Assessment of HLW New Membership Plan and Fees Structure

MANAGERIAL
ACCOUNTING

Contents
Assessment of HLW new membership plan and fees structure will improve its cash receipts................3
4. Analyse the difference between present management plan and new management plan with new fee
structure...................................................................................................................................................4
CONCLUSION...........................................................................................................................................5
REFERENCES............................................................................................................................................6

Assessment of HLW new membership plan and fees structure will improve its cash receipts
Hawthorn leisure works offers tennis courts and other physical fitness facilities to its
members. It has around 2000 members. The management plan and fee structure of HLW leads to
poor cash receipts that are too especially in winter months. For the purpose to solve this issue the
club is trying to introduce new management plan and fee structure can improve the cash flows of
the club and can make it profitable throughout the year.
Yes, HLW’s new membership plan and fee structure would certainly improve its ability
to plan its cash receipts. In the present situation there are two sources of revenue available to
HLW which are annual membership and court fee. The annual membership is divided into three
categories which are individual, family and student. Under this management plan, the annual
member fee of individual was charged as $ 45, for students it was charged as $ 30 and for family
the fee was $ 100. Half of the members of the club is family and other half is constitute of both
students and individual. The hourly court fee is $ 8 and $ 12 depending on the season and prime
time – non prime time (Brewer, 2015).
The court has hourly court fee as in case people who do not want membership too can
play and it can create profit. The timing of the court id 12 hours which is from 9 am to 9 pm but
the peak season of tennis court is from October to April and it makes the club covers 90 to 100
percent of court capacity during 5am to 9 pm and on the contrary 50 to 60 percent is covered
from 9 am to 5 pm. Now the club charges $ 6 in off season which fills just 20 to 40 percent of the
capacity which is too low to generate income (Boučková, 2015). In present plan, the
membership expires in September and company earns by renewing memberships but it also gives
an option of not taking a membership and play on hour basis which is the main issue when off
season arrives. In winters, the cash flow declines as due to cold very few people arrive to play in
the court and club’s hourly fee strategy does not work in winters because no one arrives. The
other issue is being difference of membership fee between individual and students which needs to
be change by the club so that individuals who are other than students do not feel that students
have advantage.
To increase the cash receipts the club is thinking to implement new plan in October in
which will eliminate per hour court fee and will charge only annual membership fee and will have
only two groups which will be individual and family with annual fee of $300 and $500
respectively. The annual fee would be collected in advance so that there is no chance of fraud or