Assessment of HLW's New Membership Plan and Fee Structure - MA515

This report assesses Hawthorn Leisure Works' (HLW) new membership plan and fee structure, focusing on its potential to improve cash receipts. The current plan, with annual memberships and hourly court fees, faces challenges, particularly during winter, leading to poor cash flow. The proposed new plan eliminates hourly fees, introducing individual and family memberships with advance annual payments. This shift aims to attract new members, retain existing ones, and ensure consistent revenue. The analysis compares the current and proposed plans, highlighting the advantages of the new structure in terms of financial stability and customer ease. It also explores the impact of promotional campaigns and membership adjustments on the club's profitability and long-term sustainability. The report concludes that the new plan, with its focus on advance payments and membership structure, is a more efficient approach to managing cash flow and ensuring the club's financial health.

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

cash deficit. Members under this new plan will be able to use the court according to their wish at
any time so it will provide ease to customers in order to use the court according to their free time.
As the club was facing low cash receipts therefore to attract new customers the club would do
special promotional campaign to attract new members and to retain existing members as well.
The club believes that with new strategy the student members would turn into individual
members which will increase the cash receipts of the company and 70 percent of the existing
members will stay with the club. All the members compulsory need to join in the new
management plan else they would not be considered as part of the club. Also the most active
member of the club will have benefit of special fee reduction which will keep the members
satisfied and loyal towards the club (Malmi, 2016). Also, the special promotion that will be on
August and September will attract member to take annual fee and this way even when the
members do not come in winters, it will not lead to cash deficit for the club as new plan would
focus on taking advance fee which will improve cash receipts.
4. Analyse the difference between present management plan and new management plan with new
fee structure
The present management plan and fee structure of the club is efficient during prime
seasons but is not effective during winters and leads to decrease in cash receipt for the company
(Gitman, Juchau and Flanagan, 2015). The current plan was divided into three groups which
were individual, students and family memberships whereas the new plan will be focused on only
two groups which will be individual and family membership plan which will be reduced to $250
and $450 in case the members pay advance for their membership plan which will attract
customers for advance payments.
In current plan there is two way of earnings for the club, the one is from annual
management plan and the other is from hourly court fee in which people can come and can play
tennis by applying the rent of the court for an hour (Benson, and et.al., 2015). The hourly fee is $
8 and $ 12 based on the season and prime and non prime time. On the other hand the new plan
will have just one way of earning that is from annual membership plan and will eliminate hourly
court fee as during off season the expenses of the club cannot be meet as people do not come to
play in winters due to cold, vacations and many more reasons. Also, annual membership plan
will lead to profits as even when the members do not come to pay it will not matter because the
fee will be already charged and will be deposited in advance therefore it will not lead to cash
deficit form the club (Andrew Linn and Yi, 2017).
In current plan the there are two shifts which is from 5 am tom 9 pm and 9 am to 5 pm, but in
new plan there would be no such shifts instead the members would be allowed to use the court
during any time of the year. Also it will allow special discounts to the people who were

associated with the club from the past and will do special promotional campaign to attract
members and to retain existing members as well which will lead to increase in profits (Zanoni,
Thoelen and Ybema, 2017).
The new plan would also focus on members who would pay advance the fee in advance
will be allowed with reduction in fee but the other members will have to renew their membership
in October according to the new management plan. Members who would not rejoin will not be
considered as active in the club and their names would no longer be associated with the club.
This will lead to loss of members but would be a start of implementation of a strong plan which
will make the management of the club stable and efficient (Andrews, 2017).
CONCLUSION
The report is about Hawthorn leisure works that offers tennis court and other physical
activities services to its members. Form the above analysis, it is depicted that the club faced low
cash receipts because of its poor management plan and hence has adopted new management plan
with few changes in fee structure and membership of the members. It can be concluded from the
above analysis that if plan of the management is efficient then it can lead to sustainability and
profitability.

REFERENCES
Books and Journal
Brewer, P.C., Garrison, R.H. & Noreen, E.W., (2015). Introduction to managerial accounting.
McGraw-Hill Education.
Boučková, M., (2015). Management accounting and agency theory. Procedia Economics and
Finance. 25. pp.5-13.
Malmi, T., (2016). Managerialist studies in management accounting: 1990–2014. Management
Accounting Research. 31. pp.31-44.
Gitman, L.J., Juchau, R. & Flanagan, J., (2015). Principles of managerial finance. Pearson Higher
Education AU.
Benson, K., & et.al., (2015). A review of accounting research in the Asia Pacific region. Australian
Journal of Management. 40(1). pp.36-88.
Papazov, E. & Mihaylova, L., (2015). Organization of Management Accounting Information in the
Context of Corporate Strategy. Procedia-Social and Behavioral Sciences. 213. pp.309-
313.
Dicko, S., (2017). Political connections, ownership structure and quality of
governance. International Journal of Managerial Finance. 13(4). pp.358-377.
Andrews, A., Linn, S. & Yi, H., (2017). Corporate governance and executive perquisites. Review of
Accounting and Finance. 16(1). pp.21-45.
Zanoni, P., Thoelen, A. & Ybema, S., (2017). Unveiling the subject behind diversity: Exploring the
micro-politics of representation in ethnic minority creatives’ identity
work. Organization. 24(3). pp.330-354.
Online

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