview with Gordon Lightfoot, manager of the Bend store Gordon has been the manager of the Bend, Oregon store since it opened in 2005. He has made a number of friends among the regular customers that visit the store. Gordon is known in the area for his knowledge of cheeses and especially his knowledge of which wines to pair with which cheeses. Each morning, Gordon opens the store, checking to make sure that the display cases are at the right temperature, the cash drawers are ready, and the signs are set up to display the daily specials. Then, Gordon or his clerks spend the day selling wine and cheese. A few times a week, Gordon hosts cheese and wine tasting promotions for his customers. These tastings have been very successful. Customers come from all over town to attend, and most leave purchasing both the cheese and wine that they tasted. To determine which wine and cheese to promote, Gordon checks his inventory to be sure that he has plenty on hand so that customers will be able to buy the product after the promotion. Using the Z Cheddr Promotions form, he carefully records the amount of cheese and wine pulled from inventory for the promotion. After the promotion, he files the promotion form until he can send it to Chad, the Z Cheddr accountant, with the van driver. At the end of the day, Gordon closes out the cash registers and collects the various cash drawers. He does a final check of the display cases, making sure that all cheeses are appropriately refrigerated overnight. He puts the drawers and the cash register tapes in the safe for the bookkeeper.

Summary of interview with Joan Baez, bookkeeper for the Bend store Joan is the part time bookkeeper for the store. The job is perfect for her, because she just comes in after the store closes, prepares the deposit information, and records the daily transactions in a spreadsheet. She emails the spreadsheet to Chad, the Z Cheddr accountant. She also prepares the cash drawers for the next morning and takes the daily receipts to the bank for deposit. All this usually takes two or three hours. She files the deposit slips until she can send them to Chad with the van driver. Summary of interview with Bob Dylan, cheese and wine buyer Bob recently graduated from Oregon State University, where he worked with other food science students at the O.S Creamery. They learned about cheese making by making and selling cheese, especially their famous Beaver Classic cheese. He uses his knowledge of artisan cheese making and his connections with other cheesemakers to select the best cheeses to sell at Z Cheddar . Bob negotiated contracts with each of the cheese, so all he does is call them to place an order. Each day, Bob reviews the Z Cheddar inventory records to determine what to order. He also considers recent sales trends and potential seasonal demand for particular products. Often, he will check the physical warehouse inventory and call the stores to verify inventory levels, since he is not completely confident in the electronic records. He then calls the suppliers to place the orders. The suppliers deliver their products to the Z Cheddar central warehouse in Eugene Oregon. Occasionally, Bob will arrange for a van to pick up the order if it looks like shipment might be delayed. After the products are received and accepted by Judy in shipping and receiving, Bob authorizes the payment and sends a copy of the supplier’s invoice to Chad. Chad pays each cheesemaker at the end of the month for purchases during the month. Sometimes, Chad combines payments if there is more than one shipment from the same cheesemaker during the month. Recently, Bob has also assumed the duties of wine buyer. The wine buying process is identical to the cheese buying process. It requires a good relationship with the suppliers and knowledge of the products offered by each supplier. Bob has a good rapport with his suppliers, but he makes them compete for our business. This helps keep costs down and allows Z Cheddar to provide high-quality wines for reasonable prices to our customers.

Summary of interview with Chad Mitchell, accountant Chad has been with Josh (Mr. Z) since the beginning. He used to work in the Bend store while he finished school, but when Mr. Z needed someone to do the accounting, Chad volunteered. Chad’s job is to pay the bills, update the inventory records, put together the financial records, make sure Z Cheddar pays its taxes on time, and keep Mr. Z informed about company performance. Chad gets the sales and promotions information from the stores via the van drivers. He gets transfers, wholesale, and internet sales information from shipping and receiving. That way, he can maintain up-to-date inventory counts and record sales daily. Z Cheddar conducts physical inventory counts each quarter, and Chad uses those counts to update or correct the electronic inventory records. Chad uses average inventory cost (average cost in the inventory worksheet) to value transfers, promotions, and ending inventory. The beginning inventory is valued at the average cost for the previous quarter (beginning cost in the inventory worksheet). Chad also pays all the bills. His clerk assembles the invoices and recurring payment information for both inventory purchases and administrative purchases and prepares the checks. The administrative purchases include recurring payments for rent of Z Cheddr retail stores, all of which are rented through one broker, Oregon Commercial Real Estate. Then Chad reviews the support material, corrects any errors, and signs the checks. Chad also gets the timesheets from each store at the end of the month and with his assistant enters that payroll information on the payroll services’ website. Each employee then receives a monthly check from the payroll service. Chad transfers money from the main operating account to the payroll account to cover the payroll each month. Chad sends checks for federal and state payroll taxes, social security (FICA), and Medicare (MC) withholding, including the matching employer amounts for FICA and MC, to appropriate tax authorities after the end of each quarter. Oregon has no sales tax, so he doesn’t have to make those tax payments. Chad and his assistant are also responsible for bank reconciliations each month. They use the deposit slips received from the stores to confirm deposits. Additionally, deposits include internet credit card receipts and payments from wholesale customers. Z Cheddar uses their bank’s merchant services to process customers’ credit card payments. Credit card payment information is transferred electronically from the website to the bank’s site. The bank takes their cut, which can range from 3 to 8% of the sale amounts, depending on the credit card the customer uses. It then electronically deposits the rest of the payment in the Z Cheddar account and sends an email to Chad to confirm the deposit. Of course, Chad uses the Z Cheddar checkbook (and any transfer vouchers for transfers to the payroll account) to confirm payments. Lately, Mr. Z has been more and more frustrated because Chad is too busy to give him any timely information on how the business is really doing. Chad barely has time to put together quarterly financials, let alone monthly comparisons to the budget. He is stretched way too thin and needs a better accounting system to take some of the load.

