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Postal Services Act, 1998 (Act No. 124 of 1998)

Accounting Separation Regulations for Reserved Postal Services

11. Business Activity Cost Pools

 

1) Costs are to be accumulated by the following major cost pool groups within each business:
a) Customer Service activity costs represent a broad category of expenditure items and activities related to the provision of customer service. These activities may support a business level of brand and community interface {such as overall corporate branding, complaints not specific to any segment, corporate correspondence on governance etc.) while others are segment specific (responding to product questions or tracking a specific product in the mail stream. Customer Service costs are to be accumulated by the following major cost pool groups:
b) Tracking packages includes the combination of expenses and assets related to assisting customers {senders or receivers) to locate mail items in transit. This activity includes the receipt of questions and complaints on late or missing items even if the item cannot be physically tracked.
c) Handling Open or Undeliverable Items includes the combination of expenses and assets related to handling mail items which have been damaged, opened, or cannot be delivered due to inadequate or incorrect addressing.
d) Insurance, Guarantee, or Settlement Costs and Fees includes the combination of expenses and assets related to payment of insurance for lost, damaged, or late items; guarantees such as on-time delivery, or general settlement or goodwill payments for problems in the delivery system or operations generally.
e) Handling complaints, goodwill, and community involvement includes the combination of expenses and assets related to goodwill-building and general good relations with customers and the public.

 

2) Sales and Marketing activity costs encapsulate business development, brand development, product management, pricing strategy, advertising, order-taking, and customer relationship processes of the postal operator. Sales and marketing costs are to be accumulated by the following major cost pool groups:
a) Advertising and brand awareness includes the combination of expenses and assets related to advertising and brand awareness. These costs may be related to the overall postal brand or focused on specific products or segments.
b) Product management and pricing includes the combination of expenses and assets related to the focused effort on specific products or product groups to ensure the appropriate product offering, product promotion, product engineering, and product pricing.
c) Receipt of customer orders includes the combination of expenses and assets related to recording of customer orders to begin the overall order fulfillment of their needs.
d) Managing customer relationships include the combination of expenses and assets related to the management of specific customer relationships, customer contracts, discounting, and customer specific arrangements. The customer relationship process includes billing and accounts receivable from customers.

 

3) Support activities and costs include the broad range of business management activities to conduct the overall operations of the Licensed Operator. These activities ad costs may be oriented to supporting the overall business, may have a causal relationship to scale (i.e., the more services offered or the larger the entity, the more support required), or may be complexity-driven (i.e., where simple systems become more costly and complex due to the overall complexity of the business and/or the product mix). These costs may be allocated to other cost centres and businesses or may be treated as unattributable costs.
a) Managing Human Resources includes the combination of expenses and assets related to the human resources management and development processes such as training, employee records management, labour relations, payroll, and benefits.
b) Providing lnformation Technology Support includes the combination of expenses and assets related to providing information technology services and support to various segments of the business.
c) Maintaining Financial Records and report financial performance includes the combination of expenses and assets related to all aspects of financial management.
d) Other Business Supporting Administrative Services includes all other administrative services such as executive management, legal and regulatory support, business strategy, internal communications, support, and others.