Summary of interview with Judy Collins, Shipping and Receiving Clerk at Central Warehouse Judy’s job is not easy, although she has help from several part-time clerks. She records receipts for the incoming shipments from our cheese and wine suppliers in Oregon. She checks each shipment for damage and returns damaged items to the suppliers. She updates the invoices/delivery slips and sends those to Bob (the buyer), so Bob knows what has been received and can check that against what he ordered. Judy also updates the inventory records based on the items received and accepted. She and her clerks then store the items in the warehouse. Each day, Judy also prints the list of internet orders and pulls those items from inventory. She packs the products for delivery sets them aside for pickup by UPS. She also updates the inventory records. Then, she sends the list of internet orders to Chad, so he can record sales information. UPS handles all the outgoing shipments for our internet sales. UPS bills Z Cheddar monthly for shipping costs, but so far, the flat rate $9.95 shipping charges that the customers pay have covered the shipping costs. Additionally, she packs the Z Cheddar vans that deliver to our ten stores around the state. Sometimes, she even drives the vans. She prepares the transfer lists for each store, and a clerk at the store confirms the deliveries. Then, she or one of the other van drivers brings the transfer sheets, along with any promotion forms and deposit slips sent from the stores, back to Chad, so he can update the inventory and accounting records. She also uses the company credit card to get gasoline for the vans or pay for repairs and maintenance. She sends the credit card slips to Chad so he can confirm the bills from the credit card company. Z Cheddar also sells and delivers to small groceries and wine shops around the state. Judy handles those wholesale sales. She takes orders from the wholesale customers over the phone, and then she packs the vans for delivery to those customers. Judy includes an invoice with the delivery and the wholesale customers typically pay at the end of the month.

Summary of interview with Bobby Darin, Van Driver at Central Warehouse Bobby is on the road most of the week. He helps Judy pack his van and then hits the road to deliver cheese and wine to the retail stores as well as to wholesale customers. He helps prepare the transfer list for the transfers to the retail stores. Then, he gets the manager or an employee at the retail store to confirm the transfer. When he gets back to the warehouse, he gives all the transfer forms to Chad (or puts them in his mailbox when he is not available). Bobby also delivers to the wholesale customers. He usually combines trips to avoid unnecessary driving. The wholesale customers confirm receipt on a copy of the delivery document, and he gives them an invoice at that time. He brings those confirmed delivery documents back to the warehouse and again gives them to Chad, so Chad can record wholesale sales.

Background

Mr. Z (real name Josh Zubkoff) runs a successful chain of cheese (and wine) shops in Oregon that specialize in Oregon artisan cheeses. He also sells his cheeses over the internet. He is considering expanding his business, but he thinks his current accounting and financial systems are restricting his ability to expand. He has come to you for assistance. Your supervisor met with Mr. Z and discussed his requirements in detail.

At that meeting, they agreed on the following deliverables for your project.

Required

Prepare a project plan in as much detail as possible. Develop a problem statement and the timeline to accomplish the project on time. Identify the major steps you will undertake to complete the project, when they need to be completed, and who will perform them. There are additional project planning tools, such as Gantt charts, that can help define the elements of the plan. Regardless of the planning tool used, the plan should identify the specific tasks necessary to complete the project, when each task must be completed, and who will complete each task. The project plan then serves as the management tool to keep progress on track to successful and on-time completion.